SOURCE: MAG Silver Corp.

August 24, 2005 09:30 ET

MAG Silver and Penoles Report Drill Program Initiated at Juanicipio

VANCOUVER, BC -- (MARKET WIRE) -- August 24, 2005 -- MAG Silver Corporation (TSX-V: MAG) and Industrias Peñoles S.A. de C.V. are pleased to announce that a diamond drill program has been started on the Juanicipio Joint Venture, Zacatecas State, Mexico. The exploration Joint Venture covers MAG's wholly owned 8,302 hectare Juanicipio Property in Zacatecas, Mexico and Peñoles can earn a 56% interest in the property by expending US$5,000,000 over a four year period. MAG continues to hold a 100% interest in the adjacent Lagartos NW and SE properties which make MAG the largest landholder in the Zacatecas Silver district.

The drill exploration program is expected to begin with a series of drill holes designed to follow up on an intersection in a previous drill hole by MAG Silver. The intersection was 2.0 metres (30% recovery) of 630 grams per tonne silver and 10.8 grams per tonne gold. As the program progresses other mineralized structures intersected in previous drilling by MAG Silver will in turn be drill tested by Peñoles. Exploration work carried out by Peñoles over the past several months has included regional and detailed mapping on Juanicipio and adjoining ground as well as detailed and reconnaissance geophysics. Targets generated by this work will also be tested during this initial round of drilling by Peñoles.

The Peñoles-MAG Joint Venture on the Juanicipio Property lies 5 kilometres west from the principal production head-frame of the Fresnillo Mine, and 2.3 kilometres from its westernmost underground workings. Exploration over the past 6 years by Peñoles has traced a series of new silver-rich veins to the south west of the mine area. Peñoles has also been expanding production at the Fresnillo mine with the recent development of the high-grade silver San Carlos vein system. Peñoles' current exploration campaign resulted in the recently announced "El Saucito" silver-gold vein discovery lying near the eastern boundary of the Juanicipio property. In Industrias Peñoles 2004 annual report they quote El Saucito Deposit to be in the order of one million ounces (gold equivalent) at an average grade of 11.0 grams per tonne gold equivalent. This significant new mineral discovery enlarges the mineral endowment of the Fresnillo mine district and highlights the potential for new and similar discoveries "under cover" in and along the Fresnillo trend. MAG's 2003-2004 exploration drilling intersected several vein structures with significant silver and gold values.

About Peñoles

Industrias Peñoles, S.A. de C.V. and its subsidiaries make up one of Mexico's largest industrial conglomerates. Since its founding in 1887, this group has been engaged in the sustainable exploitation of non-renewable natural resources. Peñoles is an integral part of Grupo BAL, a private, diversified group made up of independent Mexican companies ranging from mining to insurance to retail. Peñoles' productive operations are currently located in Mexico, where it operates the world's richest silver mine (Fresnillo), the world's fourth largest metallurgical complex in terms of the value of its production. These operations make Peñoles the world's largest producer of refined silver, metallic bismuth and sodium sulphate, and a leader in Latin America in refined gold, lead and zinc.

About MAG Silver Corporation

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. We are committed to the discovery of 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 TSX-V under the symbol MAG.

On behalf of the Board of

MAG SILVER CORP.

"Dan MacInnis"

President and CEO

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.

Contact Information

  • For further information on behalf of MAG Silver Corp. contact:
    Gordon Neal
    VP Corp. Development
    Website: www.magsilver.com
    Phone: (604) 630-1399
    Toll free: (866) 630-1399
    Email: Email Contact
    Fax: (604) 484-4710

    For further information on behalf of Industrias Peñoles S.A. de C.V.
    contact:
    Emilio Fandiño
    Investor Relations
    Website: www.penoles.com.mx
    Phone: 52 (55) 5279 3250
    Email: Email Contact
    Fax: 52 (55) 5279 3217