Juanicipio JV outlines significant silver resource

Vancouver – Mag Silver (MAG-V, MVG-X) has finally moved the high-grade Valdecanas vein from discovery to a resource estimate.

The company started drilling the Juanicipio property in Zacatecas state, Mexico, in 2003 after noticing mineralization markers on surface in the late 1990s. In 2005 Mag hit the Valecanas vein and attracted Industrias Penoles (IPOAF-O, PENOLES-M), owner-operator of the nearby Fresnillo silver mine, which started earning in a 56% interest.

Drilling was halted for eight months in 2006 while the joint venture partners negotiated a US$1.4 million deal for the project’s surface rights, but since then has continued apace. Now a resource estimate for the low-sulphidation vein that strikes for over 1 km has validated the time and effort.

The vein hosts 7.3 million tonnes grading 2.06 grams gold per tonne, 1,011 grams silver per tonne, 2.31% lead, and 3.94% zinc. The silver count is 237.8 million contained oz.

The day after news of the resource estimate Mag released results from two new holes. Importantly, hole QE is the first to intersect the Valdecanas vein in the east-central area. QE intersected 1,198 grams silver, 0.24 gram gold, 2.75% lead, and 5.15% zinc over 4.7 metres true width. The result begins to fill a 500-metre gap between drill intercepts in the central portion of the eastern half of the vein. It also increases the length of the high-grade Bonanza zone to almost 400 metres.

The other hole, QD, cut 0.7 metres grading 200 grams silver, 0.58 gram gold, 0.03% lead, and 0.01% zinc. The drill deviated dramatically and intersected the vein almost 250 metres west and 80 metres higher than its target, resulting in an intersection near or past the top of the Bonanza zone.

Valdecanas is not the only vein on the property. In late 2007 Minera Juanicipio the jointly-owned company operating Juanicipio purchased land covering the 2.5-km strike projection of the Juanicipio vein, a separate, parallel structure located 1 km south of Valdecanas.

Two recent drill results from the Juanicipio vein show short, high-grade intercepts. Hole 18P intersected 4,100 grams silver, 1.47 grams gold, 2.02% lead, and 4.07% zinc over 0.6 metres and hole 17P cut 0.6 metres grading 130 grams silver, 0.34 gram gold, 0.06% lead, and 0.08% zinc.

Juanicipio is just 5 km west of the principal production headframe of the Fresnillo mine and 1.5 km west of the Saucito vein, currently undergoing preproduction development involving a 600-metre shaft and a 2,200-metre decline.

Drilling continues at Juanicipio, with four drills currently turning. The company plans to complete 25,000 metres of drilling in 2008.

Mag is also busy outside of Juanicipio. At its 100%-owned Cinco de Mayo property in northern Chihuahua state a drill program is expanding the Jose manto discovered in February when hole 20 returned 6.8 metres of galena and sphalerite-rich massive sulphides grading 254 grams silver, 6.4% lead, and 7% zinc.

Six new holes have probed the manto over an area 250 by 250 metres. Hole 28 hit 4 metres grading 192 grams silver, 4.22% lead, and 11.65% zinc; hole 22 returned 209 grams silver, 6.15% lead, and 6.55% zinc over 2.8 metres. Mineralization remains open in all directions and two drill rigs are currently drilling the area systematically.

All intercepts occur at 350 to 550 metres vertical depth and appear to define a coherent massive sulphide sheet developed within a low-angle fault cutting strongly folded limestone.

Mag president and CEO Dan MacInnes says exploration efforts are hampered by a complete lack of outcrop but work is uncovering alteration zoning, mineralization textures, and continuity similar to large-scale carbonate replacement deposit (CRD) systems nearby, along Mexico’s CRD belt.

The Jose manto mineralization lies along a very strong northwest-trending magnetic anomaly that runs over 3 km. Discovery hole 20 is at one end of the anomaly; numerous targets remain to be drilled along the trend to the northwest.

Over at the Batopilas silver district, hole 21 has encountered a broad zone of silver-lead-zinc mineralization south of the Animas area, which was the focus of last year’s drill campaign. The zone starts 9 metres below surface and grades 20.5 grams silver, 0.66% lead, and 0.84% zinc over 61.2 metres. The intercept is hosted in sedimentary rocks lying above a quartz-monzonite dike and includes three well-mineralized intercept, such as 3.8 metres of 90.4 grams silver, 2.65% lead, and 3.03% zinc.

At Batopilas, silver is associated with calcite veining. The district produced almost 300 million oz. silver until the Mexican Revolution in 1912 disrupted production, a jolt from which the district never recovered. Mag controls over 90% of the district, marking the first time the district’s 70 historic silver mines have been consolidated under one owner. Mag’s exploration program is the first in over 93 years.