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    silver investing

    Drill Tracker Weekly: MAG Silver Intersects Widest Interval of High-grade Silver to Date at Valdecanas

    Wayne Hewgill
    Apr. 29, 2015 12:40PM PST
    Precious Metals

    The Mag Silver/Fresnillo joint venture announced the extension of the Valdecanas vein to depth with the widest mineralized interval to date on the project. The vein is immediately adjacent to and continuous with the vein system on Fresnillo’s operating mines to the east.

    Drill Tracker Weekly is not exclusive to Resource Investing News and is published with permission from Mackie Research Capital Corporation. It highlights drilling results in context with our database of over 10,000 drilling and trenching results. The purpose of this report is to highlight drilling and trenching results that stand out from the pack and compare them to their peer group. This report does not constitute initiation of coverage or a recommendation.

    MAG Silver (TSX:MAG,NYSEMLT:MVG)

    Price: $7.68

    Market cap: $529 million

    Cash estimate: $86 million

    Project: Valdecanas

    Country: Mexico

    Ownership: 44 percent

    Resources: 8.3 MT @ 601 g/t Ag, 1.7 g/t Au, 2.0% Pb, 3.7% Zn (May 2014) indicated

    Project status: Pre-production — exploration to depth

    •  The Mag Silver / Fresnillo joint venture announced the extension of the Valdecanas vein to depth with the widest mineralized interval to date on the project. The vein in the north east corner of the Juanicipio property which is a 44% Mag – 66% Fresnillo joint venture. The vein is immediately adjacent to and continuous with the vein system on Fresnillo’s operating mines to the east.
    • Highlights from the drilling include 34.45 metres (26.45 metres true width) grading 2.65 g/t Au, 405 g/t Ag, 3.22% Pb, 4.09% Zn and 0.37% Cu. The interval is the widest interval to date and extends the Valdecanas West vein 100 metres to depth. It is also significant to note the first presence of copper in the vein system. The Company believes that along with the presence of skarn style alteration that this may indicate proximity to an ore-fluid upwelling zone presenting a new exploration target.
    • The June 2012, Preliminary Economic Assessment (PEA) estimates an after-tax NPV (5%) of $1.23 billion and an IRR of 43%. The payback on the $302 million initial capital is expected to be 3.5 years. The PEA is based on life of mine production of 13.3 million tonnes of indicated and inferred resources averaging 416 g/t Ag, 1.3 g/t Au, 1.4% Pb, 2.7% Zn. The PEA based on 2012 projected prices of $23.39 per ounce Ag, $1,257 per ounce Au, $0.95 per pound Pb and $0.91 per pound zinc. Using $1,075 Au and $20.0 Ag gives and estimated after-tax NPV (5%) of $976 billion and 37% IRR.
    • The joint venture is currently progressing with the access decline and stope development expected to start in 2017.

    Discovery history (Valdecanas vein — January 2006): 6.35 metres @ 2.91 g/t Au, 1,798 g/t Ag, 3.43% Pb, 5.51% Zn

    Current holes: 26.45 metres (true width) @ 2.65 g/t Au, 405 g/t Ag, 3.22% Pb, 4.09% Zn, 0.37% Cu; 32.09 metres (true width) @ 0.80 g/t Au, 137 g/t Ag, 1.5% Pb, 6.5% Zn, 0.382% Cu

     

    Risks Analysis

    Data contained in DRILL TRACKER WEEKLY is based on early stage exploration activity. The results are obtained at the very early stages of exploration and therefore, individual results may not be reproducible with additional trenching or drilling, nor may the results ultimately lead to the discovery of an economic deposit. Delineation of a resource body requires an extensive data gathering exercise according to guidelines set out in National Instrument 43-101 before investors can be reliably assured of a competent body of mineralization that may be of economic interest. DRILL TRACKER WEEKLY is designed to highlight individual trench or drill results, which stand out as being materially anomalous and are particularly worth of note – a type of early warning flag for a particular property that warrants further attention. Hence, DRILL TRACKER WEEKLY does not provide a recommendation to buy, sell or hold a specific equity – it is an information reference source to help quantify the meaning and relevance of early stage exploration results. 

    Relevant Disclosures Applicable to: Drill Tracker Weekly 

    1. The research analyst or a member of the analyst’s household owns and/or has options to acquire shares of the subject issuer. At the date of this release, Wayne Hewgill, owns no shares in any companies in this report. 

    Analyst Certification

    I, Wayne Hewgill certify that the information in this report is sourced through public documents that are believed to be reliable but accuracy and completeness as represented in this report cannot be guaranteed. The author has not received payment from any of the companies covered in this report. This report makes no recommendations to buy, sell or hold. Each analyst of Mackie Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.

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