Cautionary / Forward Looking Statements MAG Silver Corp. is a - - PowerPoint PPT Presentation

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Cautionary / Forward Looking Statements MAG Silver Corp. is a - - PowerPoint PPT Presentation

MAG: TSX / NYSE A MAGSILVER.COM June 2018 Corporate Presentation Cautionary / Forward Looking Statements MAG Silver Corp. is a Canadian issuer. This presentation is prepared by MAG Silver Corp (MAG TSX / MAG NYSE: A) management


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SLIDE 1

June 2018 Corporate Presentation

MAG: TSX / NYSE A

MAGSILVER.COM

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SLIDE 2

MAG : TSX / NYSE A

Cautionary / Forward Looking Statements

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MAG Silver Corp. is a Canadian issuer.

  • This presentation is prepared by MAG Silver Corp (“MAG – TSX / MAG – NYSE: A”) management and MAG is solely responsible for content and format.

Peter Megaw, C.P.Geo, MAG’s Chief Exploration Officer is a non-independent Qualified Person and has reviewed this presentation and its content derived from industry information and 43-101 reports and news releases with specific underlying Qualified Persons as set out in the releases and reports. Industry Information has been compiled from publicly available sources and may not be complete, up to date or reliable. Neither the TSX nor the New York Stock Exchange American has reviewed or accepted responsibility for the accuracy or adequacy of this presentation, which has been prepared by management.

  • This presentation contains forward-looking statements within the meaning of Canadian and U.S. securities laws. Such forward looking statements are

subject to risks and uncertainties which could cause actual results to differ materially from estimated results. Such risks and uncertainties include, but are not limited to: the Company’s ability to raise capital to fund development and exploration, changes in general economic conditions or financial markets, changes in metal prices, general cost increases, litigation, legislative, environmental and other judicial, regulatory, political and competitive developments in Mexico or Canada, technological and operational difficulties or inability to obtain permits encountered in connection with the Company’s exploration activities, community and labor relations matters and changes in foreign exchange rates, all of which are described in more detail in the Company’s filings with the Canadian securities regulators at www.sedar.com and the US. Securities and Exchange Commission at www.sec.gov/edgar.com There is no certainty that any forward looking statement will come to pass and investors should not place undue reliance upon forward-looking statements. MAG does not assume any obligation to update forward looking information, other than as required by applicable law.

  • Cautionary note to investors concerning estimates of Indicated and Inferred mineral resources. This document uses the terms "Indicated Mineral

Resources” and “Inferred Mineral Resources". MAG advises investors that although these terms are 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 these

  • terms. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. In

addition, "Inferred Mineral Resources" have a great amount of uncertainty as to their existence. 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 are considered too speculative geologically to have the economic considerations applied to them to enable them to be categorized as mineral reserves and, accordingly, Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, or economic studies except for a “Preliminary Economic Assessment” as defined under Canadian National Instrument 43-101.Investors are cautioned not to assume that part or all of an Inferred Mineral Resource exists, or is economically or legally mineable. Please see additional information on SEDAR and on EDGAR.

  • This presentation is for information purposes only and is not a solicitation. Please contact the Company for complete information and consult a registered

investment representative / advisor prior to making any investment decision.

  • Note to U.S. Investors: Investors are urged to consider closely the disclosure in our Form 40F, File # 001-33574, available at our office: Suite 770-800

West Pender, Vancouver BC, Canada, V6C 2V6 or from the SEC: 1(800)-SEC-0330. The Company may access safe harbor rules.

  • Investors are urged to consider closely the disclosures in MAG Silver'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

  • “AISC” means All-in sustaining costs. The projected AISC was calculated by the authors of the 2017 PEA at a cost of $5.02/Ag by summing life of mine
  • ffsite and operating costs, taxes, duties and royalties and sustaining capital, all net of by-product revenues, and dividing the resulting total by the total

payable ounces of silver projected to be produced over the life of mine. AISC is not a recognized measure under IFRS and this projected financial measure may not be comparable to AISC metrics presented by other silver producers.

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MAG : TSX / NYSE A

Juanicipio JV Decline

3

MAG : TSX / NYSE A

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MAG : TSX / NYSE A

MAG Silver

Discovery & Development

4

“High Grade” High IRR District Scale

SILVER

ZINC LEAD GOLD

in Mexico STRONG FINANCIAL POSITION

Cash

US$153M*

+

NO DEBT

*As of March 31, 2018

SIGNIFICANT EXPLORATION UPSIDE

JUANICIPIO JV

(MAG 44%)

BONANZA ZONE

145M oz Ag1 @ 550 g/t InD 41M oz Ag1 @ 648 g/t InF 848M lb Zn+Pb1 InD

DEEP ZONE

31M oz Ag1 InD, 49M oz Ag InF 790M lb Zn+Pb1 InD 1.73B lb Zn+Pb1 InF

After Tax IRR 44% 19 yr Mine Life @ 4000tpd Fresnillo Operator

  • 1. Based on 100% of Asset

InD = Indicated Resources InF = Inferred Resources See 2017 PEA

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MAG : TSX / NYSE A

MAG: TSX / NYSE A

1. March 31, 2018 2. Includes PSU, RSU & DSU’s = 723,932

CAD USD

Market Cap $1.2 Billion $1 Billion Recent $14.70 $11.50 52 wk L/H $11.71 – $17.62 $9.29 – $13.84 Daily AVG Vol 215,136 214,482

I think MAG is one of the best pure silver stories out there."

– The Gold Report Interview with John Hathaway, Tocqueville Assets Total Options2

2.9 M

Issued/Out

85.5 M

Fully Diluted

88.4 M

CASH

US$153M

1

NO DEBT

5

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MAG : TSX / NYSE A

Property Locations – A History of Discovery

6

1 2 3 4 5 6 7

Cinco de Mayo

MAG Silver/Fresnillo JV (Minera Juanicipio)

MAG Silver Success

Juanicipio Vein* 2003 Valdecañas Vein* (Bonanza Zone) 2006 Pozo Seco* 2009 Upper Manto* 2011 Pegaso (Cinco) 2012 Valdecañas Deep Zone West* 2015 Valdecañas Deep Zone East* 2016 Anticipada Vein* 2017 1 2 3 4 5 6 7 8

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MAG : TSX / NYSE A

Fresnillo Silver District – One of a Kind

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THE FRESNILLO SILVER TREND

Over 6.2 Billion oz of Silver > 10% of world historical production

2017: 38 Moz Ag

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MAG : TSX / NYSE A

Minera Juanicipio – Premier Silver District

+11 km ~7 km

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+2km Fresnillo Mine

2011: 30Moz Ag 2017: 16.5Moz Ag

Saucito I & II

2017: 21Moz Ag

Silver discoveries since 1552

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MAG : TSX / NYSE A

Valdecañas Vein Deep Zone, Dilatant Zone, Anticipada Vein

9 2,000m 1200m

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MAG : TSX / NYSE A

MAG Silver Resources

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Zone Resource Category Tonnes (Mt) Ag (g/t) Au (g/t) Pb (%) Zn (%) Cu (%) Metal Contained in Resource Ag (Moz) Au (Koz) Pb (Mlb) Zn (Mlb) Cu (Mlb) Bonanza Zone Indicated 8.2 550 1.9 1.6 3.1 0.1 145 509 294 554 14 Inferred 2.0 648 0.8 1.3 2.8 0.1 41 52 58 123 3 Deep Zone Indicated 4.7 209 2.4 3.0 4.7 0.2 31 359 304 486 24 Inferred 10.1 151 1.6 2.7 5.1 0.3 49 510 601 1,129 69 Resource Category Tonnes (Mt) Ag (g/t) Au (g/t) Pb (%) Zn (%) Cu (%) Metal Contained in Resource Ag (Moz) Au (Koz) Pb (Mlb) Zn (Mlb) Cu (Mlb) Indicated 12.8 427 2.1 2.1 3.7 0.1 176 867 598 1041 38 Inferred 12.1 232 1.4 2.5 4.7 0.3 91 562 658 1252 71

Global Resource by Classification Bonanza and Deep Zone by Classification

As per 2017 PEA

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MAG : TSX / NYSE A

Bonanza vs Deep Zones

Bonanza

  • >550 g/t Silver
  • 4.5% Zinc + Lead
  • >1.5 g/t Gold
  • 80% Indicated (8 Mt)
  • 5 m Average Width
  • 1200 m Strike Length
  • Open to Northwest?

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Deep

  • >150 g/t Silver
  • 7.5% Zinc + Lead
  • >1.5 g/t Gold
  • 70% Inferred (10 Mt)
  • >10 m Average Width
  • >1600 m Strike Length
  • Open to East and Depth
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MAG : TSX / NYSE A

Description

PEA 2012 PEA 2017

CAPEX

$302M (100%) / $132M (44%) $360M (100%) / $159M (44%)

IRR (after tax)

43% 44%

Effective Tax Rate

~28% ~36%

AISC1

N/A2 $5.02 Ag /oz

Life of Mine

15 yr+ 19 yr (initially)

Throughput

2,650 tpd 4,000 tpd

Off site costs

$39/t $41/t

On Site Operating Cost

$67/t $59/t

Silver Price

$23.39 $17.90

Valdecañas: Development Metrics

3 12

1“AISC” means All-in sustaining costs. The projected AISC was calculated by the authors of the 2017 PEA at a cost of $5.02/Ag by summing life of mine offsite and operating costs,

taxes, duties and royalties and sustaining capital, all net of by-product revenues, and dividing the resulting total by the total payable ounces of silver projected to be produced over the life of mine. AISC is not a recognized measure under IFRS and this projected financial measure may not be comparable to AISC metrics presented by other silver producers.2 not calculated in 2012 UPEA

3 calculations based on 100% of asset

As per 2017 PEA

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MAG : TSX / NYSE A

Juanicipio Development Timetable

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Total Capex $US 360M (MAG 44% = $US 159M)*

2016 2017 2018 2019 2020

Mill Procurement & Construction Initial Decline Completed

Production H1 2020

Ventilation Development Vent Fan Operating

*Source: PEA 2017

UG Access Ramp, Stope Development UG Infrastructure in progress Twin Decline

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MAG : TSX / NYSE A

Decline Twinning Progress

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Initial Decline Completed! 2nd Decline in progress

Valdecañas Vein

Portal (2,324 m elev.)

East Vein West Vein

Valdecañas Vein

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MAG : TSX / NYSE A

Mineral Processing

  • Metallurgical test work carried out between 2008 and 2015 on composites

from 67 drillholes through the Valdecañas vein system.

  • Process plant consists of a comminution circuit followed by sequential

flotation of a silver-rich lead concentrate, a zinc concentrate and a gold-rich pyrite concentrate.

  • Three year ramp up to steady-state throughput rate of 1.4Mtpa is assumed.

15

Silver Gold Lead Zinc Mill Recovery

95% 82% 93% 90%

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MAG : TSX / NYSE A

Surface Infrastructure

  • Two-lane 6.5km long sealed road for site access.
  • Power supplied from local grid to main substation.
  • Water from external sources, supplemented with

dewatering from underground workings.

  • Several locations under consideration for tailing facility.

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MAG : TSX / NYSE A

On-Site Operating Costs

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Area Cost ($/t mill feed) Mining 34.95 Processing 20.37 G & A 3.35

Total:

58.67 Metal Treatment Charges Cost ($/t mill feed) Silver refining 4% of Ag price 5.44 Gold refining $5/ounce of Au payable 0.16 Lead TCs $235(1)/dry metric tonne of concentrate 9.37 Zinc TCs $235(1)/dry metric tonne of concentrate 13.85 Transportation $115(2)/wet metric tonne of concentrate 12.50

Total:

41.32

Off-Site Operating Costs

Lead, Zinc and Pyrite concentrates

(1) Although current spot TCs for lead and zinc concentrates are approximately $50-$60/dry metric tonne (“dmt”),

rates above ($235/dmt) reflect projected long term sustainable rates.

(2) Assumes that both the lead and zinc concentrates will be treated in Asia, and assumes a moisture content of 10%

See 2017 PEA.

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MAG : TSX / NYSE A

Financial Summary and Price Sensitivity

Discount Rate (5%)

Base Case

Apples to Apples Metal Prices: 2012 Metal Prices (1) Silver ($/oz) 14.50

17.90

19.50 23.00 23.39 Gold ($/oz) 1,000

1,250

1,300 1,450 1,257 Lead ($/lb) 0.75

0.95

0.95 1.15 0.95 Zinc ($/lb) 0.75

1.00

1.05 1.20 0.91 Copper ($/lb) N/A – Copper excluded for purposes of PEA (2) Economics: 2017(3) 2012 (4) Pre-Tax NPV (M) $1,080

$1,860

$2,104 $2,776 $2,427 $1,762 After-Tax NPV (M) $635

$1,138

$1,295 $1,729 $1,503 $1,233 Pre-Tax IRR 45%

64%

71% 86% 83% 54% After-Tax IRR 30%

44%

49% 61% 58% 43% Undiscounted life of mine (“LOM”) after tax cash flow(M) $1,170

$1,995

$2,243 $2,945 $2,542 $2,162 Cash cost $/oz Ag (net of credits) (5) (0.35)

(3.94)

(4.45) (6.90) (3.11) (0.03) Total Cash cost $/oz Ag(6) 3.50

2.39

2.63 2.29 4.89 N/A(1) AISC $/oz Ag(7) 6.13

5.02

5.25 4.92 7.51 N/A(1) Payback (Years) From Plant Start up 2.6

1.8

1.6 1.2 1.2 2.1

1) Based on metal prices used in the previous 2012 Juanicipio PEA, this column has been provided in order to demonstrate the economic effect on the project given the expanded resource and enhanced project scope – and compares PEA economics. Corporate tax rate in 2012 used was 28% (with no special mining duty or gold/silver royalties). 2) Although the resource for the Deep Zone includes copper (see below), no copper circuit has been included in the PEA as no metallurgical testing and recovery assessment has yet been completed on copper. 3) See 2017 PEA 4) See Press Release June 14, 2012. Total Cash cost and AISC per oz. of silver were not calculated for the 2012 report. 5) Cash costs include all operating costs, smelter, refining and transportation charges, net of by-product (gold, lead and zinc) revenues. 6) Total cash costs include cash costs and all corporate taxes, special mining duties, and precious metals royalties. 7) “AISC” means All-in sustaining costs. The projected AISC was calculated by the authors of the 2017 PEA at a cost of $5.02/Ag by summing life of mine offsite and operating costs, taxes, duties and royalties and sustaining capital, all net of by-product revenues, and dividing the resulting total by the total payable ounces of silver projected to be produced over the life of mine. AISC is not a recognized measure under IFRS and this projected financial measure may not be comparable to AISC metrics presented by other silver producers.

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MAG : TSX / NYSE A

Juanicipio Joint Venture – Summary

HIGHEST GRADE

DEVELOPING SILVER ASSET

FINANCIAL

MINIMAL RISK

GEOPOLITICAL

MINIMAL RISK

DEVELOPMENT

MINIMAL RISK SIGNIFICANT EXPLORATION UPSIDE

INFRASTRUCTURE

HISTORICAL GREAT

METALLURGY PROPERTY ACCESS

MINIMAL RISK

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MAG : TSX / NYSE A

Valdecañas Vein

Deep Zone, Dilatant Zone & Anticipada vein

20 2,000m 1200m

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MAG : TSX / NYSE A

Valdecañas – Metal Grade Distributions

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Silver Lead Gold Zinc Copper

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MAG : TSX / NYSE A

NE-SW Structural Influence on Valdecañas

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Gold Vein Thickness

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MAG : TSX / NYSE A

Valdecañas Vein: Ore Fluid Upwelling Zone?

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SKARN

2000m

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MAG : TSX / NYSE A

Nearby Targets: Extensions of known trends

Saucito I & II

2017: 21Moz Ag

Fresnillo Mine

2011: 30Moz Ag 2017: 16.5Moz Ag

~7 km

24

+2km

FRS 2015 AR: Huizache Vein Inferred Resource 750KT @ 2.9 Au; 494 Ag; 0.06% Pb; 0.13% Zn

+11 km

Silver discoveries since 1552

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MAG : TSX / NYSE A

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Minera Juanicipio – Work Area within Claim

7km 16km

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MAG : TSX / NYSE A

Nearby Targets: Extensions of known trends

Saucito I & II

2017: 21Moz Ag

Fresnillo Mine

2011: 30Moz Ag 2017: 16.5Moz Ag

~7 km

26

+2km

FRS 2015 AR: Huizache Vein Inferred Resource 750KT @ 2.9 Au; 494 Ag; 0.06% Pb; 0.13% Zn

+11 km

Silver discoveries since 1552

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MAG : TSX / NYSE A

Regional Targets: Identified Structures

27 7km 16km

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MAG : TSX / NYSE A

Juanicipio Project – Take away points

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DEVELOPMENT

Bonanza Zone

>550 g/t Silver AISC1 $5.02 Ag/oz

4,000 tpd 19 yr Mine Life H1 2020 EVOLUTION

Deep Zone

>7.5% Zn + Pb >150 g/t Silver Copper Credit 4,000 tpd Year 6 Production EXPLORATION Deep Zone extensions NW Structures NE Structures Cesantoni 20,000m drill program

1“AISC” means All-in sustaining costs. The projected AISC was calculated by the authors of the 2017 PEA at a cost of $5.02/Ag by summing life of mine offsite and operating costs, taxes, duties and royalties and sustaining capital, all net of by-product revenues, and dividing the resulting total by the total payable ounces

  • f silver projected to be produced over the life of mine. AISC is not a recognized measure under IFRS and this projected financial measure may not be

comparable to AISC metrics presented by other silver producers.

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MAG : TSX / NYSE A

Analyst Coverage & Targets

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Firm Analyst Target (C$) ROTH Capital Partners Joe Reagor $28.49 Cormark Securities Tyron Breytenbach $26.00 Scotia Capital Trevor Turnbull $25.90 Macquarie Capital Markets Michael Gray $25.50 PI Financial Phil Ker $24.85 Rodman & Renshaw Heiko Ihle $24.60 Euro Pacific Capital Bhakti Pavani $22.66 BMO Capital Markets Ryan Thompson $22.00 TD Securities Daniel Earle $22.00 Raymond James Tara Hassan $21.00 Canaccord Genuity Kevin MacKenzie $21.00 National Bank Financial Shane Nagle $19.00 Average Target Price: $23.58

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MAG : TSX / NYSE A

Major Shareholders – Holding > 1.0M Shares

30

87%

BlackRock Investment Mgmt 16.0% Fresnillo PLC 11.4% Tocqueville Asset 8.9% Van Eck Associates 5.4% Equinox / Mason Hill 3.3% Colonial First State 3.2% Vanguard/ PM&M 3.2% First Eagle 2.8% 1832 Asset Mgmt 1.6% GAMCO / Gabelli Asset Mgmt 1.6% Sprott Asset Mgmt 1.4% Global X Mgmt 1.3% RBC Global Asset Mgmt 1.2% Franklin Advisers 1.2% Institutions <1M shares 21% Total Institutions 87% Retail & Float 13%

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MAG : TSX / NYSE A

Directors and Officers

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Directors Jonathan Rubenstein

  • Board Chairman

Peter Barnes

  • Former CEO Silver Wheaton

Richard Clark

  • Former CEO Red Back Mining

Richard Colterjohn

  • Former CEO Centario Copper

Jill Leversage

  • Former Managing Director, Highland Capital

Dan MacInnis

  • Former CEO MAG Silver

Derek White

  • Former CEO KGHM (International)

Officers George Paspalas

  • President, CEO and Director

Larry Taddei

  • Chief Financial Officer
  • Dr. Peter Megaw
  • Chief Exploration Officer

Michael Curlook

  • Vice President, Investor Relations

and Communications Jody Harris

  • Corporate Secretary
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MAG : TSX / NYSE A

MAG: TSX / NYSE A

MAGSILVER.COM