http://www.theaureport.com/pub/na/18...

BC: Oh, yes. One I like a lot is MAG Silver Corp. (TSX:MAG) (NYSE:MVG). They’ve made a major discovery in Mexico adjacent to the world’s richest silver deposit, Fresnillo. It was owned by Peñoles, and spun it out into a public company, Fresnillo LLC, which is now MAG Silver’s joint venture partner. The asset is probably the highest-grade silver discovery in decades. It averages over a kilo a ton, it has some 240 million ounces of silver, and it’s open to further discoveries. Plus there’s gold and base metals.

I figure that MAG Silver’s 44% is worth on the order of $15 a share to MAG Silver if silver is $10. MAG Silver is selling for about $5 a share. Fresnillo has been creeping up their holdings of MAG Silver; they own about 19% now; and MAG Silver’s 44% is worth a lot more than $5 to Fresnillo. So I see that as a takeover scenario coming at some price appreciably in excess of $5. That’s one instance of a high-grade deposit that a major is definitely coveting.

TGR: Is there a 43-101 on this deposit?

BC: It was put out in December. It comes in at about 240 million ounces of silver grading a bit over one kilogram per ton silver, about 2.2 grams per ton gold, plus base metals. MAG has 44% of that. Once you take out recovery and dilution, it’s about $350 a ton rock in the ground. It’s going to cost on the order of $60 a ton to mine and mill it, so there’s a lot of money to be made there. It’s adjacent to Fresnillo’s operating mine, they’ve got plans to go in and bring this into production. Everything’s set up. No political issues, no technical issues.

TGR: It seems a little bit too easy.

BC: It does. Those deals are few and far between, but you don’t need many of those.