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MAG Silver reports positive drill results from Jaunicipio

Published: 18:27 15 Jun 2011 BST

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MAG Silver (TSE:MAG) (AMEX:MVG) announced Wednesday significant drill results from its joint venture Juanicipio property in Fresnillo, Mexico.

Fresnillo plc, which owns 56% of the property, completed 3,922 metres of drilling in the first quarter, with another 1,889 metres completed in April, alongside Mag, which owns the remaining stake.

Five holes, totaling 4,500 metres, were drilled in the Valdecañas vein in order to convert the property's inferred resources to an indicated status. Results were received for three of the holes to date, showing strong gold and silver grades.

Hole MI, which was previously reported, intercepted 7.19 metres of 1.07 grams per tonne (g/t) of gold, 434 g/t of silver and 5.09% combined lead and zinc. Hole RE, drilled on the far east end of the vein, intercepted 10.44 metres of 3.77 g/t gold, 1,258 g/t silver and 14.83% combined lead and zinc.

Meanhile, hole JO9 returned 5.13 metres at 1.28 g/t gold, 502 g/t silver and 3.54% combined lead and zinc. This particular hole also intercepted the footwall vein, reporting 1.2 metres at 2.77 g/t gold, 269 g/t silver and 0.01% combined lead and zinc.

At the company's Cinco de Mayo property, which incurred $1.8 million in exploration and evaluation costs during the first quarter, drilling also progressed. Highlights included 2.81 metres at 483 g/t silver, 0.22 g/t gold, 4.52% lead and 11.74% zinc in hole CM11-343.

The principal vein in CM11-343 is also seen in hole CM11-335, 50 metres away, which returned 1.42 metres at 287 g/t silver, 0.24 g/t gold, 2.67% lead and 1.4% zinc, including 0.57 metres at 639 g/t silver, 0.35 g/t gold, 5.42% lead and 2.35% zinc.

These holes the Cinco de Mayo property are the first to hit a significant intrusive mineralization, the company said. As such, the Vancouver, B.C.-based company plans to focus its 2011 exploration efforts in this area.

The Mexico-focused silver and gold mining company also posted its first quarter financial results today for the first three months of the year, narrowing its net loss to $1.4 million, or $0.03 loss per share, compared to the year-ago period's loss of 42.2 million, or $0.04 loss per share. None of its ten projects are yet producing revenue.

Still, MAG's shares rose 2.08% to $9.32 per share on the TSX as of Wednesday noon. At quarter-end, the company had $35.5 million of cash on hand.

In other news, MAG Silver announced the International Chamber of Commerce (ICC) upheld  that its partner in the Juanicipio property, Fresnillo, breached the standstill provision in the shareholders agreement, at arbitration proceedings in Mexico. In an early May ruling, the ICC awarded MAG $1.86 million in damages, which it received from Fresnillo.

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