Underground Development Program Approved At Juanicipio

VANCOUVER, BC - MAG Silver Corp. reported that the board of directors of Minera Juanicipio S.A. de C.V., (owned 44% by MAG / 56% by Fresnillo plc), has approved a mine permitting and underground development budget of US$25 million. The 18 month (2012 -2013) budget includes the first 2,500 metres of underground development. The Joint Venture has begun the permitting process and anticipates receipt of all necessary permits by the end of 2012. The underground decline ground breaking is expected in early January 2013 (Q1) pending receipt of all permits.

"We are very pleased to be working with our Joint Venture partner, Fresnillo, in realizing the underground development recommendations from our recently completed Updated Preliminary Economic Assessment ("UPEA"). The Joint Venture Board has now put the project on the priority fast track towards breaking ground in very early 2013," said Dan MacInnis, President and CEO of MAG Silver. "The UPEA confirms that Juanicipio, located in Zacatecas State, Mexico, is an extraordinary silver deposit with such robust economic margins that moving into an underground development stage is the next logical step."

The proposed program covers mine permitting, surface preparation and the commencement of the first 2,500 metres of underground decline development. The proposed work plan is based on recommendations provided to the Juanicipio Joint Venture by AMC Mining Consultants (Canada) Ltd. in their recently filed NI 43-101 Updated Preliminary Economic Assessment which outlined a development program for the Valdecanas, Desprendido and Juanicipio veins identified to date on the Juanicipio property. The development program will be managed by Fresnillo, as operators of the Joint Venture. The previously approved 2012 exploration program primarily targeted on finding other veins continues as planned.

This Juanicipio predevelopment budget is estimated at $10.0 million for 2012 with the remaining $15 million earmarked for 2013. The original 2012 exploration budget of $8.5 million remains in effect, bringing the Joint Venture total 2012 obligation to $18.5 million for which MAG's 44% share totals $8.14 million (of which $2.42 million has already been funded by MAG). The 2013 underground development plan includes the first 2,500 metres of ramp development and is projected to cost $11.9 million with another $2.3 million dedicated to further drilling, plus $1.2 million for reporting, general and other administrative expenses. MAG's 44% share of the 2013 budget is $6.6 million.

The company's address is Suite 770, 800 West Pender, Vancouver, BC V6C 2V6, 604-630-1399, fax: 604-681-0894.