Canaccord Genuity Mining Analyst Nicholas Campbell (10/4/2012)

But it’s not May 5 yet. MAG Silver announced an initial resource for its Cinco de Mayo project in Mexico. The company reported initial inferred resource of 12.45 million tonnes grading 132 g/t Ag, 0.24 g/t Au, 2.86% Pb and 6.47% Zn (containing 52.7 million ounces of silver, 785 million pounds of lead and 1,777 million tonnes of zinc), using a $100 NSR cut-off. This represents an initial inferred silver-equivalent resource of 123 million ounces of silver. While the initial grade was a bit lower than expectations, the size of the resource exceeded expectation and the grade of the resource is still robust. There is also
significant upside to the resource as this maiden estimate did not include any contribution from the Pegaso Zone discovery, which intercepted 61 metres of high-grade massive sulphide. Within Canaccord Genuity Mining Analyst Nicholas Campbell’s valuation of MAG, he valued Cinco de Mayo based on a $2.25/oz value on a potential silver-equivalent resource of 60 million ounces. Campbell sees little value for the Cinco de Mayo project in the market value for MAG today. He also thinks the company is likely to consider a spin out of the project into a new vehicle within the next year.  Spin out so someone can acquire Juanicipio