Mag Silver Corporation (MVG)

MVG 
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MAG Silver Corp. (MVG)

The Wall Street Analyst Forum Call Transcript

November 19, 2008, 10:30 am ET

Executives

Helen Baud – Host, The Wall Street Analyst Forum

Pete Megaw – Co-Founder and Director

Presentation

Helen Baud

Good morning, ladies and gentlemen. My name is Helen Baud with the Wall Street Analyst Forum and I’m your host in this room for today. At this time I would ask anyone with any cell phone, pagers, or other handheld devices to please either turn them off or to the silent position so as to disturb the presentations. Next company presenting today is MAG Silver Corporation.

MAG is a leading exploration company working the Mexican Silver Belt. The high-grade discoveries in Juanicipio property are helping transform the Fresnillo Trend, the world’s oldest and most prolific silver district. Work with partner Fresnillo plc, 56%, is defining a world-class mineral resource, key to the next generation production by the world’s largest silver miner.

MAG also wholly owns over 100 square miles of protected grounds [ph] around Mexico, including the second largest free-holding in the Fresnillo Trend as well as the Cinco de Mayo CRD property in Chihuahua Trough where early drill results indicated significant new silver/lead/zinc discovery in the making. Presenting for us today for MAG Silver is Pete Megaw who is the Co-Founder.

Pete Megaw

Thank you, and good morning. It’s a pleasure as always to be able to tell the MAG story. As always, I have to start off with the fine print, the Safe Harbor forward-looking statements disclaimer. MAG Silver is exploring for silver in Mexico. Mexico is the finest and highest grade feature real estate in the world for silver. Over 25% of all the silver ever produced in human history has come from Mexico.

MAG Silver uses modern geologic models and science to drive district scale exploration for high-grade mineralization. That’s especially important in today’s environment, because with a significant discovery, the kind of thing we are looking for has the grade to get you through times when metal prices are low as we are seeing now and it has the size to carry you through several market cycles. So what we look for is something that will make several market cycles at whatever the lowest imaginable silver price would happen to be, those are the kinds of things we are looking for. And very fortunately, that’s what we have managed to find.

The Valdecañas Vein, which is in joint venture with Fresnillo plc, the world’s largest silver producer, has been shown to have an inferred resource of 238 million ounces of silver. MAG’s share of that is 104 million ounces. And that has had a grade of over a kilogram, over 30 ounces per ton silver. We also have a significant silver/lead/zinc discovery at Cinco de Mayo. We’ve had exploration success at Batopilas. And we are currently drilling at our Lagartos Southeast and Lorena projects. Ours is a land package assembled over a 15-year period, largely during times when people didn’t want the properties. We were able to acquire these properties at very low cost. Therefore our holding costs are very low, with one exception all of our properties are held outright by MAG. So our exploration is driven by result. It’s not driven by the deals that we have on our properties.

A quick rundown of our 52-week high or low. Our high was $16.40. Our low was $3.12. Recently we’ve been at around $4.50, between $4.50 and $5.00. We are up slightly this morning, thanks to a press release that went out on the Valdecañas Vein, which I will mention again in a minute. Issued an outstanding 48 million and change for 0.4 million options, leaving us fully diluted at about 51 million shares. We were very fortunate to do a significant financing around a year ago at $15.50, so our war chest [ph] is pretty well topped off. We’ve got $60 million in the bank.

Who are our major shareholders? Our largest shareholder is Fresnillo plc, our partner in the d Juanicipio joint venture. Over the last month, they have gone from having 4.5% to 19.8% of our company. They claim in their filings that this is for investment purposes. That’s as much as we know, but the management of MAG has formed – the Board has formed a special committee to consider what it means when your partner buys almost a fifth of your company and evaluate all of the various possibilities that could result from something like that. Sprott Asset has 8.3%. And you can see there is a number of other large holders, including management having a significant percentage of the corporation.

Who is our management team? People with long experience in the mining exploration and development business and importantly people who have lot of experience with mergers and acquisitions and takeovers; Jonathan Rubenstein, Richard Colterjohn, and Derek White, especially. You will notice some of these names. Jonathan was associated with Canico, Sutton, and most recently Aurelian.

We are covered by four analysts at major houses; George Albino with Macquarie, Andrew Kaip at Haywood, Bart Jaworski of Raymond James, and John Hayes at BMO. Several of these people have been following us for several years before we made our major discoveries.

Where are our properties located? Our largest – our biggest property holdings are here in the Fresnillo Trend, down here in Central Mexico. This is not remote treasure as the Sierra Madre kind of territory. This is an hour’s drive on paved highways from a major international airport to most of these project areas. And we have Cinco de Mayo DD [ph] and Sierra Ramirez, which are in the high plains of Northern Mexico, also within very short drives of major international airports and cities. So the infrastructure is very good. Again, we picked a district scale property holdings in all of these districts and that’s what we are exploring, Combination of veins here and what are called carbonate replacement deposits over here. Carbonate replacement deposits are the backbone of the Mexican underground base and precious metals mining business.

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