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Mag Silver Corp (MVG)
Recent Activities at the Cinco de Mayo Property Conference Call
November 20, 2012 12:30 pm ET
Dan MacInnis – President and Chief Executive Officer
Peter Megaw – Director
David Sadowski – Raymond James Ltd.
Michael J. Gray – Macquarie Capital Markets
John Hayes – BMO Capital Markets
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Thank you, I’ll now introduce and turn the call over to your host for today, Mr. Dan MacInnis, President and CEO; and Dr. Peter Megaw, Director of the Company and Director of Exploration. You may begin your conference.
Good morning one and all. My name is Dan MacInnis, I’m the President and CEO of MAG and I’d like to welcome everybody to this MAG Silver conference call. I’m also here today with Dr. Peter Megaw and Larry Taddei our CFO. We are here to discuss the recent events that’s related to our Cinco de Mayo property in Chihuahua State in Northern part of Mexico.
The press release from this morning provided more detail and this mornings press conference will hopefully provide some more context and correct a lot of misinformation that is also out there.
Let me begin first by stating that this event does not have any effect on our Juanicipio project. It’s the world’s highest grade and best undeveloped silver deposit on the planet today. And MAG is still forging ahead with Fresnillo to undertake an underground development program hopefully to begin in Q1 of next year. And the rest of the conference today, I will briefly review the contents of our press release, and reiterate some of several of the key parts and points that we have made and then move into a question-and-answer format.
And let me begin by stating that we reiterate that we are of the view that the November 17 assembly meeting at Benito Juarez Ejido was illegally called and was orchestrated by a small group of radical agrarian activists. This group is known as El Barzón, and they are opposed to mining and industrial agricultural development throughout the region.
We have been advised by several of local sources that many of the signatures required to call the meeting were fraudulent in nature. And other concerns have been expressed also by local community members that the vote at the meeting had many, many irregularities and including a significant number of votes that were cast through unverified proxies and there were exclusions at the door of voting members of the Ejido who were supportive of MAG's activities.
MAG in the community is one of the largest employer and we have been in the community for the last six years and have had no previous issues with the Ejido at any time. We also note that the assembly passed two resolutions, one of which is a 100 year moratorium on mining. We would like to point out that the assembly has no ability to impose a ban on mining as this is a Federal jurisdiction.
While permission is still required to obtain the surface access, I should say, we also believe that the El Barzón group and its supporters do not represent the will of the majority. We feel quite strongly that we have the community behind us and if and when this meeting is held under proper democratic and legal methodologies, they will be supportive of our proposals.
In fact, we have made many calls over the last two months to have a proper assembly instituted as well as have many of the Ejidatarios members and we need this access permission to carry out our ongoing exploration at Cinco. And it’ s quite obvious that the illegal meeting on the November 17 was an attempt by these radicals to thwart a free and open vote on our proposal, in fact our proposal were not even on the agenda, there were two self serving items that they put forward to their own cause.
As we mentioned earlier and have reported in other documents, we were in the process of negotiating an ordinary, everyday surface access permission from the Ejidatarios including the Ejido in question. In connection with this application we are required for the Soil Use Change Permit. This is required in order to keep the exploration activities ongoing. We have negotiated this over the last six years on the average about every two years, and this is the first time we’ve run into this type of disruptive behavior. And we’ve had a long and very productive relationship with the Ejido and we anticipated obtaining this permission some time in the first quarter of the coming year.
However on October 22, a member of the Ejido unfortunately and his wife were killed outside of Ciudad Cuauhtémoc in Chihuahua. After these murders, vicious rumors were propagated by people and organizations and groups sympathetic to the El Barzón cause and they alleged that somehow MAG was involved in this crime. We had on October 23, we posted a statement on our website and when the local papers in Mexico have strenuously denying any such involvement and I’ll reiterate that we were not involved in anyway in this heinous act and we extend our condolences once again to Mr. Solorio and his wife Martha. I might also add that we had many agreements with Mr. Solorio over the past few years for access rights on properties within the Ejido including that of his mother-in-law.