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 Vancouver, B.C�MAG Silver Corp. (TSX: MAG) (AMEX: MVG)
(�MAG�) is pleased to announce an independently prepared National
Instrument 43-101 ("NI 43-101") compliant resource update for the
Juanicipio project located in Zacatecas State, Mexico. MAG holds a 44%
interest and Fresnillo plc (�Fresnillo�) owns the remaining 56% interest in
the project at Juanicipio through the Minera Juanicipio S.A. de C.V. joint
venture company (the "Juanicipio Joint Venture"). Fresnillo is
the operator of the Juanicipio Joint Venture. This Indicated and Inferred
resource estimate (the "2009 Independent Resource Estimate") has
been prepared by Scott Wilson Roscoe Postle Associates Inc. (�Scott Wilson
RPA�). Scott Wilson RPA was initially engaged by MAG to carry out
this estimation as part of the formal valuation process being completed
pursuant to Multilateral Instrument 61-101 in connection with the
announcement by Fresnillo of its intention to make an insider bid for
MAG. The formal valuation was suspended on February 1, 2009 as a
result of the Independent Committee's determination that a proper valuation
cannot be completed without critical information which Fresnillo has
refused or neglected to provide to MAG or the independent valuator.
MAG CEO, Dan MacInnis commented: "Upgrading the resource to an
Indicated and Inferred Mineral Resource is a critical step in advancing the
Juanicipio Joint Venture and MAG is extremely pleased with the high grade
and size of the Indicated Resource Estimate and the overall contained
silver ounces. We are also delighted that Scott Wilson RPA completed
its resource estimate in such a timely fashion. Earlier today,
Fresnillo released information from an audited mineral resource estimate
for the Juanicipio Joint Venture in a presentation at the 2009 Global
Metals and Mining Conference that differs significantly from the Scott
Wilson RPA independent resource estimate. MAG has not been given the
necessary data to fully explain the discrepancies in the two current
estimates or to reconcile Fresnillo's 2009 numbers with their earlier
resource estimate, but we are highly confident that Scott Wilson RPA's
independent work demonstrates the true measure of this world class silver
deposit." Mr. MacInnis concluded: "MAG is deeply concerned
that this appears to be yet another facet of Fresnillo's strategy to keep
MAG and its shareholders in the dark about the true value of the Juanicipio
project, while Fresnillo attempts to acquire control of MAG through a
lowball take-under offer that is not in any way reflective of the true
value of MAG's world class assets."
Highlights of the 2009 Independent Resource Estimate
The 2009 Independent Resource Estimate was prepared for MAG by Scott Wilson
RPA, a pre-eminent independent mining and geological consulting firm.
This new Valdeca�as Vein resource estimation includes infill-drilling done
during 2008, which gave sufficient drilling density to allow classification
of the first Indicated Resources for the Valdeca�as Vein. These Indicated
Resources are of a higher degree of confidence than the previous Inferred
Resource and are considered suitable for mine planning purposes.
The new 2009 Independent Resource Estimate confirms Valdeca�as (including
the Hanging Wall Vein) as a world class deposit with an Indicated Resource
of 3.88 million tonnes of 972 grams per tonne (g/t) (28.1 ounces per ton)
silver, 2.05 g/t gold, 2.10% lead and 3.76% zinc. There is an
additional Inferred Resource (Valdeca�as, Footwall Veins and the Stockwork
Zone) of 8.24 million tonnes of 549 grams g/t (15.9 ounces per ton) silver,
1.44 g/t gold, 1.87% lead and 2.94% zinc.
The total contained metals in the Indicated Resource are 121 million ounces
of silver, 255,000 ounces of gold and 180 million pounds of lead and 321
million pounds of zinc. The Inferred Resources contain an additional 145
million ounces of silver, 381,000 ounces of gold and 339 million pounds of
lead and 534 million pounds of zinc.
MAG�s 44% share of the silver contained in the Indicated Resource category
is 53 million ounces of silver plus 64 million ounces of silver in the
Inferred Resource category.
2009 Independent Resource Estimate Detail
The resource estimation information contained in the 2009 Independent
Resource Estimate for the Valdeca�as, Footwall, and Hanging Wall Veins and
the Stockwork Zone is presented in the table below:
Juanicipio Joint Venture (100%)
(44% MAG Silver / 56% Fresnillo plc)
Mineral Resource Estimate to February 23, 2008
------------------------------------------------------------------------------------------------
Contained Metal
Resource
NSR ----------------------
Category Tonnes
Ag Au Pb
Zn US$/ Ag M Au K Pb M Zn M
and Zone millions g/t
g/t % % tonne
oz oz lbs
lbs
------------------------------------------------------------------------------------------------
Indicated
------------------------------------------------------------------------------------------------
Valdecanas
Vein
3.47 969 1.94 2.19 3.91
383 108 217 168 299
------------------------------------------------------------------------------------------------
Hanging
Wall Vein 0.41 1,002 2.94
1.29 2.46 400 13
38 12 22
------------------------------------------------------------------------------------------------
Total
Indicated 3.88
972 2.05 2.10 3.76 385
121 255 180 321
------------------------------------------------------------------------------------------------
Inferred
------------------------------------------------------------------------------------------------
Valdecanas
Vein
6.15 660 1.52 2.33 3.64
273 131 302 316 493
------------------------------------------------------------------------------------------------
Footwall
Vein
0.50 428 1.58 0.58 0.61
174 7 26
6 7
------------------------------------------------------------------------------------------------
Hanging
Wall Vein 0.11
609 0.43 0.64 1.48
219 2 2
2 4
------------------------------------------------------------------------------------------------
Stockwork
Zone
1.47 122 1.11 0.48
0.95 66 6
52 16 31
------------------------------------------------------------------------------------------------
Total
Inferred 8.24
549 1.44 1.87 2.94 230
145 381 339 534
------------------------------------------------------------------------------------------------
Footnotes for Juanicipio Joint Venture resource table.
1. CIM Definition Standards have been followed for classification of
mineral
resources.
2. Mineral resource blocks are within wireframes constructed with a minimum
true thickness of 1.5 metres and a minimum NSR value of US$50
per tonne,
which is the effective cut-off. All blocks within the
wireframes are
reported as mineral resource. Approximately 1% of the
indicated tonnes
and 6% of the inferred tonnes have values less than US$50 per
tonnes but
are included for continuity.
3. NSR values are calculated in US$ using factors of $0.33 per g/t Ag,
$17.04 per g/t Au, $4.01 per % Pb and $5.57 per % Zn. These
factors are
based on metal prices of US$12.50/oz Ag, US$800/oz Au,
$0.45/lb Pb and
$0.70/lb Zn and estimated recoveries and smelter terms.
4. The mineral resource estimate uses drill hole data available as of
January 29, 2009.
5. Mineral resources are not mineral reserves and do not have demonstrated
economic viability. All figures are rounded to reflect the
relative
accuracy of the estimates; as a result totals may not add.
Scott Wilson RPA has estimated the mineral resources for the Juanicipio
Joint Venture property using results of 52 diamond drill holes available as
of January 29, 2009. 3D Wireframe models were constructed for the
main Valdeca�as Vein, the Footwall (also known as Desprendido) Vein, a
newly interpreted Hanging Wall Vein, and a newly interpreted Stockwall Zone
using a minimum grade of US$50 per tonne and minimum true thickness of 1.5
metres. For the main Valdeca�as Vein, wireframes were extended up and
down dip approximately 100 metres from the nearest drill holes with greater
than US$50/tonne NSR. A wireframe was not constructed for the Encino
Vein since it is represented by a single drill hole to date. Silver,
gold, lead and zinc grades were interpolated into blocks with dimensions of
25 metres (along strike) by 10 metres by 10 metres using an inverse
distance cubed algorithm. Block tonnages were derived
using average density factors for each zone which are based on numerous
specific gravity determinations. The factors are 2.90 t/m3 for the
main Valdeca�as Vein, 2.80 t/m3 for the Footwall Vein, 2.70 t/m3 for the
Hanging Wall Vein, and 2.70 t/m3 for the Stockwork Zone.
Resources were classified as Indicated or Inferred based on drill hole
spacing and apparent continuity. The previous mineral resource was
all classified as inferred, however, the improved drilling density due to
26,050 metres of infill-drilling done during 2008 allows classification of
Indicated Resources, a higher confidence level than Inferred Resources, for
a significant portion of the mineral resources. The Indicated
Resource in the Valdeca�as Vein is in the central part where good
continuity of higher grade resource is reasonably well established with
drill holes spaced at about 100 metres. Most of the Hanging Wall Vein
is classified as indicated because of the good continuity apparent at
approximately 100 metre drill hole spacing.
The Indicated Resource is higher grade than the Inferred Resource because
it is centered on the highest grade portions of the Valdeca�as Vein and
also includes most of the high grade Hanging Wall Vein. The lower
grades seen in the Inferred Resource stem largely from lower grade material
in the up-dip and down-dip projections of the Valdeca�as Vein and from
incorporation of the Footwall Vein and the Stockwork Zone. The latter
two exhibit lower grades but are nonetheless significant contributors to
the overall resource picture. In the deeper portions of the
Valdeca�as Vein, lead and zinc values increase and silver grades
diminish. This is typical of the veins in the Fresnillo District, but
in contrast to most other veins in the district, the base metal values in
the Valdeca�as Vein are high enough to make this deep zone economically
attractive.
The 2009 Fresnillo Resource Estimate
On February 5, 2009, Fresnillo provided MAG with a preliminary resource
estimate prepared internally by Fresnillo personnel. Fresnillo
engaged SRK Consulting to audit this internal resource estimate on behalf
of the Juanicipio Joint Venture. On February 19, 2009, MAG received
an Audited Mineral Resource Statement by SRK (the "2009 Fresnillo
Resource Estimate") which corresponds to the internal resource
estimate prepared by Fresnillo personnel and modifies the resource
classification to comply with the JORC Code. On February 24, 2009,
Fresnillo released key elements of the 2009 Fresnillo Resource Estimate in
a presentation delivered at the 2009 Global Metals and Mining Conference in
Hollywood, Florida.
Compared to the previous Juanicipio Joint Venture resource estimate
prepared by Fresnillo and audited by SRK (the "2008 Fresnillo Resource
Estimate", see MAG press release of June 18, 2008), the tonnage of the
2009 Fresnillo Resource Estimate is somewhat higher but the silver grade is
significantly lower resulting in the contained silver ounces being
significantly lower than Fresnillo's previous estimate. There are
also some significant differences between the 2009 Fresnillo Resource
Estimate and the 2009 Independent Resource Estimate by Scott Wilson RPA as
described below. MAG has not yet been provided with the detailed data
necessary to resolve these discrepancies.
MAG Discussion of the Discrepancy between 2009 Independent Resource
Estimate and 2009 Fresnillo Resource Estimate
MAG CEO, Dan MacInnis commented: "The timing of the Fresnillo
release is highly relevant given Fresnillo's December 1, 2008 announcement
that it intends to make a "take-under" offer to acquire all of
the outstanding shares of MAG it does not already own at a price of US$4.54
per share. This offer price represented a 4.4% discount to the
closing price of the MAG shares on the day before the take-under offer was
announced and currently represents a discount of 20% to the closing price
of MAG's shares on the NYSE Alternext on the last trading day prior to this
press release."
There is a significant discrepancy between the 2009 Independent Resource
Estimate and the 2009 Fresnillo Resource Estimate, particularly in the
total tonnage, silver grade and the contained ounces of silver in the
Indicated Resource category and a significant difference in the Inferred
Resource category. Certain of these details are set out below with
reference to the initial 2008 Inferred Resource:
Comparison Table*
Comparison Table(i)
� ----------------------------------------------------------------------------
� 2009 2009
� 2008 Independent Fresnillo
� Resource Resource Resource
�� Estimation Estimate Estimate
� ----------------------------------------------------------------------------
� Indicated
� ----------------------------------------------------------------------------
� Total Indicated Tonnes millions - 3.88 2.14
� ----------------------------------------------------------------------------
� Total Ag g/t - 972 783
� ----------------------------------------------------------------------------
� Total Contained Metal Ag M oz - 121 53.9
� ----------------------------------------------------------------------------
� Inferred
� ----------------------------------------------------------------------------
� Total Inferred Tonnes millions 7.3 8.24 6.63
� ----------------------------------------------------------------------------
� Total Ag g/t 1,011 549 601
� ----------------------------------------------------------------------------
� Total Contained Metal Ag M oz 237.8 145 128.1
� ----------------------------------------------------------------------------
� (i) Table prepared by MAG using inputs from 2008 Resource Estimate as
� disclosed in MAG's June 18, 2008 press release, the 2009 Independent
� Resource Estimate as disclosed in this press release and the 2009
� Fresnillo Resource Estimate based on resource estimate numbers disclosed
� by Fresnillo on February 24, 2009 in a presentation at the 2009 Global
� Metals and Mining Conference in Hollywood, Florida, adjusted to separate
� Indicated and Inferred Resources and to represent a 100% interest as set
� out in the 2009 Fresnillo Resource Estimate.
* Table prepared by MAG using inputs from 2008 Resource Estimate as
disclosed in MAG's June 18, 2008 press release, the 2009 Independent
Resource Estimate as disclosed in this press release and the 2009 Fresnillo
Resource Estimate based on resource estimate numbers disclosed by Fresnillo
on February 24, 2009 in a presentation at the 2009 Global Metals and Mining
Conference in Hollywood, Florida, adjusted to separate Indicated and
Inferred Resources and to represent a 100% interest as set out in the 2009
Fresnillo Resource Estimate.
The 2009 Fresnillo Resource Estimate is particularly perplexing and
troubling in light of the following key factors:
- the 2009 Fresnillo
Resource Estimate numbers cannot be reconciled to the 2009 Independent
Resource Estimate or even to Fresnillo's own work from only eight
months ago.
- MAG was not afforded
any opportunity to comment on, or provide input relating to, the
preparation of the 2009 Fresnillo Resource Estimate by Fresnillo
personnel. MAG was also provided with the SRK audit statement
only two business days before Fresnillo's disclosure date. As a
result of the delay and Fresnillo's continued efforts to limit the
information available to MAG, MAG and its technical advisors were
never given the opportunity to reconcile the two different resource
estimations prior to their disclosure.
- Fresnillo has
continued to make it difficult for MAG to get access to key joint
venture information. Fresnillo's actions are part of a continued
pattern of behaviour that gave rise to MAG's inability to properly
complete an independent valuation of MAG's securities.
- MAG is deeply
concerned that Fresnillo's actions appear to be another tactic in
Fresnillo's strategy to acquire control of MAG at a
"lowball" price that does not reflect the true value of
MAG's world class assets.
Information Concerning Estimates of Mineral Resources
Cautionary Note to Investors Concerning Estimates of Indicated
Resources
This press release uses the term "Indicated Resources". MAG
advises investors that although this term is recognized and required by
Canadian regulations (under National Instrument 43-101 Standards of
Disclosure for Mineral Projects), the U.S. Securities and Exchange
Commission does not recognize this term. Investors are cautioned
not to assume that any part or all of mineral deposits in this category
will ever be converted into reserves.
Cautionary Note to Investors Concerning Estimates of Inferred
Resources
This press release uses the term "Inferred Resources". MAG
advises investors that although this term is recognized and required by
Canadian regulations (under National Instrument 43-101 Standards of
Disclosure for Mineral Projects), the U.S. Securities and Exchange
Commission does not recognize this term. Investors are cautioned not to
assume that any part or all of the mineral deposits in this category will
ever be converted into reserves. In addition, "Inferred
Resources" have a great amount of uncertainty as to their existence,
and economic and legal feasibility. It cannot be assumed that all or any
part of an Inferred Mineral Resource will ever be upgraded to a higher
category. Under Canadian rules, estimates of Inferred Mineral Resources may
not form the basis of feasibility or pre-feasibility studies, or economic
studies except for Preliminary Assessment as defined under Canadian
National Instrument 43-101. Investors are cautioned not to assume
that part or all of an Inferred Resource exists, or is economically or
legally mineable.
Qualified Person
The mineral resources for the Juanicipio Joint Venture disclosed in this
press release have been estimated by Dr. William Roscoe, P.Eng and Mr.
David Ross, P.Geo., both employees of Scott Wilson RPA and independent of
MAG. By virtue of their education and relevant experience Dr. Roscoe
and Mr. Ross are "Qualified Persons" for the purpose of National
Instrument 43-101. The mineral resources have been classified in
accordance with CIM Definition Standards for Mineral Resources and Mineral
Reserves, (December 2005). Dr. Roscoe, P.Eng., and Mr. Ross, P.Geo.
have read and approved the contents of this press release as it pertains to
the disclosed mineral resource estimate. A National Instrument 43-101
technical report documenting the mineral resource estimate will be filed on
SEDAR within 45 days.
About MAG Silver Corp. (www.magsilver.com)
MAG is focused on district scale projects located within the Mexican Silver
Belt. Our mission is to become one of the premier companies in the Silver
Mining Industry. MAG and its joint venture partner Fresnillo plc are
delineating a significant new silver vein discovery on the Juanicipio Joint
Venture in Zacatecas State, Mexico. MAG has also identified a new
silver, lead and zinc discovery at its 100% owned Cinco de Mayo property.
MAG is based in Vancouver, British Columbia, Canada. Its common shares
trade on the TSX under the symbol MAG and on the NYSE Alternext US
(formerly AMEX) under the symbol MVG.
On behalf of the Board of
MAG SILVER CORP.
"Dan MacInnis"
President and CEO
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For further information on behalf of MAG Silver Corp.
Contact Gordon Neal, VP Corp. Development
Website: www.magsilver.com
Phone:
(604) 630-1399
Toll
free:
(866) 630-1399
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Email: info@magsilver.com
Fax: (604) 484-4710
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Neither the Toronto Stock Exchange nor the New York Stock Exchange
Alternext US LLC has reviewed or accepted responsibility for the accuracy
or adequacy of this press release, which has been prepared by management.
This release includes certain statements that may be deemed to be
�forward-looking statements� within the meaning of the US Private
Securities Litigation Reform Act of 1995. All statements in this release,
other than statements of historical facts are forward looking statements,
including statements that address future mineral production, reserve
potential, exploration drilling, exploitation activities and events or
developments. Forward-looking statements are often, but not always,
identified by the use of words such as "seek",
"anticipate", "plan", "continue",
"estimate", "expect", "may",
"will", "project", "predict",
"potential", "targeting", "intend",
"could", "might", "should",
"believe" and similar expressions. These statements involve known
and unknown risks, uncertainties and other factors that may cause actual
results or events to differ materially from those anticipated in such
forward-looking statements. Although MAG believes the expectations
expressed in such forward-looking statements are based on reasonable
assumptions, such statements are not guarantees of future performance and
actual results or developments may differ materially from those in the
forward-looking statements. Factors that could cause actual results to
differ materially from those in forward-looking statements include, but are
not limited to, changes in commodities prices, changes in mineral
production performance, exploitation and exploration successes, continued
availability of capital and financing, and general economic, market or
business conditions, political risk, currency risk and capital cost
inflation. In addition, forward-looking statements are subject to various
risks, including that data is incomplete and considerable additional work
will be required to complete further evaluation, including but not limited
to drilling, engineering and socio-economic studies and investment. The
reader is referred to the Company�s filings with the SEC and Canadian
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