The 2009 Fresnillo Resource Estimate

On February 5, 2009, Fresnillo provided MAG with a preliminary resource estimate prepared internally by Fresnillo personnel. Fresnillo engaged SRK Consulting to audit this internal resource estimate on behalf of the Juanicipio Joint Venture. On February 19, 2009, MAG received an Audited Mineral Resource Statement by SRK (the "2009 Fresnillo Resource Estimate") which corresponds to the internal resource estimate prepared by Fresnillo personnel and modifies the resource classification to comply with the JORC Code. On February 24, 2009, Fresnillo released key elements of the 2009 Fresnillo Resource Estimate in a presentation delivered at the 2009 Global Metals and Mining Conference in Hollywood, Florida.

Compared to the previous Juanicipio Joint Venture resource estimate prepared by Fresnillo and audited by SRK (the "2008 Fresnillo Resource Estimate", see MAG press release of June 18, 2008), the tonnage of the 2009 Fresnillo Resource Estimate is somewhat higher but the silver grade is significantly lower resulting in the contained silver ounces being significantly lower than Fresnillo's previous estimate. There are also some significant differences between the 2009 Fresnillo Resource Estimate and the 2009 Independent Resource Estimate by Scott Wilson RPA as described below. MAG has not yet been provided with the detailed data necessary to resolve these discrepancies.

MAG Discussion of the Discrepancy between 2009 Independent Resource Estimate and 2009 Fresnillo Resource Estimate

MAG CEO, Dan MacInnis commented: "The timing of the Fresnillo release is highly relevant given Fresnillo's December 1, 2008 announcement that it intends to make a "take-under" offer to acquire all of the outstanding shares of MAG it does not already own at a price of US$4.54 per share. This offer price represented a 4.4% discount to the closing price of the MAG shares on the day before the take-under offer was announced and currently represents a discount of 20% to the closing price of MAG's shares on the NYSE Alternext on the last trading day prior to this press release."

There is a significant discrepancy between the 2009 Independent Resource Estimate and the 2009 Fresnillo Resource Estimate, particularly in the total tonnage, silver grade and the contained ounces of silver in the Indicated Resource category and a significant difference in the Inferred Resource category. Certain of these details are set out below with reference to the initial 2008 Inferred Resource:

 

Comparison Table(i)
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                                                            2009        2009
                                              2008   Independent   Fresnillo
                                          Resource      Resource    Resource
                                        Estimation      Estimate    Estimate
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Indicated
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Total Indicated Tonnes millions       -          3.88        2.14
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Total Ag g/t                                     -           972         783
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Total Contained Metal Ag M oz        -           121        53.9
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Inferred
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Total Inferred Tonnes millions        7.3          8.24        6.63
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Total Ag g/t                                 1,011           549         601
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Total Contained Metal Ag M oz   237.8           145       128.1
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(i) Table prepared by MAG using inputs from 2008 Resource Estimate as
    disclosed in MAG's June 18, 2008 press release, the 2009 Independent
    Resource Estimate as disclosed in this press release and the 2009
    Fresnillo Resource Estimate based on resource estimate numbers disclosed
    by Fresnillo on February 24, 2009 in a presentation at the 2009 Global
    Metals and Mining Conference in Hollywood, Florida, adjusted to separate
    Indicated and Inferred Resources and to represent a 100% interest as set
    out in the 2009 Fresnillo Resource Estimate.

The 2009 Fresnillo Resource Estimate is particularly perplexing and troubling in light of the following key factors:

- the 2009 Fresnillo Resource Estimate numbers cannot be reconciled to the 2009 Independent Resource Estimate or even to Fresnillo's own work from only eight months ago.

- MAG was not afforded any opportunity to comment on, or provide input relating to, the preparation of the 2009 Fresnillo Resource Estimate by Fresnillo personnel. MAG was also provided with the SRK audit statement only two business days before Fresnillo's disclosure date. As a result of the delay and Fresnillo's continued efforts to limit the information available to MAG, MAG and its technical advisors were never given the opportunity to reconcile the two different resource estimations prior to their disclosure.

- Fresnillo has continued to make it difficult for MAG to get access to key joint venture information. Fresnillo's actions are part of a continued pattern of behaviour that gave rise to MAG's inability to properly complete an independent valuation of MAG's securities.

- MAG is deeply concerned that Fresnillo's actions appear to be another tactic in Fresnillo's strategy to acquire control of MAG at a "lowball" price that does not reflect the true value of MAG's world class assets.

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