Understanding MAG, exceptional depth and article. Do read itGeologist Peter Megaw, one of the co-founders of MAG Silver Corp. led the geological team that found MAG's Juanicipio project, now a joint venture with Fresnillo Plc in one of the world's largest silver districts. He considers himself an explorationist who is looking for district-scale projects. "I'm not interested in finding the next stope or the next small mine," I'm interested in finding the next mining district. "You always go for quality: Grade is King. Grade is adjustable depending on your style of mining; you don't need the same grade for an open pit that you need for underground. But you also need to have size, something that's big enough to survive a long period of time," Megaw stated. "if you look at something high grade enough to make money under any market conditions and it's big enough to last two market cycles, then at the worst of times, you're surviving, and every other time, you're making money. When times are really good, you're making buckets of money. For those who are taking a long-term market perspective, you're not waiting for the price of the metal to get to the point where the project might become economic." Megaw uses what he calls Archie's Rule, named after Archie Bell, who served as vice president for exploration for Noranda Exploration Inc. "Archie's Rule is that you must be able to recover twice your all-in operating expenses for your project to make sense. That doubling obviously lets you cover your operating costs but also covers the cost of capital, amortization, depreciation, depletion and a minimum of a 15% after-tax internal rate of return. If you can't make 15% IRR after tax on your money, you should be buying lottery tickets rather than investing in a mining company," Megaw said. On MAG's Juanicipio project in Mexico, Megaw noted that "we effectively found the western half of the world's biggest primarily silver deposit. Our silver grade is better than 0.5 kilogram per ton and that's production grade. We have, according to the latest preliminary economic assessment, a minimum of 19 years of mine life. So even with the worst of the silver cycle that we've seen over the course of my career that would give you plenty of comfort and life extent for that mine. And that will be the backbone for MAG Silver for many years to come. That represents about $100 million a year in after-tax income. And there are just not that many, if any, junior companies out there that can talk about having that kind of income over that period of time." NOW THAT"S SMART THINKING! GLTA