Juanicipio Project Update
Vancouver, B.C. .....MAG Silver Corp. (TSXV:MAG) and Industrias Peñoles announced today the formal signing of their joint venture agreement, effective July 1, 2005, covering MAG's wholly-owned 8,302 hectare Juanicipio Property in Zacatecas, Mexico. Peñoles has completed drilling of two holes on the property of a planned 8,000 metre drill program. This program is targeted for completion by the end of the year and a second drill rig has been moved onto the site with two more drill holes currently underway.
'The program at Juanicipio is now in full swing with two Peñoles drill rigs operating and focused on defining the extent and potential of the high grade intercept of Fresnillo style mineralization in MAG's drill hole JC03-01 (2.0m of 630 g/t silver and 10.8 g/t gold - core recovery 30%). We are pleased to see Peñoles moving aggressively ahead with the drill program" said MAG Silver President, Dan MacInnis.
Industrias Peñoles is the largest silver producer in the world and owns and operates the world's largest silver Mine at Fresnillo. The Juanicipio Joint Venture property is located adjacent to the Fresnillo Mine and boarders Peñoles newest gold silver discovery at El Saucito. The El Saucito vein runs for more than 1.4 kilometres, averages 2 metres in width and hosts 11 g/t Au equivalent. Drilling at this discovery continues to extend the deposit in an east west direction.
The principal features of the agreement are:
1. Peñoles can earn a 56% interest in Juanicipio upon completion of a US$5,000,000 exploration program on or before the end of year 4 of the agreement.
2. During the first year, Peñoles shall incur an obligatory work commitment expenditure of US$750,000. Year 1 expenditures must include a minimum of 3,000 metres of diamond drilling.
3. A flexible and staged exploration program is included in the contract. Exploration work will be supervised by a technical committee comprised of 3 representatives from Peñoles and 2 from MAG Silver. Peñoles and MAG Silver are obliged to share their information in the district. Part of the geological and exploration work will be conducted by MAG consultants and in-house personnel.
4. Exploration results from Juanicipio will be published as appropriate on an ongoing basis, with both companies to agree on the content.
5. Peñoles will subscribe for US$500,000 in MAG shares, at a market based price on signing and an additional US$500,000 in MAG shares, at a market based price, if the contract continues into the second year.
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About Peñoles: Industrias Peñoles, S.A. de C.V. and its subsidiaries make up one of Mexico's largest industrial conglomerates. Since its founding in 1887, this group has been engaged in the sustainable exploitation of non-renewable natural resources. Peñoles is an integral part of Grupo BAL, a private, diversified group made up of independent Mexican companies ranging from mining to insurance to retail. Peñoles' productive operations are currently located in Mexico, where it operates the world's richest silver mine (Fresnillo), the world's fourth largest metallurgical complex in terms of the value of its production, and the largest sodium sulphate plant in the world. These operations make Peñoles the world's largest producer of refined silver, metallic bismuth and sodium sulphate, and a leader in Latin America in refined gold, lead and zinc.
About MAG Silver Corp.: MAG is a Silver exploration company focused on projects located within the Mexican Silver Belt. Our large land inventory is well positioned in mining districts with historical and ongoing large-scale, high-grade silver production. MAG's exploration efforts are engaged in the search for multi-million ounce silver deposits on a district scale. We are committed to the discovery of silver deposits of size and grade that are able to withstand and overcome fluctuations in commodity prices. Our mission is to become one of the premier silver companies in the Silver Mining Industry. MAG is based in Vancouver, British Columbia, Canada and trades on the TSX-V under the symbol MAG.
On behalf of the Board of
MAG SILVER CORP.
President & CEO
For further information on behalf of MAG Silver Corp. contact Gordon Neal
Phone: (604) 630-1399
Toll free: (866) 630-1399
Fax: (604) 484-4710
The TSX Venture Exchange has not reviewed and does not accept responsibility for the accuracy or adequacy of this news release, which has been prepared by management.