MAG SILVER CORP. T.MAG

Unico 2009

[HillsboroughMan]

2) Deer Trail Mountain Porphyry System -- There is deep potential for a large Cu-Au or Mo Porphyry System on the property(5,9 & 15). The dominant metal within the Deer Trail Mountain intrusive is nebulous but alteration patterns and structural features clearly indicate the presence of a large porphyry system. An over 2,600 foot DDH in Noranda’s 1983 program failed to reach the target. However, the metasomatic mineral assemblages at the low angle (-26 degrees) hole’s terminus suggest that it was within 3,000 feet of the porphyry body(9). In consequence of the precipitous drop in molybdenum and other base metal prices in 1983, combined with resultant drastic reduction in exploration budgets, Noranda abandoned its exploration project at the Deer Trail Mine. Molybdenum prices following another steep decline in 2008 from historic highs have now recovered much of their value and Mo Porphyries are projected to once again become attractive exploration and development targets. Even a small Rico (Silver Creek), Colorado-sized deposit (40M tons at 0.310% Mo) possesses a gross value of $4.2 billion at current prices ($17/lb Mo)(14). A state-of-the art induced polarization (IP) or controlled-source audio-frequency magneto-telluric (CSAMT) survey followed by one 3,500 to 5,000 foot DDH would be necessary to begin testing the system.