• Exploration

EXPLORATION – Juanicipio Project

The Valdecañas Vein System is a multi-stage, high-grade vein swarm comprising the Valdecañas vein, characterized by large dilatant zones (bulges) in its east and western reaches, the hangingwall Anticipada Vein, the Pre-Anticipada Vein, several en echelon splays and a series of subparallel northeast-trending cross veins that comprise the Venadas-Valentina Vein family.  The recent discovery of these northeast-trending veins close to the planned production areas, coupled with the expanding high-grade Anticipada and Pre-Anticipada veins, should add significantly to the growing mineral endowment of the project and, importantly, provide considerable mining flexibility throughout an extended mine life.  Deep mineralization on the Valdecañas Veins remains open laterally for several hundred metres to the claim boundaries on both ends; to the east claim boundary for Anticipada; and Pre-Anticipada and to depth across all veins.

Exploration drilling at Juanicipio resumed in May of 2020 after a temporary COVID-19 halt imposed by the Mexican Government (see COVID-19 Juanicipio Project above).  Since then, full drilling has resumed with five rigs, including three dedicated to Devico directional drilling. Drilling is currently focused on continued step-out and infill drilling of the Valdecañas Deep Zone.  Holes are also being directed at the Anticipada Vein and NE-trending Venadas Vein family targeting them independently from the Valdecañas Vein. Despite the temporary COVID-19 restrictions noted above, the full Juanicipio 2020 drilling program is expected to be completed as planned in 2020.

EXPLORATION – Deer Trail Project

In late 2018, the Company entered into an option agreement with a private group whereby MAG has the right to earn 100% ownership interest in a company which owns the Deer Trail project in Utah. MAG paid $150K upon signing the agreement and another $150K subsequent to September 30, 2020.  To earn 100% interest in the property, MAG must make remaining cash payments of $1,700K over the next 8 years and fund a cumulative of $30 million of eligible exploration expenditures ($3,495K so far incurred to September 30, 2020) by 2028. Upon MAG’s 100% earn-in, the vendors would retain a 2% NSR. 

The Deer Trail mine historically exploited high-grade silver-gold-lead-zinc-copper Carbonate Replacement Deposit (CRD) mineralization that MAG believes is related to a nearby Porphyry Copper-Molybdenum intrusive center that is potentially the source of the district’s mineralization. This model suggests that mineralization should be better developed somewhat deeper in the carbonate host stratigraphy and be continuous between the Deer Trail Manto and the porphyry source of the system. It also suggests that additional mineralized “spokes” may be present surrounding this porphyry “hub”. Exploration is advancing through active drilling near the historic mine and surface-based work to better define the porphyry center and trace mineralization outwards from it back towards the mine and into the additional mineralized areas that surround it.                                                                                   

The Deer Trail Project includes both patented and unpatented claims (approximately 5,600 ha) encompassing the historic Deer Trail Mine and the adjoining Alunite Ridge area in Piute County, Utah.  The Deer Trail Project satisfies MAG’s top criteria when exploring for large CRD systems, specifically: the presence of high silver grades; location on a deep-penetrating regional-scale fault that hosts major CRD-family deposits; location at the top of a thick section of favorable host rocks; and an identifiable plumbing network of faults and mineralization (see Press Release September 10, 2020).

MAG’s initial exploration strategy on this property is already well advanced, and is to project the geometry of the feeder structures of the known CRD mineralization to depth into inferred underlying limestone host rocks to seek larger scale silver-rich massive sulfide replacements and potentially mineralized skarn. A deep-looking underground 2-D seismic survey was completed subsequent to the quarter end in October 2020.  The underground seismic survey results should assist in mapping out favorable host rocks at depth and in refining final drill hole angles and depths for the Phase I drill program.

Phase 1 successfully fulfilled all three of its planned objectives by:

  1. Confirming the presence of a thick section of more favorable carbonate host rocks (the predicted “Redwall Limestone” or “Redwall”) below the Deer Trail Mine;
  1. Confirming and projecting two suspected mineralization feeder structures to depth; and
  1. Intercepting high-grade mineralization related to those structures in host rocks below what was historically known.

Notably, all three holes bottomed within multi-phase porphyritic granitoids affected by later sericite-pyrite alteration with modest Copper and Silver mineralization along their upper contacts (including 0.86m grading 1.7% Copper and 64 g/t Silver in hole DT20-01). The overall features suggest that this mineralization was sourced from a later intrusive phase.

The principal goal of Phase 1 drilling was to locate the Redwall Limestone, a thick, clean limestone unit hypothesized to be a more favorable host rock than the thinly layered Callville Formation, which hosts the deepest historically known mineralization in the mine area.  The likely presence of the Redwall was indicated by regional occurrences and all three holes cut 215 m - 320 m of highly altered Redwall before bottoming in granitoid intrusions.  All three holes cut high-grade sulphide mineralization in/near projected feeder structures within the Callville before reaching the Redwall (Table 1, Figure 1).  DT21-02 intercepted 0.50 m (core length) of sulphides grading 426 grams per tonne (“g/t”) (12.4 ounces per ton (“opt”) Silver, 6.5 g/t (0.2 opt) Gold, and 17.1% Lead plus Zinc within a 3.5 m breccia zone along the Red Fissure Fault; principal feeder to the historic Deer Trail Manto.  DT21-03 cut 1.90 m (core length) of manto-style (bedding parallel) sulphides grading 952 g/t Silver (27.8 opt), 38.2 g/t (1.1 opt) Gold, and 9.2% Lead plus Zinc close to the Wet Fault, a principal feeder to the 3400 Area manto zone. DT20-01 was designed simply to locate the Redwall at shallow depth, but before reaching the Redwall, it cut a ~20 m (core length) feeder zone in the Callville containing a 2.30 m (core length) mineralized strand that reported 1.0 g/t Gold and 101 g/t Silver.

Phase 2 drilling commenced on August 20, 2021.  The first hole of Phase 2 is an offset of DT21-03 designed to test the Wet fault 150 m deeper where it cuts through the Redwall.

“We are very pleased to have our first holes in this promising, district-scale play satisfy all three of our initial objectives, including finding high-grade, silver and gold-rich mineralization just above what should be excellent host rocks”, said George Paspalas, MAG Silver’s President and CEO.  “These initial results validate our exploration model and the high silver grades at depth seem to indicate very large-scale zoning, which strongly reinforces our belief that the Deer Trail system is extensive and well mineralized.  We eagerly look forward to the results of the ongoing Phase 2 drilling.”

Sustainability and ESG

Achieving excellence in Environmental, Social and Governance (“ESG”) practices is a core component of MAG’s business – it is not only the right thing to do, but also essential to the future growth and profitability of the Company. MAG is committed to maintaining best-in-class corporate governance practices and having a positive environmental and social impact. MAG’s commitment to ‘zero harm’ prioritizes the health, safety and well-being of its people and the communities in which they live and work. At the Deer Trail Project, MAG’s proactive safety programs have resulted in zero lost-time injuries to date. MAG takes a ‘shared value’ approach to local development activities to promote sustainable economic and social benefits. MAG has a robust stakeholder engagement program which includes consultation with local stakeholders, municipal and regional leaders, and government agencies. MAG is committed to wise environmental stewardship and fully complies with, and strives to exceed, all applicable laws and regulations.  Since acquiring the Deer Trail Project, MAG has proactively remediated legacy environmental deficiencies and safety hazards.

Table 1: Phase 1 Drilling Highlights


HOLE ID
FROM
(M)
TO
(M)
CORE LENGTH
(M)1
AU
(G/T)2
AG
(G/T)2
PB
(%)
ZN
(%)
CU
(%)
DT20-01 679.24 681.54 2.30 1.0 101 0.1 0.2 <0.1
and 1147.42 1148.28 0.86 0.0 64 0.1 0.1 1.7
DT21-02 1161.23 1161.73 0.50 6.5 426 9.2 7.9 1.8
incl. 1161.23 1161.40 0.17 13.3 831 15.7 13.7 3.3
DT21-03 261.51 264.07 2.56 1.5 147 0.1 0.1 <0.1
and 443.20 445.10 1.90 38.2 952 5.03 4.2 0.3
incl. 444.74 445.10 0.36 111.5 2340 >203 4.9 0.5
and 514.45 515.49 1.04 3.0 22 0.8 1.4 <0.1
and 746.70 747.12 0.42 5.2 270 4.2 8.1 1.0
and 1043.98 1044.20 0.22 0.2 162 1.9 2.9 0.1

1 core length as cut; true thickness indeterminate
2 grams per tonne
3 includes single >20% pending overlimit

Phase 1 Results (in priority order, Table 1, Figure 1):

  1. Confirmed the presence of thick sections of favorable Redwall Limestone carbonate host rocks in all three holes along a 1.5 km transect.  Regionally the thick, clean limestones of the Redwall Limestone and its stratigraphic equivalents host significant replacement deposits (e.g. Leadville, CO), so it is hypothesized to be a more favorable host for laterally extensive mineralization than the thin, interbedded shales-sandstones-limestones of the Callville Formation, which hosts the historically deepest known mineralization in the Deer Trail Mine.  The Redwall does not crop out in the project area, nor was it intercepted in prior drilling campaigns, but regional geologic data indicated it should lie a few hundred metres below the mine.  As predicted, all three holes cut 215 m - 320 m of strongly recrystallized and locally skarn-altered Redwall Limestone beneath the Callville.  Notably, in contrast to the known mineralized upper portion of the Callville, which is characterized by thin limestones interbedded with thicker sandstones and shales, drilling shows the lower Callville contains an approximately 125 m thick zone dominated by clean limestones only ~230 m below the mine.  These should also be viable hosts for large-scale mineralization. The fact that the mineralization cut in DT21-02 lies in lowermost Callville limestone supports that inference.
  1. Traced the known feeder structures to depth towards those more favorable host rocks.  DT21-02 successfully cut the “Red Fissure” fault (the main feeder structure for the principal Deer Trail manto mineralization) approximately 740 m below the mine. This is still within the lower Callville, but only about 50 m above massive Redwall Limestone. DT21-03 cut bedding-parallel, manto-style mineralization that appears to lie very close to the projection of the Wet fault, a principal feeder to manto mineralization in the lower “3400 Area” of the mine.   The traces of the Red Fissure and Wet faults were projected 740 m and 950 m respectively below mine exposures, which strongly suggests these faults are continuous and fairly planar. Notably, a number of additional potential feeder structures, marked by thin mineralization, brecciation, very well developed “fugitive calcite” and skarn alteration, were cut in all three holes. Several of these intercepts (especially at 746 m and 1043 m depth in DT21-03 (Table 1)) may warrant follow-up drilling in Phase 2.
  1. Discovered mineralization related to those structures and host rocks at depth. DT21-02 and 03 both cut high-grade, multi-stage massive sulphide replacement mineralization in Callville limestones above the Redwall Limestone.  Notably, the silver grades in both holes are comparable to those of the historic Deer Trail massive sulfides, which suggests limited vertical zoning despite being up to 740 m deeper in the system. DT21-02 appears to have cut mineralization directly within the Red Fissure fault, while DT21-03 appears to be manto-style mineralization fed from the nearby Wet fault.  Phase 2 drilling is targeting these mineralized structures down dip within the clean carbonates of the Redwall.

High-Grade Sulphide Intercepts

DT21-02 cut 0.50 m (core length) of massive galena, sphalerite and pyrite, grading 426 g/t Silver, 6.5 g/t Gold, 17.1% Lead plus Zinc in Callville Formation limestones, approximately 50 m above the Redwall.  The mineralization occurs within a larger 3.5 m wide breccia zone that lies along the projection of the Red Fissure (host to the principal Deer Trail Manto mineralization).  The sulphides are clearly multi-phase, showing several stages of mineralization, disruption, and remineralization.  The Callville limestones around the mineralization are strongly marbleized with local skarn and skarnoid development.  The underlying Redwall Limestone is even more strongly marbleized, and skarn altered with alteration in all holes increasing with depth.  

DT21-03 cut 1.90 m (core length) of bedding-parallel, manto-style galena, sphalerite and pyrite mineralization grading 952 g/t Silver, 38.2 g/t Gold, and 9.2% Lead plus Zinc in the Callville Formation. This intercept is 125 m downdip from the 3400 Area, near the projection of the Wet fault, one of the feeders to the 3400 Area mineralization.  The sulphides are clearly multi-phase, showing several stages of mineralization, disruption and remineralization. The surrounding limestone is strongly marbleized with local skarn and skarnoid development.

Porphyry Related Mineralized Intercepts

All three holes bottomed in pervasively potassically-altered multi-phase granitoid porphyries. Limited cross-cutting, texturally destructive sericite-pyrite alteration, with associated copper mineralization, is localized along the contact with the immediately overlying Redwall Limestone.  The Redwall displays weak to moderate skarn development within broad zones (>100 m) of bleached white marble in all three holes. Sulphides associated with this alteration consist of disseminated pyrite and chalcopyrite in the contact zone and chalcopyrite veinlets in the intrusion along and within a few meters of the contact. The strongest mineralization was cut in DT20-01, which reported 0.86 m (core length) grading 1.65% Copper and 64 g/t Silver within skarn at the very top of the intrusion. The other two holes reported strongly anomalous copper along their contacts with the Redwall.  Mineralization and alteration in all three holes diminish rapidly below the limestone contact, which strongly suggests hydrothermal fluids from an unknown source followed the contact zone for some distance.

About Deer Trail

The silver-rich Deer Trail Carbonate Replacement Deposit (CRD) Project in Piute County, Utah encompasses the historic Deer Trail Mine and the adjoining Alunite Ridge area (approximately 5,700 Ha).  MAG has consolidated these properties for the first time since the early 1980s, allowing us to apply an integrated district-scale exploration approach based on the continuum of mineralization styles from CRD through Skarn to Porphyry Copper-Molybdenum shown by many related systems worldwide.  This model suggests that the high-grade silver, gold, lead, zinc and copper CRD sulphides of the Deer Trail Mine are linked by continuous mineralization to a Porphyry Copper-Molybdenum centre at some distance from the mine.  Initial work has focused on tracing the known high-grade CRD mineralization of the historic mine to depth into more favorable host rocks while surface work is tightening localization of the probable porphyry intrusive source for the system.  The Deer Trail Project is headed by Dr. Lex Lambeck an A.I.P.G. Certified Professional Geologist with over 15 years of relevant experience in CRD exploration.

Deer Trail Exploration

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