SPROTT CONTINUES TO SUPPORT COMBINATION TRANSACTION

TORONTO, July 30, 2012 /CNW/ – U.S. Silver Corporation (TSX: USA) (“U.S.
Silver” or the “Company”) announced that its Board of Directors
unanimously recommends that U.S. Silver shareholders REJECT the unsolicited cash offer from Hecla Mining Company (“Hecla”) to
acquire all of the outstanding common shares of U.S. Silver (the “Hecla
Offer”).

Commenting on the offer, Gordon Pridham, Chairman & Interim CEO of U.S.
Silver said, “the Board continues to believe that the proposed strategic combination
transaction with RX Gold is in the best interest of shareholders and
continues to recommend that U.S. Silver shareholders vote in favour of
the combination transaction at the August 7^th shareholders’ meeting. Valuation multiples in the precious metals
sector are at or near all-time lows – the Hecla Offer is simply not
compelling enough for us to abandon our strategic plan going forward.”

The Board of Directors, with the assistance of its legal and financial
advisors, carefully considered and reviewed the terms and conditions of
the Hecla Offer and recommends that U.S. Silver shareholders REJECT the Hecla Offer and instead vote their U.S. Silver shares IN FAVOUR of the proposed combination transaction with RX Gold & Silver Inc. (“RX
Gold”) for a number of reasons, including the following:

• The Hecla Offer is inadequate from a financial point of view to U.S.
  Silver shareholders. Cormark Securities Inc. has delivered an opinion to the Board of
  Directors that the consideration offered pursuant to the Hecla Offer is
  inadequate, from a financial point of view, to U.S. Silver
  shareholders.

• The Hecla Offer is not supported by Sprott nor by U.S. Silver’s
  directors and officers. Sprott, U.S. Silver’s largest shareholder, and U.S. Silver’s directors
  and officers have confirmed that they continue to support the
  combination transaction with RX Gold.

• The Hecla Offer is highly opportunistic and does not provide U.S Silver
  shareholders with an adequate change of control premium. The Board of Directors believes that the Hecla Offer is
  opportunistically timed to take advantage of a recent period during
  which silver prices, and the share price of companies in the silver
  industry, have been at a low point. If successful, the Hecla Offer
  would deny U.S. Silver shareholders the opportunity to participate in
  future value accretion as the silver price recovers. The Hecla Offer is
  for C$1.80 per U.S. Silver common share in cash, which represents a
  13%premium to the 90-day volume weighted average share price, and a 10%
  discount to the 180-day volume weighted average share price, of the
  U.S. Silver common shares ending July 24, 2012. These premiums are well
  below premiums paid in other unsolicited metals and mining
  transactions, which have been on average substantially higher on
  completed transactions over $100 million since 2005.

• The Hecla Offer does not fully reflect value for U.S. Silver’s current
  assets and organic growth opportunities. The Board of Directors believes that there are significant organic
  growth opportunities available to the Company within its current
  property portfolio. A plan to fill the Company’s mills, which are
  currently operating at approximately 60% capacity, is currently
  underway. Achievement of this plan would increase production and reduce
  cash operating costs. Further, the Company has a large (state area
  covered) and dominant land position in the Silver Valley that has not
  seen exploration in the Company’s past due to working capital being
  directed to mine production efficiencies. With the Company’s improved
  cash position, exploration programs are underway and showing
  encouraging progress. The Board of Directors also does not believe that
  the Hecla Offer adequately recognizes potential value from the Coeur,
  Calladay and the Company’s other highly prospective exploration
  properties.

• The Board of Directors continues to believe that the proposed
  combination transaction with RX Gold will provide long term value to
  U.S. Silver in excess of the consideration being offered under the
  Hecla Offer. In the first half of 2012, RX Gold’s Drumlummon property, operating
  with a small miners permit, produced approximately 860,000 silver
  equivalent ounces. Together with U.S. Silver’s steady commercial
  production (1.2 million silver equivalent ounces in the first half of
  2012), the combined company’s current growth plan is expected to be
  funded without diluting existing U.S. Silver shareholders. In
  addition, under the proposed combination transaction, U.S. Silver
  shareholders will have a 70% share of the $10 million per year of
  expected combined synergies that have been currently identified.

• The Hecla Offer does not fairly compensate U.S. Silver shareholders for
  the synergies and strategic benefits available to Hecla upon acquiring
  U.S. Silver. The Board of Directors believes that significant synergies and strategic
  benefits would accrue to Hecla upon the acquisition of U.S. Silver
  because of the proximity of the companies’ respective assets and the
  Company’s large and dominant land position in the Silver Valley. Such
  synergies and benefits include, among others, better mill sequencing,
  economies of scale, and greater access to labour. The Board of
  Directors believes that the Hecla Offer fails to fairly compensate U.S.
  Shareholders for a portion of such synergies and benefits.

• The Hecla Offer takes advantage of U.S. Silver’s existing cash balances
  to finance its offer. U.S. Silver has approximately C$29 million in working capital on its balance sheet as of June 30, 2012,
  which represents approximately 26% of the funding requirements of the
  Hecla Offer, and as such, the Hecla Offer effectively values U.S.
  Silver’s operating assets at C$1.39 per share.

• Combination transaction with RX Gold preserves benefits of expected rise
  in price of silver and precious metals companies. The proposed combination transaction with RX Gold is a strategic plan
  recommended by the Board of Directors. The combination with RX Gold is
  expected to preserve the ability of current shareholders of U.S. Silver
  to maximize the value of the cash-flowing assets of both companies, and
  future shareholders in the combined company to capture the benefits of
  an anticipated near to medium term increase in the price of precious
  metal companies. Consummation of the combination transaction with RX
  Gold does not preclude the ability of the combined company from
  engaging in a change of control transaction in the future.

• Pursuant to the terms of the combination agreement with RX Gold, the
  Company has not solicited proposals from third parties to compete with
  the Hecla Offer.

The Board of Directors’ recommendation to U.S. Silver shareholders that
they REJECT the Hecla Offer and instead vote their U.S. Silver shares IN FAVOUR of the proposed combination transaction, as well as a more detailed
discussion of the reasons for rejecting the Hecla Offer and the
inadequacy opinion provided by U.S. Silver’s financial advisor, shall
be set out in the Directors’ Circular that will be mailed in due course
to each of U.S. Silver’s shareholders in compliance with applicable
securities laws and filed with Canadian securities regulatory
authorities. The Directors’ Circular will be available on SEDAR at www.sedar.com and on U.S. Silver’s website at www.us-silver.com. Shareholders are advised to read the Directors’ Circular carefully and
in its entirety, as it will contain important information regarding
U.S. Silver and the Hecla Offer. If Shareholders have any questions or
require more information they are encouraged to contact the Company’s
proxy solicitation agent, Phoenix Advisory Partners, toll-free at
1-800-240-2133 or outside North America at 201-806-2222 or via email at
inquiries@phoenixadvisorypartners.com.

This press release is specifically deemed to be incorporated by
reference in U.S. Silver’s management information circulated dated July
9, 2012, which has been mailed to shareholders and available on SEDAR
at www.sedar.com and on U.S. Silver’s website at www.us-silver.com.

How to Vote IN FAVOUR of the Combination Transaction with RX Gold

Any U.S. Silver shareholder that has already voted IN FAVOUR of the
proposed combination transaction with RX Gold need not take any action,
as their votes will be counted. Any U.S. Silver shareholder who has
voted AGAINST the proposed combination transaction is encouraged to
change its vote and vote IN FAVOUR of the proposed combination
transaction.

Registered shareholders of U.S. Silver are requested to complete, date,
sign and return the form of proxy that accompanied the Company’s
management information circular. To be valid, the form of proxy must be
signed and received by the proxy department of U.S. Silver’s transfer
agent, Valiant Trust Company, by mail at 310-606 4 Street SW, Calgary,
Alberta, T2P 9Z9, or by facsimile at 1-855-375-6916 or toll-free in
North America at 1-866-313-1872, not later than 5:00 p.m. (Toronto
time) on August 2, 2012.

Non-registered shareholders who receive voting instructions from their
intermediary should carefully follow the instructions provided by their
intermediary to ensure their vote is counted. Non-registered
shareholders are encouraged and can vote via internet at www.proxyvote.com.

If you have any questions that are not answered by U.S. Silver’s
management information circular, or would like additional information,
you should contact your professional advisors. You can also contact
Phoenix Advisory Partners, the proxy solicitation firm engaged by U.S.
Silver, toll-free at 1-800-240-2133 or outside North America at
201-806-2222 or by email at inquiries@phoenixadvisorypartners.com should you have any questions regarding voting of your shares.

How to REJECT the Hecla Offer and Withdraw Tendered Shares

To reject the Hecla Offer, you should do nothing. The Hecla Offer is
open for acceptance until August 31, 2012. Shareholders who have
already tendered their shares to the Hecla Offer can withdraw them at
any time before they have been taken up and accepted for payment by
Hecla. Shareholders holding shares through a dealer, broker or other
nominee should contact such dealer, broker or nominee to withdraw their
U.S. Silver shares. Shareholders may also contact the information agent
retained by U.S. Silver, Phoenix Advisory Partners, toll-free at
1-800-240-2133 or outside North America at 201-806-2222 or via email at
inquiries@phoenixadvisorypartners.com.

About U.S. Silver

U.S. Silver, through its wholly owned subsidiaries, owns and/or operates
the Galena, Coeur, Caladay and Dayrock silver-lead-copper mines in
Shoshone County, Idaho, with the Galena mine being the second most
prolific silver mine in U.S. history. Total silver production from U.S.
Silver’s mining complex has exceeded 217 million ounces of silver
production since 1953. U.S. Silver controls a land package now
totalling approximately 14,000 acres in the heart of the Coeur d’Alene
Mining District. U.S. Silver is focused on expanding the production
from existing operations as well as exploring and developing its
extensive Silver Valley holdings in the Coeur d’Alene Mining District.

Forward Looking Statements

Certain statements in this release may be considered forward-looking
statements, which reflect the board and management’s current beliefs
and expectations and which involve assumptions about expected future
events or results that are subject to inherent risks and uncertainties.
There is significant risk that assumptions and other forward-looking
statements will not prove to be accurate. Many factors could cause
actual future results, conditions or events to differ materially from
the results or outcomes expressed, including risks and uncertainties
related to: receipt of the requisite shareholder and court approvals
for the combination transaction with RX Gold, foreign currency
fluctuations; risks inherent in mining including environmental hazards,
industrial accidents, unusual or unexpected geological formations,
ground control problems and flooding; risks associated with the
estimation of mineral resources and reserves and the geology, grade and
continuity of mineral deposits; the possibility that future
exploration, development or mining results will not be consistent with
the Company’s expectations; the potential for and effects of labour
disputes or other unanticipated difficulties with or shortages of
labour or interruptions in production; actual ore mined varying from
estimates of grade, tonnage, dilution and metallurgical and other
characteristics; the inherent uncertainty of production and cost
estimates and the potential for unexpected costs and expenses,
commodity price fluctuations; uncertain political and economic
environments; changes in laws or policies, foreign taxation, delays or
the inability to obtain necessary governmental permits; and other risks
and uncertainties, including those described in the Company’s public
disclosure record. The foregoing list of factors is not exhaustive.
Accordingly, investors should not place undue reliance on
forward-looking information. U.S. Silver includes in publicly available
documents filed from time to time with securities commissions and the
Toronto Stock Exchange, a thorough discussion of the risk factors that
can cause anticipated outcomes to differ from actual outcomes.
Forward-looking information is provided as of the date of this news
release only, it should not be relied upon as of any other date, and
U.S. Silver assumes no obligation to update or revise this information
to reflect new events or circumstances, except as expressly required by
law. There can be no assurance that the proposed combination
transaction with RX Gold will receive the required shareholder and
court approvals or that any other alternative transaction, including
the Hecla Offer, will be completed.

SOURCE U.S. Silver Corporation