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.

Drilling at Cinco de Mayo during the third quarter 2009 totalled 5,536 metres (year to date 34,456 metres). Most significant of the drilling results for the period was discovery of a high-grade moly-gold zone over substantial widths. Hole 83, a geological target, was the first hole to hit moly-gold mineralization and cut a 56.8 metre section running 0.19% molybdenum with 0.11 ppm gold, including a 17.4 metre section within the lower part of the zone returning 0.47% molybdenum with 0.20 ppm gold. Hole 130, a geophysical follow-up target to Hole 83, intercepted 75 metres averaging 0.307% molybdenum (Mo), including 34.5 metres averaging 0.637% Mo with 0.140 ppm gold, including 4.65 metres running 1.64% Mo with 0.467 ppm gold.

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.

The Pozo Seco discovery warranted immediate follow up with one drill dedicated to a 200-metre grid program. Existing geophysical data is being reprocessed in 3-D, and incorporated with recent geochemical surveys and the ongoing drilling results to establish some early tonnage estimates and provide new drill targets. Also, using state of the art satellite imagery, an ambitious 200x200 km regional 3-D model, covering the entire Cinco property, is being undertaken. Cinco is large, complex and poorly exposed and all these efforts are designed to locate the intrusive source of this rich, widely mineralized system.

To date, the Company has drilled a cumulative 90,331 metres on the property, in 150 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.

The Company released additional favourable drilling results from Pozo Seco which show significant gold values in association with a high grade molybdenum zone. Hole CM09-139 is the best of the new holes, returning 0.73 grams Gold with 0.35% Molybdenum over 57.34 metres (18.63 to 75.97 m depth), including 15.27 metres (31.15 to 46.42 m depth) grading 1.66 grams Gold and 0.60% Molybdenum. Significant results have also been encountered in the three adjoining holes, which combine to show the host environment as a near-surface, flat-lying and well-mineralized breccia. Holes CM09-137 and 138 are angle holes designed to seek a feeder for the flat-lying breccia and both holes intersected possible feeder candidates. The holes reported are the first seven holes out of a proposed 20 hole, 2,000 metre program drilled on a 200 metre grid centred on discovery Hole CM09-130 (75.2 metres of .031% Mo).

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

Results from recent drilling continue to return encouraging grades and widths suggesting the presence of a large CRD system of undetermined magnitude. Mineralization remains open in all directions, and drilling continues to define the axis of maximum thickness of the manto and trace it towards its source.

Despite the extensive alluvial cover and limited drilling, MAG has now cut significant mineralization within a laterally traceable low-angle structural host over more than eight (8) square kilometres. The mineralization shows composition, textures, zoning and grades remarkably similar to other large CRDs.

Related News Releases:

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
January 20, 2009	Mag Silver Reports More High Grade Silver / Lead / Zinc Mineralization At Cinco De Mayo
December 10, 2008	MAG Silver Intersects More High Grade Silver / Lead / Zinc Mineralization At Cinco De Mayo
September 18, 2008	MAG Silver Expands Silver / Lead / Zinc Mineralization At Cinco De Mayo
July 08, 2008	MAG Silver Expands "Jose Manto" At Cinco De Mayo With New High Grade Silver / Lead / Zinc Intercepts