Communicators

MAG Announces Robust New PEA Based on Substantially Increased Juanicipio Mineral Resource

- Low LOM AISC (1) of $5.02/oz of silver over an initial 19 years of mine-life

- Base case pre-tax IRR 64.5%; after tax IRR 44.5%

- Initial capital costs $360 million (100% basis)

- Accelerated early silver flow gives less than a 2-year payback from plant start-up

November 7, 2017 - Vancouver, B.C. MAG Silver Corp. (TSX:MAG) (NYSE A:MAG) (“MAG” - http://www.commodity-tv.net/c/search_adv/?v=297474 ) is pleased to announce the results of an independent National Instrument 43-101 Technical Report encompassing a new Mineral Resource estimate and Preliminary Economic Assessment (“PEA”) for the stand-alone Juanicipio Joint Venture Project (“Juanicipio Project”) in Zacatecas State, Mexico, owned 44% by MAG and 56% by the operator Fresnillo plc (“Fresnillo”).  The studies were commissioned by MAG and carried out by AMC Mining Consultants (Canada) Ltd. (“AMC”).  Unless otherwise noted, all numbers are reported in US dollars on a 100% basis. 

MINERAL RESOURCE AND PROJECT HIGHLIGHTS

2017                      MINERAL RESOURCE HIGHLIGHTS

- High grade silver-rich Bonanza Zone (basis for development to date) containing:

- 8.2 million (“M”) Indicated Resource tonnes at 550 grams per tonne (“g/t”) silver; and,

- 2.0 M Inferred Resource tonnes at 648 g/t silver.

- Significantly expanded Mineral Resource for the base metal-rich Deep Zone, containing:

- 4.7 M Indicated Resource tonnes with 209 g/t silver, 2.96% lead, 4.73% zinc, and 0.23% copper; and,

- 10.1 M Inferred Resource tonnes with 151 g/t silver, 2.69% lead, 5.05% zinc, and 0.31% copper.

- Consistent gold across both zones, containing:

- 12.8 M Indicated Resource tonnes at 2.10 g/t gold; and,

- 12.1 M Inferred Resource tonnes at 1.44 g/t gold.

The new 2017 PEA outlined below stems from the new Mineral Resource estimate and confirms the Juanicipio Project as a robust, high-grade, high-margin underground silver project exhibiting low development risks.  The new PEA incorporates major overall project upgrades highlighted by the delineation and provision for mining of greatly expanded Indicated and Inferred Mineral Resources in the recently discovered (2015) “Deep Zone”. The volume of these new base metal-rich Deep Zone Resources contributed to a significant expansion of project scope and enhancements to most aspects of the mine design; the most important being an increase of the planned production rate to 4,000 tonnes per day.  Within the expanded scope of the new PEA the Juanicipio Project is projected to produce a payable total of 183 million silver ounces, 750 thousand gold ounces, 1.3 billion pounds of zinc and 812 million pounds of lead over an initial 19 years of mine life. 

2017                      PEA BASE CASE HIGHLIGHTS

- 4,000 tonnes per day (“tpd”) production rate with an initial 19 years of mine life;

- Enhanced project engineering, including: new plant and tailings location on flat, open ground; underground crusher and ore conveyor system; ramp expansions and internal shaft (winze);

- Low All-In Sustaining Costs (“AISC”) of $5.02 per ounce (“oz”) of silver;

- $360 M initial capital cost from January 1, 2018 to projected production start-up in H1, 2020;

- Payback in less than two years after plant start-up;

- Pre-tax Net Present Value (“NPV”) at a 5% discount rate of $1.86 billion and an Internal Rate of Return (“IRR”) of 64.5%; and;

- After-tax NPV at a 5% discount rate of $1.14 billion and IRR of 44.5%.

“We are very pleased to see the strong positive impact of the enhanced project scope on the already remarkable economics of the Bonanza Zone,” said George Paspalas, MAG Silver President and CEO.  “The PEA considers expanding the throughput from 2,650 tpd to 4,000 tpd, a reformulated ramp system, underground crusher-conveyor system and an internal shaft for expediting extraction of the mineralization towards the base of the previously known resources together with the new Deep Zone resources. The fact that we can accomplish the scaled-up project in a short time period and for a relatively small Capex increase is testimony to the quality of the asset and the insightful experience brought to the project by our partner and project operator, Fresnillo.  With over $121 million in cash and cash equivalents as at September 30, 2017, we believe MAG is funded for its share of the development well into 2019.”

Mr. Paspalas continued, “Strong margins drive the solid economics of Juanicipio. The upside to higher metal prices is obvious, but equally important, the project even shines brightly at significantly lower metal prices: At $8/oz silver and $0.75/lb zinc, the project still delivers an after-tax IRR of 15%.”

Lastly, Mr. Paspalas noted, “The most exciting aspect to Juanicipio remains the immediate and long-term exploration upside. We know the Valdecañas Deep Zone is open in several directions and we have yet to test a number of high-potential targets for additional epithermal veins, or possible vein systems on the property.”

To view the original news release in English language, please follow the link:

http://www.magsilver.com/i/pdf/2017-11-07-nr1-mag.pdf

Information Concerning Estimates of Mineral Resources

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.

About MAG Silver Corp. (www.magsilver.com )

MAG Silver Corp. is a Canadian exploration and development company focused on becoming a top-tier primary silver mining company, by exploring and advancing high-grade, district scale, silver-dominant projects in the Americas. Our principal focus and asset is the Juanicipio Property (44%), being developed in partnership with Fresnillo Plc (56%) and is located in the Fresnillo Silver District in Mexico, the world’s premier silver mining camp.  We are presently developing the underground infrastructure on the property, under the operational expertise of our joint venture partner, Fresnillo plc, to support an expected 4,000 tonnes per day mining operation.  As well, we have an expanded exploration program in place investigating other highly prospective targets across the property. In addition, we continue to work on regaining surface access to our 100% owned Cinco de Mayo property in Mexico while we seek other high grade, district scale opportunities.

On behalf of the Board of

MAG SILVER CORP.

"George Paspalas”

Chief Executive Officer

For further information on behalf of MAG Silver Corp.

Contact Michael J. Curlook, VP Investor Relations and Communications

Website: www.magsilver.com

Phone: (604) 630-1399

Toll free: (866) 630-1399

Email: info@magsilver.com

Fax: (604) 681-0894

Swiss Resource Capital AG

Jochen Staiger

info@resource-capital.ch

www.resource-capital.ch

Neither the Toronto Stock Exchange nor the NYSE American have reviewed or accepted responsibility for the accuracy or adequacy of this press release, which has been prepared by management.

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 and applicable Canadian Securities laws. All statements in this release, other than statements of historical facts are forward looking statements, including the anticipated time and capital schedule to production;  estimated project economics, including but not limited to, mill recoveries, payable metals produced, production rates, payback time, capital and operating and other costs, IRR and mine plan; expected upside from additional exploration; expected capital requirements; and other future 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 expected mineral production performance; unexpected increases in capital costs; exploitation and exploration results; continued availability of capital and financing; differing results and recommendations in the Feasibility Study; and general economic, market or business conditions. In addition, forward-looking statements are subject to various risks, including but not limited to operational risk; political risk; currency risk; capital cost inflation risk; that data is incomplete or inaccurate; the limitations and assumptions within drilling, engineering and socio-economic studies relied upon in preparing the PEA; and market risks. 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. The Company does not undertake to provide updates to any of the forward-looking statements in this release, except as required by law.

This news release presents certain financial performance measures, including all in sustaining costs (AISC), cash cost and total cash cost that are not recognized measures under IFRS. This data may not be comparable to data presented by other silver producers. The Company believes that these generally accepted industry measures are realistic indicators of operating performance and are useful in allowing comparisons between periods. Non-GAAP financial performance measures should be considered together with other data prepared in accordance with IFRS. This news release contains non-GAAP financial performance measure information for a project under development incorporating information that will vary over time as the project is developed and mined. It is therefore not practicable to reconcile these forward-looking non-GAAP financial performance measures.

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