Western Silver Corp. (Toronto:WTC/AMEX:WTZ) Follow-Up No 5

ONE OF THE WORLD'S LARGEST SILVER DEPOSITS IN CENTRAL MEXICO

Business Summary

Western Silver Corporation is a publicly-traded mineral exploration company focused on discovering and developing silver properties in the Americas.

The company's primary project, the 100%-owned Peñasquito property in central Mexico, is emerging as a large silver-gold-lead-zinc district with significant exploration upside. Peñasquito has been independently confirmed as one of the world's largest undeveloped silver deposits, and is one of the few bulk silver deposits to be economical at recent low metal prices.

Western Silver also has an interest in the San Nicolas zinc-copper project with Teck Cominco and owns the Carmacks Copper project in the Yukon.

The company's technical team is internationally recognized for its outstanding abilities in discovering and developing exploration properties.

Large quantities of gold, zinc and lead, all mineable at current prices, also add to Peñasquito's favorable economics.

This emerging silver district has significant exploration upside.

Drill results reinforce the company's belief that Peñasquito is a district-scale mineral system with multiple deposits at different locations on the 147-square mile property.

Both Peñasquitoand San Nicolas, another company development property, are located in Zacatecas State, central Mexico, a well-established mining region with excellent infrastructure.

A milestone-driven company

Western Silver is moving forward systematically to develop its key Peñasquito property, reduce overall risk, strengthen the company and build and nurture partnerships.

In order to add value in the year ahead, the company plans to:

• Complete the pre-feasibility study on Peñasquito's Chile Colorado zone.
• Estimate the resource at the property's Peñasco zone, also known as the Outcrop Breccia.
• Evaluate the high-grade intersection at La Palma in the northeast region of Peñasquito.
• Evaluate the significance of the property's El Sotol and El Chamisal discoveries.
• Complete delineation drilling at Peñasquito's Azul NE and Luna Azul Zones.
• Maximize the value of assets outside of Peñasquito.
• Add U.S. influence to the company's Board of Directors.
• Strengthen management.
• Continue to nurture and build relationships with partners outside Peñasquito

Recent Developments: Western Silver prices CAD 56 million cross border equity financing

Western Silver Corporation has announced that, in connection with the previously announced filing of a preliminary short form prospectus in all provinces of Canada relating to the issue of common shares and a registration statement relating to those securities with the Securities and Exchange Commission in the United States, it has entered into an underwriting agreement with a syndicate of underwriters led by Orion Securities Inc. and CIBC World Markets Corp. and including Kingsdale Capital to issue to the public 5,500,000 common shares from treasury at a price of CAD 10.25 per common share for gross proceeds of CAD 56,375,000.

The company has granted the underwriters an option to purchase an additional 825,000 common shares at the offering price for a period of 30 days from the closing of the offering.

The proceeds of the offer are expected to be used to fund the further development of the Peñasquito Project and for general corporate purposes.

Fundamental Considerations: The rising silver demand

Silver is used for industrial applications, decoration, photography, jewelry & silverware. Together, these three categories represent more than 95 percent of annual silver consumption. In 2000, 378 million ounces of silver were used for industrial applications, while over 230 million ounces of silver were committed to the photographic sector, and 281 million ounces were consumed in the jewelry and silverware markets.

Silver is in demand because it has a number of unique properties, including its strength, malleability and ductility, its electrical and thermal conductivity, its sensitivity to, and high reflectance of, light and the ability to endure extreme temperature ranges. Silver's unique properties restrict its substitution in most applications. Choose from the following list to learn more about some of the various applications of silver:

Electrical and Electronics

Silver is the best electrical conductor of all metals and is hence used in many electrical applications, particularly in conductors, switches, contacts and fuses. Contacts, a junction between two conductors that can be separated and through which a current can flow, account for the largest proportion of electrical demand. Silver is invaluable in the manufacture of circuit breakers and motor controls.

In electronics, silver is also widely used. Uses include silk-screened circuit paths, membrane switches, electrically heated automobile windows, and conductive adhesives. Every time a home owner turns on a microwave oven, dishwasher, clothes washer, or television set, the action activates a switch with silver contacts that completes the required electrical circuit.

Medical Applications

While silver's importance as a bactericide has been documented only since the late 1800s, its use in purification has been known throughout the ages. Early records indicate that the Phoenicians, for example, used silver vessels to keep water, wine and vinegar pure during their long voyages. In America, pioneers moving west put silver and copper coins in their water barrels to keep it clean. In fact, "born with a silver spoon in his mouth" is not a reference to wealth, but to health. In the early 18th century, babies who were fed with silver spoons were healthier than those fed with spoons made from other metals, and silver pacifiers found wide use in America because of their beneficial health effects.

Silver also has a variety of uses in pharmaceuticals. In fact, silver sulfadiazine is the most powerful compound for burn treatment. It is used by every hospital in North America for burn victims to kill bacteria and allow the body to naturally restore the burn area, and, indeed, it is used world-wide. In another application, polyurethane central veínous catheters are impregnated with silver sulfadiazine and chlorhexidine to eliminate catheter-related bacteria.

In a world concerned with disease transmission, silver is being increasingly tapped for its bactericidal properties and is used in treatments for conditions ranging from severe burns to Legionnaires' Disease.

Water Purification

Silver is employed as a bactericide and algaecide in an ever-increasing number of water purification systems in hospitals, remote communities and, more recently, domestic households. Silver ions have been used to purify drinking water and swimming pool water for generations. New research into silver compounds is providing physicians with powerful, clinically effective treatments against which bacteria cannot develop resistance.

Photography

When Joseph Nicephore Niepce created the first photographic image obtained through a camera-like device in 1813, it was silver nitrate that made it possible.

Although digital photography is increasing, silver-based photography will retain its pre-eminence due to its superior definition and low cost. An estimated 230 million troy ounces of silver were used worldwide in 2000 for photographic purpose.

William Conrad Roentgen's discovery of x-rays in 1895 led to his realization that they activate silver halide crystals. This revolutionized medical diagnosis. Radiographic use of silver worldwide consumed 78 million troy ounces in 2000. Medical uses aside, X-ray inspection is essential to ensure integrity of metallic castings from small truck axles to the huge aircraft-carrier steam valves used to propel airplanes from a flight deck. Of all the inspection techniques, it is the image on a silver halide x-ray film that provides the clearest indication of flaws deep within metallic components.

Batteries

The silver battery provides the higher voltages and long life required for quartz watches.

In fact, over 1.4 billion silver oxide-zinc batteries are supplied to world markets yearly, including miniature-sized batteries for watches, cameras, and small electronic devices and larger batteries for tools and commercial portable TV cameras.

Coins

23,851,873 ounces of silver were issued in the form of silver coins in 1995.

Bearings

Steel bearings electroplated with high purity silver have greater fatigue strength and load carrying capacity than any other type and are hence used in various hi-tech and heavy-duty applications.

Jewelry and Silverware

Silver possesses working qualities similar to gold but enjoys greater reflectivity and can achieve the most brilliant polish of any metal. To make it durable for jewelry, however, pure silver (999 fineness) is often alloyed with small quantities of copper. In many countries, sterling silver (92.5% silver, 7.5% copper) is the standard for silverware and has been since the 14th century.

The copper toughens the silver and makes it possible to use sterling silver for cutlery, bowls and other decorative items such as picture frames.

Brazing and Soldering

In 2000, 38 million ounces of silver were used for brazing and soldering in industrial and electronics applications.

Catalysts

A worldwide inventory of some 23 million ounces of silver is in daily use for catalytic oxidation in chemical reactors, principally in the plastic industry.

Electroplating

The ease of electrodeposition of silver accounts for silver's widespread use in coating. The plating thickness of some items, such as fuse caps, is less than one micron. Coatings of two to seven microns are normal for heavy-duty electrical equipment.

Solar Energy

Silver paste is used in 90 percent of all crystalline silicon photovoltaic cells, which are the most common type of solar cell. All silicon cells used in space to power satellites use silver in the form of evaporated metal to make the electrical contact.

Drawing down inventories

Approximately $ 70 of silver only per fully diluted outstanding share.

Plus added Value through Exploration Properties

Almoloya

Western Silver currently owns a 100% interest in 14,500 hectares (35,815 acres) covering the historic Almoloya zinc-lead-silver-gold district located approximately 45 km east of Parral in southern Chihuahua State. A joint venture initiated in November 2002 with Anglo American Mexico S. A. de C. V. as operator was terminated by Anglo American in July 2003.

Anglo American's systematic program of geology, geochemistry and geophysics identified several drill targets that were deemed by its management to be inconsistent with longterm strategies and objectives. All Anglo American claims and data have been transferred to Western Silver.

San Jeronimo

This property is located 20 km south of the city of Zacatecas in the heart of Mexico's most prolific silver belt known as the Faja de Plata. Western Silver and Cordilleras Silver Mines LDC, a wholly- owned subsidiary of Apex Silver Mines Limited, completed a joint venture agreement in 2002. The agreement provides Apex with the right to earn a 70% interest in the property by making all option and tax payments through March 2005 (USD 1.18 million in total). Apex may gain an additional 10% interest by arranging financing to place the mine into commercial production.

Apex made tax and option payments for 2004 and intends to drill the Loreto vein system this year, where sampling and limited drilling by Western Silver as demonstrated potential for both high grade and bulkmineable vein and stockwork silver mineralization.

El Pirul

Western Silver and Apex jointly agreed during 2003 to terminate exploration for massive sulfide deposits on claims jointly owned by both parties in the northern part of the Zacatecas silver district. The results of mapping and geophysics were not sufficiently encouraging to justify the time and expenses involved with land acquisition and property access agreements in the area.

Las Cuatas

Western Silver owns a 100% interest in the Las Cuatas 5 and 6 claims located approximately 10 km north of the San Nicolas deposit. The claims, part of the Ramos property, cover a large undrilled coincident magnetic and gravity anomaly. Drilling is planned during the first quarter of calendar 2005.

Technical Considerations

The silver price bounced off its solid support and will likely launch a further attack at the 8-dollar resistance zone.

Once the silver price starts moving up again, which can only be a matter of time, the share price of Western Silver will also quickly advance to the $ 13 level and beyond. It is therefore an excellent time o accumulate shares of this solid company.

Our recommendation: BUY!