Lagartos

LAGARTOS PROPERTY
MUNICIPIO FRESNILLO ZACATECAS, MEXICO

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June 2010

With 135,000 hectares comprising the Lagartos property holdings, MAG is a dominant landholder in the Fresnillo Silver Trend, the world's premier silver producing district; looking to repeat success of Juanicipio in 'unearthing' mineral wealth beneath alluvial cover

Central to the MAG Silver story is the success in 2005 in discovering the Valdecañas Vein, on our Juanicipio Property, in the Fresnillo Silver Trend.

This vein was encountered just 5 kilometres from the main headframe of our partner's (Industrias Peñoles) Fresnillo Mine, the world's largest primary silver producer. Key to the discovery was MAG's belief that hidden underneath the alluvium that covers virtually all of the Juancipio property, lay significant vein systems at depth. That proved correct, and the Valdecañas Vein today represents a substantial new mineral resource - still open and growing - and is considered within the industry one of the most important silver discoveries in recent memory.

Following this success MAG moved quickly to secure, through acquisition and staking, two very large claim groups lying northwest and southeast of the Juanicipio Joint Venture. Both properties lay along the Fresnillo Silver Trend, a large regional structural zone hosting the Guanajuato, Zacatecas and Fresnillo epithermal silver-gold vein districts.

All of the known deposits were found in outcrop between 350 and 500 years ago, but since over 60% of the trend is masked by alluvial soils, as was the Valdecañas Vein, MAG hopes it can repeat its Juanicipio success with discoveries at Lagartos.

Lagartos SE has seen exploration focused on the eastern extension to the past producing Zacatecas silver district. Drilling in late 2009 appears to have discovered the continuation of the prolific Veta Grande Vein, the second most important production vein in the Zacatecas district. The holes were targeted along the direct projection of the vein, approximately 500 metres east of its last confirmed outcrop. This discovery shows that this important and historic vein is open along strike from areas of past production including an additional 4 kilometres of possible projection on MAG's wholly owned property. In a second discovery in the same vicinity, holes drilled in the Puerto Rico Vein, which runs parallel to the Veta Grande Vein, have encountered high-grade silver mineralization (see MAG press release dated January 19, 2010). Accompanying low base metal values indicate the vein was likely intersected at a high level. Future work will focus on exploring these significant results.

The Veta Grande Vein was the second most important vein in this billion-ounce silver producing district, with significant ore-shoots distributed intermittently along the 12 kilometres of its trace across the north-central part of the district. The vein disappears under alluvium at both ends. MAG sought its continuation at the northwest end at La Luz before turning to the southeast extension (see MAG Press Release of June 5, 2009). There are no outcrops in the Veta Grande SE target area, so drilling was targeted on the south eastern projection of the principal Veta Grande Vein and a coincident linear colour anomaly. Alluvium was found to be less than 120 metre thick.

The result of drilling indicates that the Veta Grande structure can be traced across the range-bounding fault with little lateral displacement. Vertical movement on the fault should have dropped the eastern part down, so any bonanza zone is expected to found at a deeper level than in the mined portion of the vein. Geophysical data are being examined to determine if anomalies potentially reflecting mineralization occur along the trace of this structure farther to the Southeast.

The Puerto Rico Vein runs parallel to, and lies approximately 3 kilometres north of, the famous Veta Grande Vein. The Puerto Rico Vein has seen minor historic production and remains largely unexplored. Seven holes were drilled along approximately 1,000 metre of strike length of the vein, intersection the structure between 150 and 350 metre beneath the surface (see MAG press release dated January 19, 2010).

The presence of high silver and gold grades with low base metals in three of the Puerto Rico vein intercepts indicates they are very high within the zoning pattern expected for Zacatecas District epithermal veins. The contrasting silver versus base metal-bearing intercepts in hole PR-03 indicates two separate mineralization events, intersected at different levels within the epithermal zoning pattern. This composite vein signature is typical of many of the larger veins in the Zacatecas District, including the Veta Grande and Mala Noche veins.

Lagartos Properties: Outlook

A gravity survey is planned for Lagartos NW in 2010 to explore for a buried silicified ridge that may sub crop in a shallower alluvial environment. At Lagartos SE ground geological and geophysical surveys are proposed to help in tracing the extensions of these vein targets across MAG controlled property in preparation for follow up drilling later in 2010.

The Company spent $3,372,345 in exploration costs on the combined Lagartos land package in 2009 (2008: $2,194,389) and has spent $9,907,735 in exploration costs and $86,490 in acquisition costs to December 31, 2009. The Company's budgeted exploration programs for the Lagartos land package for 2010 are approximately $1,500,000.

Related News Releases:

July 15, 2009	MAG Silver Options San Ramone Property, Zacatecas
January 23, 2008	MAG Silver Updates Initial Exploration Program at Lagartos SE in Zacatecas District
April 18, 2007	MAG Silver Begins Drill Program at Lagartos SE