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 100% owned 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. 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.

In August 2010 MAG announced their first mineral resource estimate for the Pozo Seco Molybdenum (Moly)-Gold discovery. Results confirm that Pozo Seco is a significant high grade oxide molybdenum/gold deposit and metallurgical test work is underway looking at leach and floatation methods for recoveries.

Table 1 - Mineral Resource Estimate for the Pozo Seco Deposit Zone / Classification Tonnage (Tonnes x 1000) Molybdenum (%) Molybdenum (pounds) Gold (g/t) Gold (ounces) INDICATED                FW1 2,719 0.116 6,943,000 0.27 24,000      MZ 26,346 0.150 87,082,000 0.24 206,000 Total Indicated 29,066 0.147 94,012,000 0.25 230,000             INFERRED                FW1 4,357 0.086 8,220,000 0.22 31,000      FW3 1,312 0.109 3,155,000 0.19 8,000      FW4 38 0.057 48,000 0.02 0      HW1 819 0.065 1,177,000 0.08 2,000      HW2 1,234 0.070 1,911,000 0.14 5,000      MZ 13,857 0.118 36,009,000 0.15 67,000      NWZ 1,759 0.069 2,686,000 0.27 15,000 Total Inferred 23,376 0.103 53,205,000 0.17 129,000

Notes:

1. CIM Definition Standards have been followed for classification of Mineral Resources.
2. The cut-off grade of 0.022% Mo was estimated using a Mo price of US$17/lb and assumed operating costs and recoveries.
3. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
4. Totals may not add correctly due to rounding.

The significance of this discovery is two-fold: 1) the very high-grade moly (approximately 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 128,000 metres on the property, in more than 270 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.

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.

Information Concerning Estimates of Mineral Resources

Cautionary Note to Investors Concerning Estimates of Indicated Resources

This site uses the term "Indicated Resources". MAG advises investors that although this term is recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects), the U.S. Securities and Exchange Commission does not recognize this term. Investors are cautioned not to assume that any part or all of mineral deposits in this category will ever be converted into reserves.

Cautionary Note to Investors Concerning Estimates of Inferred Resources

This site uses the term "Inferred Resources". MAG advises investors that although this term is recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects), the U.S. Securities and Exchange Commission does not recognize this term. Investors are cautioned not to assume that any part or all of the mineral deposits in this category will ever be converted into reserves. In addition, "Inferred Resources" have a great amount of uncertainty as to their existence, and economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, or economic studies except for Preliminary Assessment as defined under Canadian National Instrument 43-101. Investors are cautioned not to assume that part or all of an Inferred Resource exists, or is economically or legally mineable.

Resource Estimation Details

The drill hole database within the Pozo Seco area includes 119 holes (up to and including CM10-264) totalling 34,311 metres. A set of cross sections and plan views were interpreted to construct three-dimensional wireframe models using a minimum grade of approximately 0.02% Mo and a minimum vertical thickness of two metres. Prior to compositing to three metre lengths, high Mo grades were cut to 1.0% Mo and gold values were cut to 1.8 g/t Au.

Variogram parameters were interpreted from three-metre composited assay values. Block model Mo and Au grades within the wireframe models were estimated by ordinary kriging. Classification into the Indicated and Inferred categories was guided by the drill hole density, interpreted variogram ranges, and the apparent continuity of the mineralized zones. Preliminary Whittle open pit analysis was used to confirm that the project has reasonable prospects for economic extraction. Only material within the preliminary pit shell is reported as Mineral Resources. In plan view, the resources are contained within an area 2,000 metres long by 300 metres wide, elongated in the northwest-southeast direction.

This has been read and approved by David A. Ross, P.Geo, Senior Consulting Geologist at Scott Wilson RPA who is the qualified person as defined under National Instrument 43-101.

Related News Releases:

November 10, 2010	Cinco De Mayo September 30, 2010 Management Discussion and Analysis ("MD&A") excerpt, with full Assay Table and Illustrative Map
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