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Mexican Silver Mines Provides A Corporate Update and Initiates Review of Strategic Alternatives

Mexican Silver Mines Ltd. (“Mexican Silver”) (TSXV: MSM; Frankfurt WKN: A0MSLE) has responded to the economic downturn which has been felt by the mining industry. The Company has taken proactive steps towards reducing its exploration and overhead costs and ensuring that the Company’s capital is preserved until the market turns around.

Mexican Silver Mines has over $7 million in its treasury and will ensure that these funds are used to leverage opportunities in the current market place and return shareholder value in the medium term. The Company feels that these funds are better used to look for strategic alternatives which are presenting themselves to Mexican Silver Mines rather than in spending these funds on exploration. In today’s market it is cheaper to buy than to explore and drill for production and resources. As such, the Company is evaluating these alternatives while remaining cognizant that enough working capital must always remain in treasury to outlast the market downturn.

Mexican Silver Mines’ management is confident that it will survive this period of market turbulence. The current market conditions, although detrimental to market share value, provides a cash positive Company with phenomenal opportunities to leverage itself and to dramatically grow its asset base. Mexican Silver Mines’ corporate strategy is to focus on cash and cash flow and, as such, any new opportunities that the Company will evaluate will have to provide these things on an immediate basis. The Company sees that this strategic growth should result in the Company coming out of the current market conditions with similar levels of cash on hand but with producing cash flow positive operations and resources in the ground, a position that will lend itself to allowing Mexican Silver to be one of the leading performers at the time of market rebound.

Although results to date are encouraging, Mexican Silver Mines has reduced its staff in Mexico and has slowed exploration work on its properties in Northeastern Mexico. The Company has also reduced its Investor Relations budget as well as corporate overhead, all with the view to conserve cash.

At the shareholders meeting held on October 29th, 2008, all matters placed before the shareholders were approved including the re-election of the directors. The directors and management are Feisal Somji (President and CEO), Roger Norwich (Chairman of the Board), Raul Ramirez Morton (VP Operations), Harry McGucken, Jim Glass and Joseph O’Farrell. Brian Farrell remains as CFO and Daniel Kenney remains as Corporate Secretary to the Board of Directors.

Mexican Silver Mines’ exploration properties will continue to generate value for shareholders. The Company has recently focused on the Vallecillo and Mamulique projects. The exploration work has been slowed down dramatically; however, results from previous work are now in for the Mamulique project. The Company completed its first phase drilling program and the commencement of underground rehabilitation work at its zinc-lead-silver project located in the historic Mamulique mining district (refer to website for figures 1, 2 & 3 and the news release dated July 7, 2008).

Mamulique First Phase Drilling

The first phase drilling program consisted of six boreholes (three in Santo Nino & three in Victoria – refer to figure 2 on website for drill hole location) aggregating 1,561.2 meters. The drill holes tested the immediate vicinity of the Santo Nino and Victoria shafts and tunnels. The six drill holes were very encouraging and yielded significant mineralized intercepts as shown in Table I (see website) which identifies geologically distinct mineralized stretches ranging from 0.50 to 4.80 meters wide with moderate to very high zinc grades, moderate lead assays and minor silver content.

The first three holes sited in the Santo Nino shaft area confirm the persistent strike length continuity of the veins and veinlets within the 80 meter wide by 1,600 meter long mineralized corridor as well the depth extension to at least 150 meters from the deepest underground opening (refer to figure 4 on the Company’s website). Likewise, the second set of three holes, sited in Victoria Mine area, confirmed the same depth continuity and strike length persistence.

Sizeable tonnages of mineralized materials (50 to 100 Kt with grades of 3 to 5% zinc) are currently stock piled near various portals and shaft locations in the historic mine area (refer to website for figures 5 and 6). The Company is currently evaluating if these on surface stock piles can be turned into cash flow in the immediate term.

Although only the central 600 meter stretch of the 1,600 meter strike length and only the top 250 meters of the 500 meter deep mineralized depth have been drilled to date, higher zinc and silver content veins of more consistent width are suggested to occur at depth particularly on the east side of the mine area toward the Santo Nino shaft, as well as further eastward. This positive development will be further explored in the future.

The first phase drilling program is being complemented with an ongoing characterization of the geology and mineralization of the various veins/veinlets (feeder zones) and mantos (bleeder zones). Aside from characterizing the sulfide mineral deportment and mineralogical zoning, a better understanding of the mineral content and vein/mineralized volume correlation is now being obtained. This information is critical in establishing the morphology and extent of the mineralized volume.

Mamulique Underground Rehabilitation

The Company has hired a mining contractor from Mexico to initiate rehabilitation of the Santo Nino shaft and related underground drifts and crosscut drives for the purposes of second phase drilling from underground and for access to these workings for sampling and future mine re-opening. The rehabilitation and a concurrent detailed mapping and sampling program of these underground workings is expected to reach completion within six to eight weeks (see website for photos of ongoing rehabilitation of the Santo Nino shaft area).

In the Victoria Mine area, Mexican Silver Mines has rehabilitated six tunnels in four levels (refer to figure 6 on the Company’s website) aggregating about 600 meters, and has collected almost 150 regular (every 5 meters) roof and face samples for the feeder zones and top to bottom rib samples for the mantos (bleeder) zones. Based on Niton Analysis of pulp samples generated from the sample population of veins and mantos with true width ranging from 0.20 to 1.80 m, expected grade ranges are as follows:

Please find the table under the following link: http://www.irw-press.com/dokumente/MexicanSilver_191108_E.pdf

Other tunnels immediately outside, but adjacent to, the 80 meter wide by 1,600 meter long zone are also currently being evaluated in order to be included in the final evaluation of the resource estimates at Mamulique.

Once the requisite density of validated data points has been obtained from the Company’s drilling and sampling program, geostatistical modeling will be pursued to establish a data driven characterization of the distribution of metal values within the established mineralized volume/solid.

A second phase drilling program will provide data for mineralized volume and the grade distribution, which will result in the generation of the mineral resource block model which is anticipated to be the basis for an NI 43-101 mineral resource estimate. This work, however, will wait until market conditions are more favourable.

Property History

The Mamulique mining district is located 30 kilometers northeast of Monterrey, Mexico at the southern most tip of Mexican Silver Mine’s Anillo de Fuego concession. A number of historic mines have been located in the district, including the Santo Nino mine and the Victoria mine. Servicio Geologico Mexicano (SGM) reported that the historical production of the Santo Nino mine was approximately 500 tons per month of high grade zinc ore (up to 40%) with additional silver and lead values.

The national highway 85 between Monterrey, Mexico and Laredo, Texas transects the Mamulique area. Mexican Silver Mines has identified previously unrecognized lead-zinc occurrences in the road cuts consisting of structurally controlled vein and mantos-type mineralization. Surface and initial underground mapping and sampling uncovered an 80 meter wide by 1,600 meter long corridor with at least six sub-parallel strike persistent veins and minor subsidiary vein zones (refer to figure 2 on website).

Figures I through VII, Table I and photos showing rehabilitation of Santo Nino shaft area, are available for review at www.mexicansilvermines.com.

About Mexican Silver Mines

Mexican Silver Mines is a silver focused junior resource Company developing three former silver producing properties in northeastern Mexico. To learn more about Mexican Silver Mines, please visit: www.mexicansilvermines.com.

Mr. William Dynes, P. Geol., is the Corporation's nominated Qualified Person responsible for monitoring the supervision and quality control of the programs completed within its properties. Mr. Dynes has reviewed and verified the technical information contained in this news release.

ON BEHALF OF THE BOARD OF
MEXICAN SILVER MINES LTD.
__________________________________
Feisal Somji, B.Sc., MBA
President and Chief Executive Officer
FOR FURTHER INFORMATION, CONTACT:

Mexican Silver Mines Ltd.
Feisal Somji, President & CEO
Phone: 403.236.5089
Fax: 403.398.0693
Email: info@mexicansilvermines.com
Web: www.mexicansilvermines.com

Investor Relations
Jamie Mathers, Ascenta Capital Partners Inc.
Phone: 604.684.4743 ext. 236
Phone: 1.866.684.4209
Email: jamie@ascentacapital.com

This news release contains forward-looking information including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations and potential mineral recovery processes. Forward-looking information includes disclosure regarding possible future events, conditions or results of operations that is based on assumptions about future economic conditions and courses of action, and therefore, involves inherent risks and uncertainties. When used in this news release. The words "estimated", "plan", "anticipated", "expected", "intend", "believe", and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Mexican Silver to be materially different from any future results, performance or achievement expressed or implied by such forward-looking statements. For any forward-looking information given, management has assumed that the analytical results it has received are reliable, and has applied geological interpretation methodologies which are consistent with industry standards. Although management has a reasonable basis for the conclusions drawn, there can be no assurance that forward-looking statements will prove to be accurate and actual results may differ materially from those currently anticipated in such statements. For such statements, we claim safe harbour.

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy and accuracy of this information.


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