Prospero Silver IP Survey Further Defines 1,400m X 900m Target at Campana Project, Mexico

VANCOUVER, BRITISH COLUMBIA–(Marketwire – Aug. 29, 2011) – Prospero Silver Corp. (TSX VENTURE:PSL) (“Prospero” or the “Company”) announced today the initial results of an IP (Induced Polarization) geophysical ground survey on its Campana project in central Durango State, Mexico. These results are from the southern part of an 11km x 11km area and focus on a large resistivity high located near Campana 1 Hill, the most prominent of several high-resistivity anomalies revealed by a recent Z-TEM (z-Axis Tipper Electromagnetic System) airborne survey (see news release of July 14, 2011). Historic drilling conducted on the northwest fringe of this geophysical anomaly revealed the existence of disseminated gold-bearing polymetallic mineralization over lengths of up to 330m.

The resistivity and chargeability highs from the IP survey are sharply coincidental and indicate that approximately 75% of the anomaly remains unexplored to the east. “The combination of IP and Z-TEM is very effective for exploring under areas of shallow alluvium, which is commonly found in central Mexico,” said Tawn Albinson, Prospero Silver President and head of exploration. “The results from the holes drilled in 2007 and 2008 in the northwest area near Campana 1 Hill, together with this geophysical data, indicate a 1,400m by 900m drill-ready target expanding to the east.”

Cross-sections from the Z-TEM survey show a pipe-like high resistivity structure extending vertically to a depth of 1,400m. While most of the IP lines extend vertically only to about 300m, Line 8.5, which was run at 200m dipole spacing, indicates that the chargeability and resistivity highs persist to depths of 500m. Lines 9, 10 and 11 show the chargeability and resistivity anomaly splitting into two distinct bodies extending to the north.

Figure 3 illustrates in 3D the geology and chargeability anomaly along IP survey Line 9. The Company is organizing a preliminary 1,000m+ drill program to investigate the geology and character of mineralization to the east of the historic drilling.

Historic Drilling and Mining

Historic diamond drill holes near Campana 1 Hill evidenced disseminated mineralization at the northwestern border of the geophysical anomaly, referred to as “the mineralized West Zone.” Holes CAM-11a and CAM-12 bottomed in gold mineralization and indicate the presence of a mineralized East Zone which is open to the east and at depth. The chargeability and resistivity anomalies suggest persistence of the clay alteration and mineralization style of the West Zone.

Mining for silver took place historically from a 100m deep shaft at Campana 1 Hill. The drill holes show the presence of numerous northeast striking late stage calcite-quartz-veinlets carrying high-grade silver values that support the strategy of focussing on the northeast portion of the geophysical anomalies.

Of particular note is a distinct style of disseminated mineralization in the area, as seen at the bottom of hole CAM-12. This hole returned 60.8m averaging 0.223 ppm Au hosted in altered clastic sediments of the Caracol formation. “The Caracol formation is the same sedimentary host as other bulk tonnage deposits in the Mexican Altiplano, such as Penasquito, Zacatecas and Real de Angeles, Aguascalientes,” explained Mr. Albinson. Proposed drill hole CAM-11-01 would be used to determine if this style of mineralization is continuous further to the east both at depth and near surface under the alluvium cover.

Additionally, fluid inclusion data obtained from sphalerites in the west zone indicates mineralization is related to relatively low temperature fluids (less than 235 degrees C), whereas temperatures of homogenization in the deep zone of holes CAM-08 and CAM-11a are as high as 270 degrees C to 280 degrees C, suggesting a vector of increasing temperatures to the east. The proposed follow-up drill program is thus designed to explore both (a) disseminated polymetallic mineralization, and (b) the character of higher grade veins in the East Target Zone.

The high chargeability and resistivity anomaly extends a total distance of 1,400m north-south (from Lines 4 to 9), and is 900m across from east to west. Past exploration has been limited to its northwest margin for a distance of 600m. The anomaly is flanked on both sides by rock units producing a low-resistivity response and which exhibit more localized moderate chargeabilities (6-8 ms/v). Lines measured in other locations indicate the low resistivity areas might represent Tertiary volcanics. Although bentonite layers could account for these chargeability anomalies, drilling will be required to verify the nature of the anomalies.

Additional drilling will be considered targeting the contacts of the resistivity/chargeability anomaly with the enclosing host rocks (characterized by a much lower resistivity response) since they appear as rather steep contacts in the inversion models (Figure 2). The past drill holes did not cross the northwestern contact convincingly, and the eastern contact remains unexplored under alluvium to the east. The high angle contacts could represent either late faults which uplifted the known mineralized zone, or alternatively if they are pre-mineral in age could potentially control larger scale vein-hosted mineralization.

IP work at the Campana Project site is being conducted by Quantec Geoscience Ltd. Data processing and interpretation of the inversion models is being carried out by Quantec Geoscience Ltd., as well as by the Company’s consultant Condor Consulting Ltd. of Lakewood, Colorado.

Tawn Albinson, M.Sc., President of the Company, is a Qualified Person, as defined in NI 43-101, and is responsible for the technical content of this press release.

About Prospero Silver Corp.:

Prospero is a Canadian resource company with the majority of its staff based in Mexico and who work for its wholly owned subsidiary Minera Fumarola, SA de CV (Fumarola). Prospero’s objective is to quickly evaluate the properties currently optioned for their suitability to provide size potential and/or amenability for early production.

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