MAG Silver Corp. (TSX:MAG)(NYSE MKT:MAG) ("MAG" or the "Company") has previously reported on exploration results and a new deep discovery beneath the Valdecañas Bonanza Grade Vein System on the Minera Juanicipio joint venture property (Fresnillo plc 56%; MAG 44% - see Press Releases of February 14th 2017, August 15, 2016, and April 23rd 2015).
The results from these three drilling campaigns have: confirmed that continuous mineralization extends below the Valdecañas Bonanza Grade mineralization; revealed a substantial widening of this deeper mineralization into a well-defined dilatant zone; and, resulted in the discovery of the new "Anticipada Vein", within the vein system. A new resource estimate incorporating the drilling results from these programs is in progress and is expected to be completed in the second quarter of 2017.
Given the potential size of these additional mineralized zones, the Joint Venture partners, led by JV Operator Fresnillo plc, have been considering project design enhancements to maximize the value of both the Bonanza Zone and the new deeper zone. Considerations include increasing the processing plant nameplate capacity from 2,650 tonnes per day to 4,000 tonnes per day and sinking an internal shaft (or winze) to access the deeper zone sooner. The changes in design scope could result in an incremental increase in the project capital cost and slide the anticipated project start-up from the second half of 2018 to the first half of 2019. Fresnillo plc, has indicated that permitting based on the upgraded design has already commenced, and that they expect their Board to give formal project approval in the next 3 to 4 months.
The new resource estimate and these design upgrades will be incorporated into a revised mine plan and a new MAG technical report for the project, expected to be completed in the second quarter of 2017 concurrent with the project approval.
Expected to be approved at the next JV Technical Committee meeting, Fresnillo plc has also reported a 20,000-metre exploration drill program for 2017.