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MAG Silver Corp (MVG)

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Web site:

http://www.magsilver.com

MAG Silver Corp. (TSX: MAG; NYSE.A: MVG) is focused on district scale projects located within the Mexican Silver Belt. Our mission is to become one of the premier companies in the silver mining industry. MAG is conducting ongoing exploration of its portfolio of 100% owned properties in Mexico including a silver, lead and zinc discovery and a moly-gold discovery at its 100% owned Cinco de Mayo Property in Chihuahua State. As well, MAG and Fresnillo plc are jointly developing the Valdecañas Deposit on the Juanicipio Joint Venture in Zacatecas State.

MAG and Fresnillo plc recently jointly approved and announced an independent updated resource estimate on the Juanicipio Property by Strathcona Mineral Services Limited (see news release dated November 10, 2011). This NI 43-101 compliant resource is now being used by AMC Mining Consultants (Canada) Ltd. to complete a NI 43-101 compliant updated preliminary economic assessment, expected to be completed in first quarter of 2012. This study will mark an important milestone in moving the Juanicipio project to the next level.

The August 2011 RPA estimate indicates more contained silver and gold as compared to the June 2011 estimate by Strathcona. The additional contained ounces are explained by RPA's inclusion of several additional drill holes in the Juanicipio Vein, the addition of two extra zones (Stockwork and Hanging Wall Vein 1) and a different approach to the calculation of cut-off grade. The RPA estimate uses a cut-off of US$55.00/tonne Net Smelter Return ("NSR"), which includes contained values for silver, gold and base metals. The June 2011 Strathcona estimate uses 100 grams per tonne (g/t) contained silver as a cut-off grade. Both approaches are industry acceptable; however the use of the 100 g/t silver cut off used by Strathcona excludes a measurable volume of gold-bearing and base metal rich mineralization lying deeper in the vein system.
Indicated Mineral Resources are estimated by RPA to total 6.2 million tonnes of 728 g/t silver, 1.9 g/t gold, 1.9% lead, and 3.9% zinc at an NSR cut-off value of US$55.00 per tonne. Total contained metals in the Indicated Resource are 146 million ounces of silver, 384,000 ounces of gold, 267 million pounds of lead, and 539 million pounds of zinc.
Indicated Mineral Resources according to RPA are higher by 18 million ounces of silver and 38,000 ounces of gold as compared to the June 2011 Strathcona estimate.
At the same cut-off value of US$55.00 per tonne, Inferred Mineral Resources are estimated by RPA to total 7.1 million tonnes of 373 g/t silver, 1.6 g/t gold, 1.5% lead, and 2.6% zinc. The Inferred Resources are estimated to contain 85 million ounces of silver, 370,000 ounces of gold, 236 million pounds of lead, and 400 million pounds of zinc.
Inferred Mineral Resources according to RPA are higher by 14 million ounces of silver and 178,000 ounces of gold as compared to the June 2011 Strathcona estimate.
Notwithstanding the RPA estimate, MAG continues to support, as agreed to by the Joint Venture, the use and inclusion of the Strathcona estimate for the pending updated preliminary economic assessment being undertaken by AMC Mining Consultants (Canada) Ltd.
Dan MacInnis, President and CEO of MAG stated, "The RPA estimate with its additional ounces of silver and gold continues to validate that through ongoing drilling and discovery there remains considerable upside in the project area."
The Indicated Mineral Resources are located in the Valdecañas Main Vein, the Hanging Wall Vein #1, and for the first time the Footwall Vein #1. The Inferred Mineral Resources are contained within the Valdecañas Main Vein, several hanging and footwall veins, a stock-work zone located within the Valdecañas structure and the Juanicipio Vein, located 1,100 metres to the south of the Valdecañas Vein.
Table 1 - August 5, 2011 RPA Estimate with June 1, 2011 Strathcona Resource Estimate for comparison

RPA August 2011* $US55 NSR Cut-Off	Tonnage M t	Ag g/t	Au g/t	Pb %	Zn %	Ag M oz	Au K oz	Pb M lb	Zn M lb
INDICATED
Valdecañas Main Vein	5.6	694	2.1	2.0	4.0	125	371	247	499
Footwall Vein	0.3	1,359	0.4	1.8	4.2	13	3.3	12	27
Hanging Wall Vein 1	0.3	755	0.8	1.1	1.9	8.2	9.2	8.4	14
Total Indicated	6.2	728	1.9	1.9	3.9	146	384	267	539
INFERRED							-
Valdecañas Main Vein	4.4	332	1.7	1.9	3.2	47	240	181	306
Footwall (Desprendido) Vein	0.7	456	0.8	1.0	1.3	11	18	16	21
Hanging Wall Vein 1	0.1	553	0.5	0.6	1.4	1.4	1.1	1.0	2.5
Footwall Vein 2	0.2	145	1.3	3.2	4.9	0.8	7.3	12	18
Stockwork Zone	0.6	44	1.3	0.6	1.5	0.9	27	8.4	20
Juanicipio Vein	1.1	693	2.2	0.7	1.3	24	77	17	32
Total Inferred	7.1	373	1.6	1.5	2.6	85	370	236	400

Strathcona June 2011 100 g/t Silver Cut-Off	Tonnage M t	Ag g/t	Au g/t	Pb %	Zn %	Ag M oz	Au K oz	Pb M lb	Zn M lb
INDICATED
Valdecañas Main Vein	5.7	702	1.9	2.2	4.2	128	346	268	521
Total Indicated	5.7	702	1.9	2.2	4.2	128	346	268	521
INFERRED							-
Valdecañas Main Vein	2.0	459	2.0	1.6	3.1	30	129	71	137
Footwall (Desprendido) Vein	1.8	540	0.9	1.8	3.2	31	52	71	127
Juanicipio Vein	0.5	638	0.8	0.9	1.7	10	13	10	19
Total Inferred	4.3	513	1.4	1.6	3.0	71	192	152	280

*Parameters and definitions for the RPA estimation

CIM definitions were followed for Mineral Resources.
Mineral Resources are estimated at an incremental NSR cut-off value of US$55 per tonne.
Mineral Resources are estimated using an metal prices of US$19.25/oz Ag, US$1,100/oz Au, US$0.93/lb Pb and US$0.88/lb Zn, and metal recoveries of 95% for Ag, 88% for Au, 94% for Pb, and 87% for Zn.
A minimum mining width of 1.5 metres was used.
Numbers may not add due to rounding.

Resource Estimation Details

The Juanicipio drill hole database includes 131 diamond core holes totaling 108,509 metres drilled prior to August 5, 2011. A set of cross sections and plan views were interpreted to construct three-dimensional wireframe models of the mineralized veins using the descriptive logs, a minimum NSR value of approximately US$55 per tonne, and a minimum thickness of 1.5 metres. Prior to compositing to two metre lengths, high grades were cut to 6,000 g/t silver, 16 g/t gold, and 15% for both lead and zinc. Grades were estimated using inverse distance cubed (ID3). Classification into the Indicated and Inferred categories was guided by the drill hole spacing and the apparent continuity of the mineralized zones.