MAG Silver Corp. (TSX-V: MAG) is pleased to report that both of the first two holes drilled in its Juanicipio Claim have successfully cut mineralized veins showing the same geological and mineralogical characteristics as the famous Santo Niño Veins of the adjoining Fresnillo Mine, but with indications of higher gold values. Hole 1 includes an intercept of 10.9 grams per tonne of gold and 200 grams silver per tonne (0.34 ounces per tonne gold and 6.25 ounces per tonne silver). Hole 2 has been completed and vein intercept assays are pending.
MAG President George Young said, "This is an excellent start to the Juanicipio exploration program and MAG's overall business plan. We started with a concept, based on geology, geochemistry and geophysics, to find extensions of the world's premier silver mine into our adjoining Juanicipio Property...and we have confirmed it. The Fresnillo system is much larger than historically thought. This opens up the potential along strike on these two structures as well as on at least five other similar parallel target structures, each with more than 2-3 kilometres of mapped strike length."
Juanicipio lies 5 km from the principal production headframe of the Fresnillo Mine, and less than 3 km from its westernmost underground workings. Fresnillo is operated by Industrias Peñoles and currently produces over 31 million ounces of silver annually from high-grade (23 oz/T Ag and .1 oz/T Au) veins. Overall production plus reserves for Fresnillo since 1560 is around 800 million ounces of silver with half of this production coming since 1976 when the high-grade Santo Nino style veins currently being mined were found. Current silver reserves exceed 500 million ounces. Recent exploration by Peñoles has focused on tracing veins discovered in the last 6 years westward from the historic mining centre towards Juanicipio. Peñoles has recently begun ramping up production to over 50 million ounces per year through exploitation of the San Carlos Vein, the biggest of its new western vein discoveries. See attached map.
The high-grade Hole 1 intercept was encountered approximately 500 metres vertically from the surface, as predicted by the Company's exploration model. Overall recovery in the 3-metre run was less than 30%, so a thickness cannot be accurately ascribed to this vein and the results should be treated as a vein grab sample. The intercept consists of 30 cm of intact vein wall drilled before the hole punched into a 1.5 metre wide void in the vein, combined with pyrargyrite-bearing quartz vein fragments recovered from drilling rubble on the footwall of the vein. It is likely that similar vein material was lost into this void. The intact vein margin is composed of acanthite (argentite) and sphalerite-bearing banded quartz showing brecciation and recementation textures indicating at least three stages of mineralization. The pyrargyrite-bearing rubble fragments show well-formed quartz crystals, locally studded by tiny pyrargyrite crystals. These features, including the large crystal-lined voids, are shared in all respects by Fresnillo's important Santo Niño style veins. A wedge-off of Hole 1, targeted to hit the vein structure again approximately 50 metres below the initial intercept, is underway to provide a potential solid cut for a more accurate grade-thickness profile.
Hole 2 was targeted on a separate, near-parallel structure coincident with a strong NSAMT geophysical anomaly on trend with Penoles' exploration. Mineralized breccias and veins were repeatedly cut within the geophysical anomaly, so the hole was extended 150 metres past its initial projected target depth of 750 metres. Mineralization includes pyrargyrite and acanthite-bearing veins, similar to Fresnillo's new, high-grade San Carlos Vein. Assay results for approximately 130 metres of core from this deep zone are pending. Assay results for the upper 340 metres of Hole 2 are in hand. These include a 1.5 metre sample running 1.5 grams per tonne gold lying in the middle of a 25 metre wide zone of pyrite-rich pervasive argillic alteration and local quartz-sulphide veinlets. This structure was cut at 187 metres downhole and overlies a deep NSAMT geophysical anomaly similar to that of the Hole 2 target. Mapping shows the two structures are about 200 m apart and roughly parallel. Future deeper drilling of this structure and similar NSAMT anomalies is indicated and planned.
Following the completion of the wedge offset of Hole 1, expected to be completed within two weeks, drilling will either continue with testing of target structures 3 or 4 as previously planned, or with a wedge offset of Hole 2 if assay results warrant. These additional assays are expected over the next three weeks.
In related news, the Company has filed with the TSX Venture Exchange for acceptance of the purchase agreement of the underlying interest in the Juanicipio I Claim that covers the Juanicipio Project area. MAG announced on May 30 that it had reached an agreement to purchase the underlying interest for US$250,000 and 200,000 shares of its common stock. This acquisition could potentially save the Company US$1,150,000 in option payments and US$2,500,000 in work commitments. This also eliminates a net smelter return royalty obligation.
MAG has initiated the surface mapping and sampling program at its Guigui property, as set out in the Company's recent prospectus. This work is preparatory to a drilling program scheduled for the fall. Guigui exploration is based on a geological, geochemical and geophysical model designed to find the source zones of the adjoining Santa Eulalia District near Chihuahua, Mexico. Santa Eulalia is another historic district that has produced at least 450,000,000 ounces of silver over the last 300 years, but the Guigui area has never been explored.
MAG has also completed aerial photography of the historic Batopilas District and is commencing rehabilitation of some of the principal underground workings in its Don Fippi property that contains the historic Batopilas District. Batopilas produced 250,000,000 ounces of silver from very high-grade native-silver orebodies prior to being shut down by the Mexican Revolution in 1913. MAG plans to commence drilling at Batopilas during 2004 following additional exploration work in the fall of 2003.
Qualified Person and Quality Assurance and Control
Dr. Peter Megaw, PhD, C.P.G., has acted as the Qualified Person as defined in National Instrument 43-101, for this drilling and disclosure and supervised the preparation of the technical information in this release. Dr. Megaw has a PhD in Geology and more than 20 years of relevant experience focussed on silver and gold mineralization and exploration and drilling in Mexico. He is a Certified Professional Geologist (CPG 10227) by the American Institute of Professional Geologists and an Arizona Registered Geologist (ARG 21613). Dr. Megaw is not independent as he is a MAG shareholder and a vendor of two projects, other than Juanicipio, whereby he may receive additional shares.
In the work for MAG, Dr. Megaw has designed the drill holes and directed the work of project geologists who have logged and sampled the drill core under his control and supervision. The core has been split or sawn in half, with half retained for future reference. The sampled half is stored securely until picked up on-site by the laboratory directly from the geologist in charge. The samples reported here were assayed by standard Fire Assay and Atomic Absorption methods by BSI Inspectorate in their Reno, Nevada laboratory after preparation in their Durango, Mexico facilities. Sampling procedures include the insertion by MAG of blind duplicates and blanks into the sample stream for assay in addition to the lab's internal quality control standards. Selected significant gold and silver assays will be checked by another competent laboratory.
Readers are referred to the qualifying report dated November 19, 2002 by Pincock, Allen and Holt , Qualified Person, available at www.magsilver.com for background information on the project and the program underway.
SELECTED INTERVALS AND RESULTS FROM DRILL HOLES JI0301 AND JI0302
Inter- Au Au Ag Ag Pb Zn
Hole cept FROM TO INTERVAL ppb oz/t ppm oz/t ppm ppm
1 1-1 596.25 596.45 0.20 219 38 1.2 36 49
1 1-2 596.45 598.45 2.00* 10856 0.35 200 6.4 690 2090
1 1-3 598.45 599.24 0.79* 44 20 0.6 19 68
1 1-4 599.24 601.00 1.76 55 16 0.5 16 147
2 2-1 186.45 187.95 1.50 1599 <0.1 7 68
1-1 Sheared and silicified shale with pyrite
1-2* Quartz vein & vein fragments with sphalerite,
acanthite and pyrargyrite
1-3* Sheared and silicified shale with pyrite
1-4 Sheared and silicified shale with pyrite
2-1 Pyritic, argillically altered intrusion w/ quartz
veinlets to 5 cm.
* These two samples flank a 1.5 m void...overall
On behalf of the Board of
MAG SILVER CORP.
"George S. Young"
For further information on behalf of MAG Silver Corp. contact George S. Young
Phone: (604) 630-1399
U.S. Phone:(303) 799-9015
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.