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Message: Reports Restated Valdecanas Mineral Resource to Correct Estimation Error
| March 4, 2009 | ||
| MAG Silver Reports Restated Valdecanas Mineral Resource to Correct Estimation Error | ||
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VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 4, 2009) - MAG Silver Corp. (TSX:MAG)(NYSE Alternext US:MVG) ("MAG") announced today that it has been advised by Scott Wilson Roscoe Postle Associates Inc. ("Scott Wilson RPA") that an error was discovered in the resource estimate that Scott Wilson RPA prepared for the Valdecanas Vein at the Juanicipio project in Zacatecas State, Mexico (the "2009 Independent Resource Estimate"). The 2009 Independent Resource Estimate was released by MAG on February 24, 2009 in response to the unexpected release by Fresnillo plc of key elements of its own resource estimate (the "2009 Fresnillo Resource Estimate") in a presentation delivered at the 2009 BMO Global Metals and Mining Conference in Florida. MAG understands that the error occurred when Scott Wilson RPA inadvertently transposed data columns in the database. As a result of the error, the tonnes and grade provided in the 2009 Independent Resource Estimate were overestimated. William Roscoe, the President of Scott Wilson RPA commented: "We take full responsibility for the error. We regret that it occurred and sincerely apologize for any confusion that our error may have caused." MAG notes that, although the two estimates are closer as a result of the restatement, significant discrepancies continue to exist between the estimates prepared by Scott Wilson RPA and Fresnillo, particularly for the Indicated portion of the resource. It is important for MAG shareholders not to lose sight of the fact that the Valdecanas Vein is one of the highest quality silver deposits in the world. Even following the restatement, the average grade of 879 grams silver per tonne for the Indicated Resource makes this one of the highest grade undeveloped silver projects in the world. The revised grade is still 12% higher than the grade outlined in the Indicated Resource in the 2009 Fresnillo Resource Estimate. The drilling program following the previous resource estimate consisted primarily of infill drilling on the Valdecanas Vein. The Juanicipio property also has considerable exploration upside, notably the Juanicipio Vein and Encino Vein, which are being tested as part of the extensive 2009 drilling program. MAG President and CEO, Dan MacInnis commented: "We are obviously very disappointed that this error occurred. Scott Wilson RPA has assured MAG that the error has now been corrected and the revised estimate validated." Highlights of the Restated 2009 Independent Resource Estimate The restated Valdecanas Vein resource estimate (the "Restated 2009 Independent Resource Estimate") continues to confirm Valdecanas as a world class deposit, with the first Indicated Resource for the Valdecanas Vein (including the Hanging Wall Vein) of 2.95 million tonnes of 879 grams per tonne (g/t) silver, 2.22 g/t gold, 2.39% lead and 4.15% zinc. The Inferred Resource (Valdecanas, Footwall and Hanging Wall Veins and the Stockwork Zone) has been revised to 7.21 million tonnes of 458 grams g/t silver, 1.54 g/t gold, 1.89% lead and 3.14% zinc. The total contained metals in the Indicated Resource are 83 million ounces of silver, 210,000 ounces of gold and 155 million pounds of lead and 269 million pounds of zinc. The Inferred Resources contain an additional 106 million ounces of silver, 356,000 ounces of gold and 301 million pounds of lead and 498 million pounds of zinc. Restated 2009 Independent Resource Estimate Detail The following table presents the Restated 2009 Independent Resource Estimate for the Valdecanas, Footwall, and Hanging Wall Veins and the Stockwork Zone after correcting the error discovered in the 2009 Independent Resource Estimate: Juanicipio Joint Venture (100%)
(44% MAG Silver / 56% Fresnillo plc)
Restated Mineral Resource Estimate to February 23, 2009
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Contained Metal
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Resource NSR Ag Au Pb Zn
Category Tonnes Ag Au US$/ M K M M
and Zone millions g/t g/t Pb % Zn % tonne oz oz lbs lbs
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Indicated
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Valdecanas Vein 2.54 900 2.10 2.56 4.42 368 73 171 144 247
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Hanging Wall Vein 0.41 750 2.94 1.29 2.46 317 10 38 12 22
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Total Indicated 2.95 879 2.22 2.39 4.15 361 83 210 155 269
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Inferred
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Valdecanas Vein 5.81 523 1.56 2.19 3.61 228 98 292 281 463
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Footwall Vein 0.48 339 1.43 0.60 0.64 142 5 22 6 7
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Hanging Wall Vein 0.11 549 0.43 0.64 1.48 199 2 2 2 4
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Stockwork Zone 0.80 45 1.57 0.67 1.39 52 1 41 12 25
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Total Inferred 7.21 458 1.54 1.89 3.14 202 106 356 301 498
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Footnotes for Juanicipio Joint Venture resource table.
1. CIM Definition Standards have been followed for classification of
mineral resources.
2. Mineral resource blocks are within wireframes constructed with a minimum
true thickness of 1.5 metres and a minimum NSR value of US$50 per tonne,
which is the effective cut-off. All blocks within the wireframes are
reported as mineral resource. Approximately 2% of the indicated tonnes
and 6% of the inferred tonnes have values less than US$50 per tonnes but
are included for continuity. Much of the Stockwork Zone has NSR values
less than US$50 per tonne, but it is included as mineral resource
because it represents incremental tonnage adjacent to the Valdecanas and
Footwall Veins.
3. NSR values are calculated in US$ using factors of $0.33 per g/t Ag,
$17.04 per g/t Au, $4.01 per % Pb and $5.57 per % Zn. These factors are
based on metal prices of US$12.50/oz Ag, US$800/oz Au, $0.45/lb Pb and
$0.70/lb Zn and estimated recoveries and smelter terms.
4. The mineral resource estimate uses drill hole data available as of
January 29, 2009.
5. Mineral resources are not mineral reserves and do not have demonstrated
economic viability. All figures are rounded to reflect the relative
accuracy of the estimates; as a result column totals may not add.
MAG Discussion of the Discrepancy between the Restated 2009 Independent Resource Estimate and the 2009 Fresnillo Resource Estimate There is still a significant discrepancy between the Restated 2009 Independent Resource Estimate and the 2009 Fresnillo Resource Estimate which MAG is unable to reconcile without information that Fresnillo has refused or neglected to provide to MAG. Certain of these details are set out below with reference to the initial 2008 Resource Estimate as well as the initial 2009 Independent Resource Estimate: Comparison Table(i)
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2009
2008 2009 Independent Fresnillo
Resource Resource Estimate Resource
Estimate Original Restated Estimate
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Indicated
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Total Indicated Tonnes millions - 3.88 2.95 2.14
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Average Ag g/t - 972 879 783
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Total Contained Silver M oz - 121 83 53.9
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Inferred
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Total Inferred Tonnes millions 7.3 8.24 7.21 6.63
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Average Ag g/t 1,011 549 458 601
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Total Contained Silver M oz 237.8 145 106 128.1
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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 disclosed in MAG's February 24, 2009 press release, the
Restated 2009 Independent Resource Estimate 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
BMO 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.
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