Mag Silver gets Pozo Seco resource

VANCOUVER — A first resource estimate for Mag Silver’s (MAG-T, MVG-X) Pozo Seco target in Mexico has outlined a significant molybdenum- gold deposit.

The company discovered the Pozo Seco zone in late 2009 on its 220-sq.-km Cinco de Mayo property in Mexico’s northern Chihuahua state. Mag has now drilled over 115,000 metres on the property in more than 240 holes, while the Pozo Seco resource is based on 34,300 metres of drilling over 119 holes.

Using a cutoff grade of 0.022% moly, the resource contains 29.1 million indicated tonnes grading 0.147% moly and 0.25 gram gold per tonne for 94 million contained lbs. moly and 230,000 oz. gold. Pozo Seco hosts a further 23.4 million inferred tonnes of 0.103% moly and 0.17 gram gold for 53.2 million lbs. moly and 129,000 oz. gold.

The resources are contained within an area roughly 2 km long by 300 metres wide and 50 metres thick, elongated in a northwest-southeast direction.

Cinco de Mayo is one of Mag Silver’s three “carbonate-replacement deposit” properties, characterized by massive to semi-massive silver-lead-zinc sulphide intrusions.

Pozo Seco is an oxide deposit that Mag Silver is targeting for leach and flotation methods of recovery. Results of metallurgical testing are expected by the end of August.

The company also released 13 new infill drill holes that were included in the resource estimate. The latest results included hole 249 with 67.3 metres carrying 0.178% moly and 0.22 gram gold, hole 262 with 100.1 metres averaging 0.182% moly and 0.23 gram gold and hole 264 with 71 metres carrying 0.155% moly and 0.43 gram gold, all starting from between 10 and 25 metres depth.

Along with its molybdenum-gold project, Mag Silver continues to advance its other assets in Mexico. On the Juanicipio property, joint-venture partner Fresnillo (FRES-L) started a prefeasibility study for an underground silver mine. Fresnillo controls 56% of the project while Mag Silver controls the rest.

The company was up 46¢ to $6.95 on the resource news. It has a 52- week trading range of $4.85-$8.26 and 54.5 million shares outstanding.