A second hole, PRIN12-02 was collared to test the Princesa zone below historic hole PRIN 62 and intersected a 33.7 metres envelope of low grade mineralization, including a higher grading intersection of 3 metres assaying at 32.5 grams silver per tonne, 0.9% lead and 0.74% zinc.

A list of the complete drill results is included in the table below.

This program is part of a drill campaign designed to explore the Princesa mineralized structure along 2.5 km of strike and to a depth to 250 meters.

To view the map associated with this press release, please visit the following link:http://media3.marketwire.com/docs/CaracaraMap100112.jpg.

Permitting and Regulatory Update

On June 6, 2012, a national decree was published which brought into law amendments to the procedures required for the granting of mineral exploration permits in Peru. This new decree requires a consultation with the Ministry of Culture to determine if native people live in the proposed exploration work areas and that no work can begin until this consultation led by government personnel has been completed.

On August 15, 2012 the Ministry of Environment and Mines (“MINEM”), although having issued to Solex Del Peru, Caracara’s Peruvian subsidiary, a valid permit to explore in March 2012, noted that Caracara must comply by the new decree issued in June.

After carefully reviewing the issued permit and the timing of the new decree for consultation with the Ministry of Culture, management determined that in order to fully comply with all Peruvian laws, drilling be halted until the consultation process has been completed.

In September management in Peru met with the Peruvian authorities and it was determined that there are no native communities in our working areas. Additionally, Caracara’s Peruvian subsidiary company has valid community agreements with all of the communities in our operating areas.

As a result of the consultation with the Ministry of Culture and MINEM, Caracara has met most of the obligations of the new decree affecting exploration permitting in Peru and anticipates resuming drilling at Princesa in October.

Quality Control-Quality Assurance Program

All samples have been assayed by CIMM PERU, an association between the Mining and Metallurgical Research Center of Chile (CIMM) and Certifications of Peru (CERPER). CIMM is ISO 9001:2008 certified.

Field samples consisting of 3-5 kg of core were crushed to 90% passing through a 1.70 mm screen and a 250 gram split is pulverized to 85% passing through a 75-micron mesh. Assays are completed for 35 elements via a multi acid digestion ICP OES. Gold, silver, lead and zinc are reanalyzed once the original results exceed the limit of detection by gravimetric assay for gold and multi acid ASS for silver, zinc and lead.

The Quality Control and Quality Assurance program includes the insertion of two standards, two blanks and one duplicate sample in every batch of 25 samples.

Qualified Person

Mr. Alain Vachon, Geol. Eng, Caracara Silver’s Vice President – Exploration, and the Company’s Qualified Person as defined by National Instrument 43-101, has reviewed and approved the contents of this press release.

About the Company

Caracara Silver Inc. is focused on acquiring, exploring and developing silver, zinc and lead resources to meet the world’s growing demand. The Company holds 34 concessions totalling 24,600 hectares in Southern Peru and is actively exploring its holdings in Peru and assessing new projects.

Caracara has 50,821,167 shares issued and outstanding and trades on the Toronto Stock Exchange Venture under symbol: CSV.

This news release may contain forward-looking statements that are based on Caracara Silver Inc.’s expectations, estimates and projections regarding its business and the economic environment in which it operates. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Therefore, actual outcomes and results may differ materially from those expressed in these forward-looking statements and readers should not place undue reliance on such statements. Statements speak only as of the date on which they are made, and Caracara Silver Inc. undertakes no obligation to update them publicly to reflect new information or the occurrence of future events or circumstances, unless otherwise required to do so by law.

Neither the 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 and has in no way passed upon the merits of the qualifying transaction and has neither approved nor disapproved of the contents of this press release.