VANCOUVER (miningweekly.com) – Precious metals-focused explorer MAG Silver has reported strong results from 13 exploration and infill drill holes that further extend wide, high-grade mineralisation in the deep zones of the Valdecañas vein system, on the Minera Juanicipio joint venture (JV) project, in which it holds a 44% interest.

Fresnillo owns the remaining 56%.

The campaign shows high silver grades present and significant by-product credits, further supporting the view that the project has upside at depth.

Highlight holes include 120 g/t silver (Ag), 2.46 g/t gold (Au), 5.55% lead (Pb), 5.08% zinc (Zn) and 0.21% copper (Cu) over 9.7 m (true width) from the Deep West zone (DWZ); and 333 g/t Ag, 16.87 g/t Au, 4.47% Pb, 3.77% Zn and 1.04% Cu over 5.2 m (true width) from the Deep East zone (DEZ).

MAG reported that it has nearly reached the Western Claim boundary on the DWZ with a strike length of 550 m, and has seen vein widths of 11.4 m to 26.5 m and a vertical extent of 200 m.

MAG has also identified a strike of 750 m on the DEZ, with vein widths of 5.6 m to 29.9 m and a vertical extent of 300 m; however, the company noted that this vein appears to be more irregular than in the west zone.

The Anticipada vein, which was discovered in August, is located in the hanging wall of the DEZ, with an identified strike of more than 700 m, and widths of 2 m to 12.8 m and a vertical extent of 100 m to 350 m. The highlight drill hole hit 177 g/t Ag, 7.36 g/t Au, 2.39% Pb, 6.31% Zn and 0.12% Cu in this third vein.

"We are very happy to have traced wide, high-grade mineralisation in the Valdecañas DWZ nearly to the western property boundary and see that the Anticipada vein is fleshing out to significant size. Perhaps more exciting though are the numerous high gold values we're seeing at depth, especially in the DEZ. People think of Juanicipio as a high-grade silver project and now it appears to be shaping up into a sizable gold asset as well,” stated president and CEO George Paspalas.

Meanwhile, infill drill holes confirmed high-grade mineralisation of previously reported holes. The veins remain open in several directions and there are three drill rigs on site, MAG said.

MAG’s TSX-listed stock has gained 43% since the start of the year, outpacing the 16.3% gain in the S&P/TSX Global Gold Index.

However, Desjardins Capital Markets analyst Michael Parkin believes the upside potential of these deeper zones is likely approaching “full-value territory”.

“We believe Fresnillo could announce later in the first half of the year a new scope for the project, calling for a bigger operation. This could prove to be [net asset value] accretive, but would also likely push MAG back into an underfunded position,” the analyst said in a note to clients.