MAG Silver Corp. [MAG-TSX; MVG-NYSE MKT] on Tuesday announced the results from a 2019 drilling program on the Juanicipio gold joint venture in Mexico.
The program, which consisted of 33,864 metres of diamond drilling in 28 holes, expanded and upgraded the wide, high-grade Deep Zone and confirmed additional north-east trending veins, the company said in a press release.
MAG Silver shares advanced on the news, rising 2.4% or 30 cents to $12.57 on volume of 400,321. The shares are currently trading in a 52-week range of $11.20 and $18.61.
MAG Silver is focused on the acquisition, exploration and development of mineral properties, primarily silver, within the Americas. Its flagship asset is a 44% interest the Juanicipio property, where underground infrastructure is being developed to support a mining operation. Â The high-grade gold project is located in the Fresnillo District, Zacatecas State.
MAG and joint venture partner Fresnillo Plc. aim to start initial production in June 2020, with ore to be processed at the Fresnillo plant until the 4,000 tonnes-per-day Juanicipio plant is commissioned in mid-2021.
MAG also has a 100% of the mineral concessions on the Cinco de Mayo property, also in Mexico, which consists of four major mineralized zones.
The Juanicipio property consists of high-grade silver-gold-lead-zinc epithermal vein deposits.Â The primary vein, the Valdecanas Vein, is an echelon system comprised of overlapping East and West veins and several smaller vein splays.
Fresnillo is the operator at Juanicipio and holds a 56% majority stake in the joint venture. Total annual anticipated production is expected to be 11.7 million ounces of silver and 43,500 ounces of gold, with an initial life of mine (based on indicated resources) of 12 years.
Over 25 kilometres of underground development has been completed so far on the project. Based on detailed engineering, actual equipment purchases and construction contracts, pre-operative capital expenditures, from January 1, 2018, has increased by 11.4% from US$395 million to US$440 million. The increase also reflects spending on underground development, supportive infrastructure, and the bringing forward of sustaining capital to facilitate the early underground start.
On Tuesday, MAG said continued in-fill and exploration on other targets is ongoing in 2020, with four surface rigs running concurrently with mine development and construction. It said the discovery of more northeast-trending veins close to the planned production areas, coupled with the expanding high-grade Anticipada and Pre-Anticipada veins, should add significantly to the growing mineral endowment of the project and, importantly, provide considerable mining flexibility throughout an extended mine life.
The search for additional mineralizing fluid upwelling zones within the Juanicipio Joint Venture property is ongoing as each could be a centre of additional high-grade mineralization, the company said.