Cinco de Mayo

CINCO DE MAYO PROPERTY
MUNICIPIO VILLA AHUMADA CHIHUAHUA, MEXICO

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MAG SILVER EXPANDS HIGH-GRADE MOLYBDENUM AND ADDS SIGNIFICANT GOLD AT CINCO DE MAYO

The Cinco de Mayo property comprises 22,000 hectares located approximately 190 kilometres north of the city of Chihuahua, in northern Chihuahua Sate, Mexico. Cinco de Mayo is the most advanced of MAG's five Carbonate Replacement Deposit ("CRD") style targets.

In late 2009 the Company announced the discovery of a new zone of high grade molybdenum and gold mineralization named "Pozo Seco" in the western part of the project area. Although still at an early stage of understanding it is evident that Pozo Seco is developing substantial size and grade potential. Drilling to date clearly demonstrates grade, width and continuity within the Pozo Seco Prime discovery zone with contiguous holes outlining a very significant tabular body roughly measuring 1,800 metres long, averaging 250 metres wide and 55 metres thick. Successful, large, step outs through alluvial cover indicate that this body remains open in several directions.

The significance of this discovery, called the Pozo Seco Moly (gold) Zone, is two-fold: 1) the very high-grade moly (three times the average grade of most moly producers) encountered over bulk mineable widths just below surface suggests the possibility of a standalone moly operation; 2) perhaps more important is that the presence of high-grade molybdenum may indicate proximity to the intrusive centre of Cinco's silver-lead-zinc mineralization. A proximal moly zone characterizes the San Martin-Sabinas District in Zacatecas, the largest skarn-replacement deposit known in Mexico.

To date, the Company has drilled a cumulative over 115,000 metres on the property, in more than 240 holes, and outlined high grade silver/lead/zinc mineralization along approximately 2,000 metres of strike length of the Jose Manto, as well as the new moly-gold zone.

In January 2010 the company announced additional gold and molybdenum assay results from on-going drilling of the Pozo Seco Moly-Gold zone. The best of the new holes in the Molybdenum-Gold ("Moly-Gold") zone was Hole 144 which reports 0.16% molybdenum ("Moly") with 0.27 grams per tonne (g/t) gold over 43.97 metres (30.38 to 74.35 metre depth). In addition holes 141 and 142 were drilled east of the Lucia Fault and also returned strong molybdenum and gold results. These combined holes demonstrate that the Moly-Gold zone continues to the northwest and remains open towards recently acquired ground. Holes 143, 145, and 152 were drilled southwest of the Lucia Fault and returned no significant values. Hole 148 was drilled east of the eastern bounding fault to the Moly-Gold zone. This new drilling has now identified a zone approximately 1,100 metres long by almost 350 metres wide averaging almost 50 metres in thickness and it remains open to the northwest.

Recent drilling has also discovered an emerging gold dominant zone adjacent to the Pozo Seco Molybdenum-Gold zone discovery. Hole CM09-150 was the best of these new gold-dominant holes, returning 27.50 g/t gold in a 0.30 metre zone lying at surface and containing abundant visible gold within an overall 4.41 metres (4.95 to 9.36 metre depth) grading 1.99 g/t gold. Hole 150 and adjoining Holes 153 and 123 (see press release of November 10, 2009) show only trace molybdenum in contrast to neighbouring holes on the northeast side of the major northwest-trending Lucia Fault, which appears to be the controlling factor for the strong molybdenum mineralization.

Gold mineralization appears to overprint the molybdenum zone along a perpendicular northeast-trending fault zone that continues to the southwest where a recent geochemical grid sampling at Pozo Seco South has revealed a 1 kilometre diameter area with highly anomalous gold, silver, copper, zinc, lead, arsenic, antimony and mercury values. This significant surface discovery represents a proximal metals signature and the area is coincident with a significant "hot spot" in the magnetic high anomaly that underlies the entire Pozo Seco area.

In March 2010, the company announced gold and molybdenum ("moly") assay results from drilling (12 reverse circulation holes and 21 diamond drill holes) of the Pozo Seco moly-gold zone. The best results were Hole CM10-182 reports 116.87 metres grading 0.098% moly with 0.25 grams per tonne (g/t) gold (39.42 to 156.29 metre depth) and Hole CM10-175 is the best in-fill hole, lying 100 southeast metres of CM09-139. It reports 0.326% moly with 0.65 g/t gold over 53.94 metres (31.40 to 85.34 metres depth). These results extend consistent moly-gold mineralization a further 600 metres to the northwest with 17 in-fill drill holes confirming mineralization continuity and earlier high-grade moly-gold results. These drill results substantiate a minimum strike length of 1,700 metres and a 250-350 metre width, and 50 metre average thickness, to the Pozo Seco discovery zone, with mineralization remaining open along the controlling Lucia Fault system as step-out holes up to another 1,200 metres farther northwest report significant moly and gold values.

In April 2010 the company announced that starting at 2 metres depth, Hole CM10-221 has cut the thickest molybdenum intercept to date on the property: 278.42 metres (913.45 feet) of 0.052% molybdenum (Mo) with 0.10 grams per ton (g/t) gold; including several high-grade zones such as 34.06 metres (111.7 feet) (115.29 to 149.35 metres depth) grading 0.158% moly with 0.21 g/t gold. Four additional holes in this area (CM10-144, 182, 208 and 211) indicate that mineralization in this "Northwest Prime" zone is thickening, extending deeper and moving farther west than previously thought. This may indicate that a major mineralizing fluid zone has been encountered. Drilling in this area has been stepped up to explore for the root of the system.

In June 2010, seven additional holes were completed near Hole CM10-221 in an attempt to follow the thick molybdenum mineralization at "Pozo Seco Deep". Hole CM10-230 cut 164.86 metres (532.50 feet) of 0.052% molybdenum (Mo) with 0.19 grams per ton (g/t) gold. This fault zone may be part of the controlling structure to the regional mineralization pattern and may lead back to the lead-zinc-silver rich source for the observed moly mineralization.

Seven additional holes have been completed in the 100 metre grid drilling pattern in the Pozo Seco Prime Zone. The results are consistent with those from neighbouring holes in terms of thickness and grade. The best of these recent holes is CM10-228, which cut 94.03 metres (0 to 94.03 metre depth) grading 0.1% Mo and 0.15 g/t gold, with the first 24.84 metres from surface running 0.21% Mo and 0.32 g/t gold.

Carbonate Replacement Deposits (CRDs): Renewed exploration focus

Carbonate Replacement Deposits (CRDs) represent approximately 40% of Mexico's 10-billion ounce historic silver production. They are characterized by massive to semi-massive silver-lead-zinc sulphide intrusions; these metal-rich intrusions replace the carbonate host rocks (limestone). CRDs occur along major regional structures, and Cinco de Mayo lies along the same NW-trending regional structure that hosts several of the largest CRDs in Mexico.

Cinco de Mayo is one of three (3) 100%-owned CRD properties MAG Silver is exploring. Though they've been mined in Mexico for more than 400 years, CRDs are now receiving renewed attention. Today's higher base and precious metal prices are one important factor. Additionally, the application of modern geoscience makes detection of sulphide systems at depth more possible than in the past.

Other attractive characteristics of CRDs include: potential for large tonnage and high grades; potential for substantial base metal credits to the precious metal resource; and, sulphide replacement in carbonates (limestone) mitigates oxidation, and is therefore more metallurgically amenable and environmentally benign.

Background: Cinco de Mayo, a regional story

At Cinco de Mayo the regional story is very strong: the project lies on the western bounding fault of the Chihuahua Trough, the same structure that hosts major CRDs like Santa Eulalia (MAG's Guigui property), Naica, San Pedro Corralitos and Terrazas. This gives rise to a thick carbonate section to host mineralization and a major regional zone of weakness for both ground preparation and intrusive emplacement.

This ancient crustal break first controlled deposition of a thick section of carbonate host rocks, later movements created abundant structural fluid pathways, and finally it guided metals-rich magmas into place for optimal mineral deposition.

At Cinco de Mayo there are numerous mineralization and alteration occurrences associated with this fault. These include old mines on the Cinco Chimney and Cinco Manto at opposite ends of the Cinco de Mayo Ridge, Abundancia, Celia and Orientales, all of which lie within MAG's property package. Further, Cinco de Mayo Ridge is cut by numerous ferruginous jasperoid veins that carry strongly anomalous lead-zinc-copper-silver and gold values. Despite the extensive cover, the nature and degree of mineralization and alteration in Cinco de Mayo Ridge strongly indicated that a significant CRD system may lay hidden nearby under the cover.

2006: Concept to discovery

The Cinco de Mayo discovery in 2006 was particularly significant, achieved as it was by "blind" drilling. The property is 75% covered with alluvium, with virtually no outcrop to guide exploration. All of the mineralization intersected to date was initially identified as buried (blind) geophysical and geochemical anomalies consistent with our exploration model.

Prior to drilling, in order to "see" below the alluvial cover, MAG conducted extensive geological, geochemical, biogeochemical and geophysical studies. From interpretation of this data MAG developed a series of drill targets along a very prominent NW trending fault zone that cuts strongly folded massive limestone and limestone-rich sedimentary rocks. Nine holes totaling 3,975 metres were drilled in an area roughly 1.5 kilometres wide and over 2 kilometres long, with six of the holes returning replacement-style massive to semi-massive sulphide mineralization.

MAG's discovery in 2007 affirmed our conceptual model that continues to be refined and to inform our efforts in the exploration here and at our other CRD properties.

Cinco de Mayo: Outlook

Drilling is continuing with 4 machines: (2 dedicated to tracing the Rancho Zone veins towards their source, 1 focused on testing geophysical anomalies coincident with the Pozo Seco Zone, and 1 seeking the large-scale replacement and skarn mineralization typical of the deposits in the trend hosting Cinco de Mayo). Moly is a typical (and proximal) component of CRDs, and the moly zone outlined at Cinco is several times larger than that in the largest known CRDs in Mexico, suggesting that very large scale silver, lead, zinc and copper mineralization may be present in the heart of Cinco de Mayo. Gold, silver and base metal intercepts encountered at depth in some of the recent drill holes further substantiate MAG's exploration model.

Related News Releases:

June 16, 2010	Pozo Seco - Assay Highlights
April 19, 2010	Mag Silver Drills Thickest Molybdenum-Gold Intercept to Date at Cinco De Mayo
March 26, 2010	MAG Silver Extends Molybdenum-Gold Zone At Cinco De Mayo
January 08, 2010	MAG Silver Extends Molybdenum-Gold Zone At Cinco De Mayo
November 10, 2009	MAG Silver Expands High-Grade Molybdenum And Adds Significant Gold At Cinco De Mayo
September 23, 2009	MAG Silver Discovers High Grade Molybdenum With Gold At Cinco De Mayo