MAG Silver is a leading exploration company working in the Mexican Silver Belt. The high-grade discoveries on our Juanicipio property are helping transform the Fresnillo Trend, the world’s oldest and most prolific silver district. Work with partner Fresnillo plc (56%) is defining a world-class mineral resource – key to next-generation production by the world’s largest silver miner.

Watch MAG Silver President & CEO Dan MacInnis comment on withdrawal of Fresnillo's "take-under" bid on BNN. (6/25/09)

Listen now to a radio interview with Dan MacInnis, President & CEO, on Financial Sense (MacInnis third interview).

Mexico's Fresnillo said its Fresbal unit has asked the Ontario Securities Commission to review the decision by MAG's independent committee's decision to suspend work on the valuation, which it alleged on Friday was a delaying tactic.

With shares of MAG trading above the bid, ever since it was announced, the market is also expecting bigger things to happen. At the start of this month, MAG said its valuation was halted because Fresnillo had failed to provide key information, a charge Fresnillo denied. MAG, whose main asset is a 44% stake in the Juanicipio property, a joint venture with Fresnillo, is now ramping up exploration at its other assets to try to generate as much good news as possible.

Canaccord Adams Senior Mining Analyst Eric Zaunscherb has highlighted a number of important catalysts for MAG's market price near-term:

1. Results from a metallurgical study are expected imminently. Our modeling employs recovery rates encountered in the Fresnillo operation, but we understand that studies have been ongoing to improve gold recoveries given superior gold grades at Valdecañas


2. The Valdecañas vein on the Juanicipio joint venture currently hosts a global resource of 238 million ounces of silver, plus significant quantities of gold, lead and zinc. By the end of February we expect a resource update for Valdecañas, which will likely take the global resource to close to 300 million ounces silver


3. The joint venture is conducting a "pre-scoping" study, results of which are expected by the end of February after incorporating the updated resource. Our model follows the latest guidance on development at Juanicipio, whereby Juanicipio would be developed at the tail end of the Fresnillo II plan for 2015-2016. This pre-scoping study, however, may conclude that Juanicipio, with its superior grades, could be developed on a faster timeline with inherently higher value


4. Watch for ongoing drill results from exploration of the Encino and Juanicipio veins on the Juanicipio joint venture with important implications for valuation. Results from the wholly-owned Cinco de Mayo project may also add incrementally to the company's valuation.

    -ERIC ZAUNSCHERB,   CANACCORD ADAMS (02/10/09)

MAG's independent committee suspended the formal valuation by the independent valuator this week. The committee claims that joint venture partner Fresnillo is not providing all the technical and engineering data needed to fully and legally place a value on MAG's 44% of the Juanicipio property. Specifically, they believe Fresnillo has detailed costs and mine plans that incorporate the Valdecañas Vein into their Fresnillo II development project. In part, this is based on the construction of a shaft and ramp between the Jarillas and Valdecañas veins.

Fresnillo, on the other hand, claims they have complied with their obligations and that the evaluator has all relevant information. They have requested that the OSC review MAG's independent committee's decision.

From my perspective, it makes economic sense for Fresnillo to mine the higher grade Valdecañas Vein as quickly as possible. Given that the development shaft and ramp are well positioned to do so I have to believe Fresnillo has completed engineering and cost studies. If so, this information is very important to ascribing a fair and accurate value on MAG's 44% of the joint venture company. I do not, however, know what information MAG is in receipt of and therefore cannot comment on the legitimacy of their claim or Fresnillo's counter claim. We will wait on the OSC and in the meantime hope for the discovery of another vein.
    -   Exploration Insights (02/09/09)

"This is one of the few companies that has a silver deposit that is not reliant on base metal credits. This is a very high grade silver deposit. Their Valdecañas Vein on the Jaunicipio project, Zacatecas, Mexico, is probably the best silver discovery in quite some time.

. . .this is a fantastic deposit that they’ve found and within the property package they’ve got serious potential for additional discoveries. So I like MAG Silver and their partner, Fresnillo, is a Mexican silver company, probably the best silver company in the world. They’re 56% owners and they operate. They’ve made an offer to purchase MAG Silver for the equivalent of $4.54 U.S. MAG’s currently trading at $5.70, I believe, something in that order. From the beginning I expected a takeout offer from Fresnillo."
    -   The Gold Report Interview with Brent Cook (01/27/09)

Against a backdrop of tight capital markets, cash and sustainability are the name of the game and our backbone criteria in evaluating investment opportunities in the small cap mining space in the near term. With cash now the new commodity to hunt for, watch the junior/intermediates for takeouts.

It's a new year and a new market for small cap mining stocks. There's a new credit freeze and a market underpinned by weak commodity prices, except for gold and uranium.

MAG Silver has a strong cash position of $59 million (September 2008 - Q3/08), currently estimated at $54 million. The strong treasury supports more than a year's sustainability, based on an average trailing-four-quarter annual burn of $17 million. The company has outperformed the HJEI (43 companies) and the precious metals equity group (HJPI), but underperformed silver on a trailing-l2-month basis. Quarter to date, the company outperformed silver and the equity groups. MAG is a top 10 market performer over the trailing 12 months and week to date, performing well on an absolute and composite basis (relative to equity groups and silver).
    -   Haywood Securities, Inc. (01/26/09)

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