MAG Silver Corp. (TSX:MAG)(NYSE MKT:MVG) ("MAG" or the "Company")
announces the Company's unaudited financial results for the three
and nine months ended September 30, 2012. For complete details of
the third quarter unaudited Condensed Interim Consolidated
Financial Statements and related Management's Discussion and
Analysis, please see the Company's filings on SEDAR (www.sedar.com)
or on EDGAR (www.sec.gov). All amounts herein are reported in
United States dollars unless otherwise specified.
As at September 30, 2012, the Company had working capital of
$43,685,026, including cash on hand of $44,081,885. On September 5,
2012, the Company closed a brokered private placement for 3,526,210
common shares of the Company at a price of C$9.40 per share for net
proceeds of $31,325,931. The primary use of cash during the three
and nine months ended September 30, 2012 was for exploration and
evaluation expenditures totaling $4,691,045 and $10,481,860
respectively, and an additional $824,936 and $3,203,074
respectively for the Juanicipio property. Accounts receivable at
September 30, 2012 totaled $1,123,544 (2011: $2,218,162) and was
comprised primarily of value added taxes repayable to the Company
by the Government of Mexico. Current liabilities at September 30,
2012 amounted to $2,145,298 (2011: $2,069,740) and are attributable
primarily to accrued exploration and legal expenses.
The Company's net loss for the three and nine months ended
September 30, 2012 amounted to $3,609,463 and $6,167,196
respectively (September 30, 2011: $3,049,184 and $4,463,335
respectively). The net loss increased in the current period due to
additional costs incurred in the current quarter dealing and
negotiating with a dissident group of MAG shareholders, Mining
Investors for Shareholder Value ("MISV"). MISV and the Company
ultimately reached a settlement agreement on September 4, 2012
whereby MAG presented a slate of nine directors for election to
shareholders at the annual and special meeting, including two MISV
nominees (Richard Clark and Peter Barnes), along with seven
existing members of MAG's board. Subsequent to the quarter end, the
shareholders overwhelmingly elected all nine directors standing for
election.
OUTLOOK
Minera Juanicipio
A National Instrument 43-101 compliant Updated Preliminary
Economic Assessment for the Juanicipio Project carried out by AMC
Mining Consultants (Canada) Ltd. (the "AMC Study") was announced on
June 14, 2012 and filed on SEDAR on July 16, 2012, (see News
Release dated June 14, 2012:
http://www.magsilver.com/s/NewsReleases.asp?ReportID=530692). With
the completion of the AMC Study, MAG and Fresnillo Plc. now have a
framework on which the joint venture Technical Committee can build
upon for the continued advancement of the Juanicipio Project.
On August 15, 2012, the Company announced that the board of
directors of Minera Juanicipio S.A. de C.V. ("Minera Juanicipio")
had approved an 18 month mine permitting and underground
development budget of $25 million ($10.0 million for 2012 with the
remaining $15 million earmarked for 2013). The 2013 underground
development plan includes the first 2,500 metres of ramp
development and is projected to cost $11.9 million with another
$2.3 million dedicated to further drilling, plus $1.2 million for
reporting, general and other administrative expenses. MAG's 44%
share of the 2013 predevelopment budget is $6.6 million. The Minera
Juancipio 2013 exploration budget will be determined in the fourth
quarter.
The Joint Venture has begun the permitting process and
anticipates receipt of all necessary permits by early 2013, with
the underground decline ground breaking expected to follow shortly
thereafter.
Cinco de Mayo
Because of the expense of drilling at depths, MAG has currently
contracted for the execution of an orientation 2 and 3 Dimensional
Seismic survey to determine if the newly discovered Pegaso system
can be better defined before further deep drilling is undertaken.
This work is scheduled to commence early in the first quarter of
2013. Definition and exploration drilling will resume immediately
thereafter pending completion of the seismic survey and permit
renewal. Exploration drilling permits in Mexico now require a "Soil
Use Change Permit," reflecting conversion of land from agricultural
to industrial use. These permits incorporate surface access
permissions, verification of mining concession title, and
compliance with environmental norms. The Company is in the process
assembling the information required in order to submit the
application, and final permit approval is expected in the first
quarter of 2013.
On October 3, 2012, MAG announced that Roscoe Postle Associates
Inc. ("RPA") had completed the first independent mineral resource
estimate for the Upper Manto (see News Release dated October 3,
2012: http://www.magsilver.com/s/NewsReleases.asp?ReportID=550945).
The Company is currently negotiating the terms of reference for a
PEA on the Upper Manto for completion in 2013. In addition,
metallurgical test work on the Pozo Seco zone has indicated that
recoveries of both molybdenum and gold are sufficient to warrant a
PEA, and MAG has engaged RPA and Samuel Engineering to carry out an
independent PEA on Pozo Seco which will be completed in the fourth
quarter of 2012.
About MAG Silver Corp. (www.magsilver.com)
MAG 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. MAG and Fresnillo plc are jointly developing the Valdecanas
Vein and delineating the Desprendido and Juanicipio discoveries on
the Juanicipio Joint Venture in Zacatecas State. MAG is based in
Vancouver, British Columbia, Canada. Its common shares trade on the
TSX under the symbol MAG and on the NYSE MKT under the symbol
MVG.
On behalf of the Board of MAG SILVER CORP.
Larry Taddei, Chief Financial Officer
This release includes certain statements that may be deemed to
be "forward-looking statements" within the meaning of the US
Private Securities Litigation Reform Act of 1995. All statements in
this release, other than statements of historical facts are forward
looking statements, including statements that address future
mineral production, reserve potential, exploration drilling,
exploitation activities and events or developments. Forward-looking
statements are often, but not always, identified by the use of
words such as "seek", "anticipate", "plan", "continue", "estimate",
"expect", "may", "will", "project", "predict", "potential",
"targeting", "intend", "could", "might", "should", "believe" and
similar expressions. These statements involve known and unknown
risks, uncertainties and other factors that may cause actual
results or events to differ materially from those anticipated in
such forward-looking statements. Although MAG believes the
expectations expressed in such forward-looking statements are based
on reasonable assumptions, such statements are not guarantees of
future performance and actual results or developments may differ
materially from those in the forward-looking statements. Factors
that could cause actual results to differ materially from those in
forward-looking statements include, but are not limited to, changes
in commodities prices, changes in mineral production performance,
exploitation and exploration successes, continued availability of
capital and financing, and general economic, market or business
conditions, political risk, currency risk and capital cost
inflation. In addition, forward-looking statements are subject to
various risks, including that data is incomplete and considerable
additional work will be required to complete further evaluation,
including but not limited to drilling, engineering and
socio-economic studies and investment. The reader is referred to
the Company's filings with the SEC and Canadian securities
regulators for disclosure regarding these and other risk factors.
There is no certainty that any forward looking statement will come
to pass and investors should not place undue reliance upon
forward-looking statements.
Cautionary Note to Investors Concerning Estimates of Indicated
Resources
This press release uses the term "Indicated Resources". MAG
advises investors that although this term is recognized and
required by Canadian regulations (under National Instrument 43-101
- Standards of Disclosure for Mineral Projects), the U.S.
Securities and Exchange Commission does not recognize this term.
Investors are cautioned not to assume that any part or all of
mineral deposits in this category will ever be converted into
reserves.
Cautionary Note to Investors Concerning Estimates of Inferred
Resources
This press release uses the term "Inferred Resources". MAG
advises investors that although this term is recognized and
required by Canadian regulations (under National Instrument
43-101-Standards of Disclosure for Mineral Projects), the U.S.
Securities and Exchange Commission does not recognize this term.
Investors are cautioned not to assume that any part or all of the
mineral deposits in this category will ever be converted into
reserves. In addition, "Inferred Resources" have a great amount of
uncertainty as to their existence, and economic and legal
feasibility. It cannot be assumed that all or any part of an
Inferred Mineral Resource will ever be upgraded to a higher
category. Under Canadian rules, estimates of Inferred Mineral
Resources may not form the basis of feasibility or pre-feasibility
studies, or economic studies except for Preliminary Assessment as
defined under Canadian National Instrument 43-101. Investors are
cautioned not to assume that part or all of an Inferred Resource
exists, or is economically or legally mineable.
Please Note:
Investors are urged to consider closely the disclosures in MAG's
annual and quarterly reports and other public filings, accessible
through the Internet at www.sedar.com and
www.sec.gov/edgar/searchedgar/companysearch.html.
Neither the Toronto Stock Exchange nor the NYSE MKT has reviewed
or accepted responsibility for the accuracy or adequacy of this
press release, which has been prepared by management.
Contacts: MAG Silver Corp. Gordon Neal VP Corp. Development
(604) 630-1399 or Toll Free: 1-866-630-1399 (604) 681-0894
(FAX)info@magsilver.com www.magsilver.com
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