Mag Silver rises on Juanicipio project

Vancouver — Mag Silver (MAG-V, MSLRF-O) and partner Industrias Peoles (IPOAF-O) are outlining significant silver veins in their Juanicipio joint venture in Zacatecas state, Mexico, with the latest results extending the strike length of the main Valdecanas vein to 1,000 metres.

A series of strong drill results over the last eight months have gradually pushed Mag’s share price up almost 300%, to around $10.35. In October, Mag released results from the site’s first drill hole, 06-17. The core from the Valdecanas vein proper graded 1,347 grams silver per tonne and 0.5 gram gold over 8 metres, starting 625 metres down-hole. The drill also hit a second vein, named the Valdecanas footwall vein, at 687 metres depth and returned 5.1 metres grading 683 grams silver and 0.41 gram gold.

In December, the company came out with results from four further drill holes. Hole 06-MB cut 1.6 metres of the Valdecanas vein grading 2,210 grams silver and 6.96 grams gold, and hole 06-ME intersected 1,893 grams silver and 4.46 grams gold over 7.7 metres (7 metres estimated true width), also in the main vein.

One month later, two more core assay results were released. Hole 06-KD, designed to hit the Valdecanas vein 200 metres along strike to the west of Section M, intersected 11.9 metres grading 2,279 grams silver and 2.66 grams gold, the widest and highest-grade vein intersect to date.

And in late May and early June, Mag announced results from another three holes that together outlined a strike length of 1,000 metres on the Valdecanas vein. Hole SD returned 4.3 metres (4 metres true width) grading 271 grams silver and 2.78 grams gold, as well as a deeper gold-rich zone grading 5.64 grams gold and 121 grams silver over 1.4 metres. And hole MG, targeted to define the bottom of the high-grade zone on Section M, cut 5.4 metres of 192 grams silver and 2.29 grams gold and defined a 500-metre minimum dip length for the vein.

The Juanicipio project lies 5 km away from Fresnillo, the world’s largest primary silver mine, owned by Peoles. Mag owns the Juanicipio site and in mid-2005 entered into an agreement whereby Peoles can earn a 56% interest in the project upon completion of a US$5-million exploration program within four years.

Peoles has three drills working on the site and plans to commit two more rigs before the end of the month. The current 28,000-metre drill program is aimed at delineating the whole of the Valdecanas vein. Drilling to date has left the vein open to the east and west, as well as downdip. The vein is the westernmost known mineral occurrence in the Zacatecas district.

Mag has two other projects in western Mexico’s Sierra Madre Occidental region. In January 2006, the company announced a high-grade silver discovery in its wholly owned Batopilas project, in Chihuahua state. One drill core in the Don Juan vein cut 1.7 metres of 2,358 grams silver. In northern Mexico, Mag holds its Cinco de Mayo project, which is a carbonate replacement deposit exploration project.