Defiance Acquires Processing Plant and Silver Projects from IMPACT Silver Corp. in Mexico

VANCOUVER, BRITISH COLUMBIA -- (Marketwire - Aug. 25, 2011) - Defiance Silver Corp (Defiance) (TSX VENTURE: DEF) is pleased to announce that it has signed an option agreement with IMPACT Silver Corp. (IMPACT) for the acquisition of the Santa Gabriela (formerly Veta Grande) processing plant and associated surface rights, as well as 13 mining concessions in the historic silver mining district of Zacatecas in central Mexico. The Zacatecas silver district is one of the largest silver mining districts in the world with past production of more than 1.2 billion ounces of silver from veins near the optioned concessions.

The Santa Gabriela processing plant treated silver-lead-zinc ores from the Zacatecas silver district on a custom milling basis by flotation with an estimated 200 tonnes per day (tpd) capacity from approximately 2007 through to March 2010 when it was purchased by IMPACT Silver Corp and shut down. The processing plant has been undergoing repairs and upgrades since the acquisition by IMPACT.

Defiance will also have an option to acquire from IMPACT a 100% interest in 10 mining concessions in the Zacatecas silver district totalling approximately 127 hectares. These concessions host a number of historic mine workings on silver vein occurrences and old mine dumps. The most prospective concession is the Nueva Granada which hosts a secondary structure off of the major Veta Grande vein, one of the three principal production veins in the Zacatecas silver district. Additionally Defiance may acquire IMPACT's 27% interest in three mining concessions that are in a joint venture agreement with Silver Sun Resources Corp., subject to Silver Sun's right of first refusal.

Defiance plans to aggressively develop the Zacatecas assets by: focusing on completing the refurbishment of the processing plant including the schedule of upgrades required to maintain the operating permit and recommence operations; exploring the many historic mining occurrences and mine dumps on the optioned concessions to define feed for the mill; and to identify additional acquisitions to build a silver production center.

The option agreement consists of two staged payments to IMPACT totalling 6,675,000 common shares of Defiance. The initial payment of 1,668,750 common shares of Defiance is to occur on or before 90 days from the signing of the option agreement. The second and final payment of 5,006,250 common shares of Defiance is to occur on the final closing defined as on or before the earlier of two (2) years from signing of the option agreement or on achieving commercial production at the Santa Gabriela mill. Commercial production is defined as production of 160 tonnes in a 30 consecutive day period. During the term of the option, Defiance will be the operator responsible for carrying out work programs and maintaining the assets in good standing, under terms of an operating licence with IMPACT. This includes an existing operating permit for the processing plant that requires a schedule of upgrades to be completed to keep it current. Defiance is also required to complete a financing for a minimum of $1,500,000 prior to the final closing.

Defiance Silver Corp. is a silver explorer with plans to be a near-term producer in Mexico. With a strong team of proven mine finders and developers, Defiance is focused upon being an aggressive explorer and acquirer of exploration and development silver projects.

This agreement is subject to approval by the TSX Venture Exchange, and the potential creation of a control block is subject to approval by the shareholders of Defiance.


On behalf of Defiance Silver Corp.

Bruce Winfield
President and CEO



Forward-Looking Statements. This Defiance News Release may contain certain “forward-looking“ statements and information relating to Defiance that are based on the beliefs of Defiance management, as well as assumptions made by and information currently available to Defiance management. Such statements reflect the current risks, uncertainties and assumptions related to certain factors including but not limited to, without limitations, exploration and development risks, expenditure and financing requirements, title matters, operating hazards, metal prices, political and economic factors, competitive factors, general economic conditions, relationships with vendors and strategic partners, governmental regulation and supervision, seasonality, technological change, industry practices, and one-time events. Should any one or more risks or uncertainties materialize or change, or should any underlying assumptions prove incorrect, actual results and forward-looking statements may vary materially from those described herein. Specifically, there is no assurance that Defiance will be able to raise the funds necessary to close the transaction with IMPACT, that it will be successful in restoring the mill to the point where it can achieve commercial production; or that it will be able to profitably operate the mill. Defiance does not assume the obligation to update any forward-looking statement.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.



Contact Information

Defiance Silver Corp.
Nathan Doubroff
Investor Relations
(778) 883-7374

Defiance Silver Corp.
1100-543 Granville St
Vancouver, BC., Canada V6C 1X8
604 681-6813 (FAX)
www.IMPACTSilver.com

www.defiancesilver.com
info@Defiancesilver.com