MAG Silver mobilizes drilling at Lagartos and provides exploration update

August 31, 2004 -- MAG Silver Corp. announces that it has begun a 1500 meter, Stage 1 drilling program at its Lagartos Project, 30 kilometers northwest of the Fresnillo District, Zacatecas, Mexico along the famous Fresnillo Trend. Drill targets are in areas of near-complete sediment cover flanking a rhyolite flow-dome affected by advanced argillic alteration and pervasive silicification. Drilling will test coincident NSAMT geophysical, soil geochemical, and SWIR-detected (Short-Wave Infra-Red) mineralogical anomalies.

Because MAG's Phase 1 drilling at Juanicipio, described below, cut higher gold grades than are typically encountered in the district, MAG performed an extensive re-assessment in late 2003 of the zoning of the Fresnillo system. This interpretation led to the conclusion that the known part of the Fresnillo District may be only a small portion of a mega-district. The Lagartos NW and SE Claims were filed to cover the ground along a major regional structure that links the billion-ounce Zacatecas and Fresnillo districts (See Press Release of January 21, 2004). MAG's NW Lagartos claims, which are the focus of the drilling announced today, cover a nearly contiguous area of ground stretching 30 kilometres on trend from the site of its previous high grade drill interceptions at Juanicipio. Although much of this ground is sediment covered, MAG is currently applying the exploration tools it developed and successfully used at Juanicipio to test a series of regional targets developed over the last year in the Lagartos Claims. Those tools include NSAMT geophysics, which have yielded similar signatures in the NW Lagartos claims over 23 kilometres along trend, to those that identified the structures at Juanicipio and helped pinpoint the successful drilling in 2003.

The drill campaign at Lagartos forms a part of the $2,000,000 exploration program for 2004 previously approved by the MAG board of directors, which will also include drilling later in the fall at the Batopilas project.

Exploration Update

MAG is also pleased to provide below an update on activity on each of its six projects in Mexico. Since inception in 2003, MAG has maintained a focus on projects in proven silver districts with potential in any conceivable silver-gold market.

Juanicipio Project, Zacatecas District, Mexico: The planned 1500 metre Phase 2 drilling program at Juanicipio has been completed and assays are pending. MAG's Phase 1 drilling verified that the mineralization common in the adjacent Fresnillo Mine continues into Juanicipio from the historic mining areas on at least four structures. Phase 2 targeted a structural intersection 800 metres west of the zone of Phase 1 intercepts including a structure not reached in Phase 1 due to drilling problems. No offset drilling of mineralized veins cut in Phase 1 was included in phase 2. MAG believes the extent of the results in Phase 1, undertaken in 2003, provide substantial proof of its exploration concept.

Don Fippi Project, Batopilas District, Chihuahua: An orientation underground and surface-based NSAMT and 3-axis UTM survey to seek conductive Batopilas-style native silver mineralization has been completed. Results are presently being combined with detailed geologic studies, and with a number of coincident structural and geophysical anomalies already identified for drilling. The permitting process has been initiated to begin Phase 1 drilling in late October.

Sierra Ramirez Property, Durango State: Reconnaissance examination of the Sierra Ramirez district was initiated in early May. Exploration is focusing on determining the overall mineralization controls and zoning to define targets for drilling in the fourth quarter of 2004 or first quarter of 2005. To this end, samples have been taken from over 200 old mines, prospects, and mineralized outcrops to evaluate district-scale metals ratio zoning patterns. Assay results show a wide range of metals values across the district and the geographic ratio patterns are currently being evaluated. Table 1 below shows a selection of sampling results that strongly confirm the historic production values reported from the district and reflect the high grades anticipated in target mineralization in the district.

Adargas District, Jimenez, Chihuahua: Drilling of a 4-hole, 1600 metre program to follow a chimney orebody to depth below historic high-grade oxide stopes has been completed and assays received. Strong skarn and associated galena-sphalerite-pyrite dominated massive sulfide mineralization were cut in the first 2 holes and strong skarn, with minor sulfides was cut in the last 2 holes. Down-hole UTM geophysics indicates a conductive anomaly off the first two holes. Despite the presence of strong skarn and sulfide mineralization with good Pb and Zn values (the best intercept was 1.2 metre grading 300 ppb Au, 55 ppm Ag, 9.0% Pb and 5.8% Zn), the silver values are significantly lower than historic production records and underground sampling indicate are present in the system. [Pre-1924 production from Adargas was approximately 350,000 T of oxide ores grading 9-27 g/T (.25-.9 oz/T) Au, 1000 g/T (34 oz/T) Ag, and 24-36% Pb].

Cinco de Mayo Project, Benito Juarez District, Chihuahua State: Existing detailed geologic mapping and geochemical sampling are being used to guide design of a geophysical survey over covered areas adjoining outcropping mineralization. The immediate goal is to develop targets for drilling in the fourth quarter of 2004.

Guigui Project, Santa Eulalia District, Chihuahua: In light of the re-opening of the San Antonio Mine in the eastern part of the Santa Eulalia District by Grupo Mexico (Mexico's largest mining company), MAG is reexamining the results of its Phase 1 drill holes placed 1200 metres south of the mine along the same mineralized structure. MAG completed Phase 1 drilling in early 2004 and followed with a 3-Axis Bore-Hole UTM survey. Holes 5 and 6 both cut 40-100 metre-wide breccias laced with Ag-Pb-Zn sulfide stringers and the BHUTM survey indicated a conductive anomaly adjacent to the drill holes. Table 2 presents selected assay results recently returned for Holes 5 and 6.