Jun 07, 2005
MAG Silver Accelerates Purchase of the Don Fippi and Guigui Properties
Vancouver, B.C.... MAG Silver Corporation (TSXV:MAG; OTCBB:MSLRF) announces the accelerated buyout of the Don Fippi (Batopilas) and Guigui (Santa Eulalia) Properties both located in Chihuahua State, Mexico. With this purchase MAG Silver eliminates exposure to further cash payments of US$900,000, work expenditure commitments of US$5.25M, and issues 1,200,000 shares less than that anticipated under the original option agreement. The properties will remain subject to royalties and other terms of the original option agreement.
Under the terms of the buyout agreement MAG will issue the underlying agreement holders a total of 1,500,000 common shares of MAG Silver Corporation disbursed at 750,000 shares per property. This purchase gives MAG Silver Corporation an undivided 100% interest in the properties. The terms of the deal are subject to approval from the TSXV.
The MAG Silver management team has determined that the properties are integral to MAG's commitment to district scale exploration and owning them outright will be a strong benefit to the Company's future.
MAG originally optioned the two properties in 2003 and has conducted exploration work on both properties from 2003 through 2005. MAG has recently announced the commencement of a diamond drill program at Guigui (see MAG news release of June 2, 2005) to follow up the silver and base metal intersections from last years phase one drill program.
The underlying property/agreement holders are owners and partners of Minera IMDEX/Cascabel, the largest mineral exploration consulting group in Mexico. IMDEX/Cascabel will continue to provide geotechnical consulting services to MAG Silver as required. Dr. Peter Megaw, president of IMDEX, says "We are pleased that MAG has chosen to exercise these options early; reflecting MAG's confidence in the importance of these projects. This makes us major shareholders in MAG and we look forward to focusing our efforts on adding value to MAG through well integrated exploration of all MAG's holdings."
Dan MacInnis, President and CEO of MAG comments "MAG's exploration programs have validated IMDEX/Cascabel's original exploration concepts that were in place at the time MAG became involved in these projects. With this outright purchase we now control these properties and the districts to the long term benefit of MAG Silver".
MAG's property inventory includes the Don Fippi (Batopilas) Property, the Guigui Property and the Juanicipio/Lagartos properties in the Fresnillo trend. The scale of these projects confirms MAG as the most active district scale explorer in Mexico. We now have four major silver district programs where MAG Silver controls the entire district and/or are the largest landholder.
About MAG Silver Corp.
MAG is a Silver exploration company focused on projects located within the Mexican Silver Belt. Our large land inventory is well positioned in mining districts with historical and ongoing large-scale, high-grade silver production. MAG's exploration efforts are engaged in the search for multi-million ounce silver deposits on a district scale. MAG's position includes Juanicipio in the Fresnillo Silver District (also hosting the largest silver mine in the world) where the company has an active joint venture with Industrias Peñoles, the largest silver producer in the world. We are committed to discover silver deposits of size and grade that are able to withstand and overcome fluctuations in commodity prices. Our mission is to become one of the premier silver companies in the Silver Mining Industry. MAG is based in Vancouver, British Columbia, Canada and trades on the TSXV as MAG.
On behalf of the Board of
MAG Silver Corporation:
President and CEO
For further information on behalf of MAG Silver Corp. contact Gordon Neal
Phone: (604) 630-1399
Toll free: (866) 630-1399
Fax: (604) 484-4710
The TSX Venture Exchange has not reviewed and does not accept responsibility for the accuracy or adequacy of this news release, which has been prepared by management.
Note to U.S. Investors: Investors are urged to consider closely the disclosure in our Form 20F, File No. 0-50437 available at our office: Suite 328-550 Burrard Street, Vancouver BC, Canada, V6C 2B5 or from the SEC: 1(800) SEC-0330.
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