Mag Silver and Penoles discover high-grade veins

Vancouver – Industrias Penoles has discovered another high-grade vein at the Juanicipio project, a joint venture with partner Mag Silver (MAG-V) in the Fresnillo district of Zacatecas State, Mexico.

The second of two holes drilled on the vein returned a 6.35-metre intersection grading 1,798 grams silver and 2.91 grams gold per tonne, 3.43% lead, and 5.51% zinc, which includes 2.91 metres of 2,807 grams silver, 3.27 grams gold, 5.94% lead and 9.14% zinc.

Drilling also revealed a gold zone that returned 1.8 metres averaging 9.24 grams gold, 1,222 grams silver, 2.16% lead and 3.15% zinc.

The first hole to intersect the vein returned 8.65 metres of 116 grams silver and 0.26 gram gold, plus a separate 1.05-metre intercept of 477 grams silver. The new vein was intersected about 1,000 metres north of the Juanicipio vein, the initial vein discovery made by the partners last fall.

Mag Silver notes that the mineralized intercepts appear to be similar visually and mineralogically to the Santo Nino vein, one of the main production veins at the nearby Fresnillo mine. In addition to similar geology, the properties share structural, geochemical and geophysical similarities.

Juanicipio is situated 5 km west of the main production headframe at Fresnillo, and about 2.3 km from its westernmost underground workings. Fresnillo produces more than 34 million oz. silver per year from a series of high-grade epithermal veins.

Mag Silver optioned the Juanicipio project last year based on the theory that veins being exploited at Fresnillo continued under alluvial cover onto its property. Penoles operates Fresnillo and had traced veins in several areas to within a few hundred metres of the western border of the Juanicipio property.

Penoles can earn a 56% interest in the Juanicipio property from Mag Silver by spending US$5 million on exploration in stages over a 4-year period. Penoles also acquired shares of Mag Silver valued at US$500,000, and holds an option to acquire a similar amount at market prices in the second year of the joint venture.