MAG Silver* (MAG : TSX : $7.95), Net Change: 0.19, % Change: 2.45%, Volume: 67,377
Celebrating Cinco De Mayo a bit early this year. Canaccord Adams Senior Mining Analyst Eric Zaunscherb gave investors the
heads up on an early Cinco de Mayo party – hosted by MAG Silver. The Mexico-focused silver miner has been delivering
consistently positive drilling results from the Pozo Seco molybdenum-gold deposit on the wholly-owned Cinco de Mayo project
in Chihuahua, Mexico. Zaunscherb has generated a conceptual resource for Pozo Seco of 65 million tonnes averaging 0.14%
molybdenum and 0.18 g/t gold and a cash flow analysis discounted at 15%. The Pozo Seco discounted cash flow analysis
increases his valuation of the Cinco de Mayo project, driving an increase in his price target. Zaunscherb highlights that there is
no question that MAG Silver’s primary asset remains the 44% interest in Minera Juanicipio (Fresnillo owns remaining 56%),
within which the Valdecañas vein hosts a global resource independently estimated at 10.2 million tonnes grading 580 g/t silver,
1.73 g/t gold, 2.03% lead and 3.43% zinc for a total contained 189 million ounces of silver. Also, drilling is testing the parallel
Encino and Juanicipio veins with the potential to dramatically increase the resource. However, he notes, Cinco de Mayo is still
an important asset. After revisiting his valuation for the Cinco de Mayo project, his project valuation increases to $103 million
from $42 million and total project NAV rises to $563 million from $499 million. Juanicipio and Cinco de Mayo account for
77% and 18% of our total project NAV, respectively. Going forward, potential price catalysts looking forward include: 1) A
resource update and commencement of a prefeasibility study for the Juanicipio project in Q2/10; 2) An initial resource for Pozo
Seco on the Cinco de Mayo project in Q2/10; 3) Ongoing exploration results from Juanicipio, Cinco de Mayo and pipelines
projects in MAG Silver’s portfolio; and 4) Eventual conclusion of the arbitration process or rapprochement between MAG
Silver and Fre