UPDATE 1-MAG Silver Mexico mine study indicates higher resources

Wed Dec 1, 2010 11:24am EST

* Indicated silver up by 27 mln ounces

* Indicated gold up by about 111,000 ounces

* Shares up as much as 5 percent; touch 2-yr high

Dec 1 (Reuters) - Metal explorer MAG Silver Corp (MAG.TO) reported 77 percent higher indicated resources at its jointly-owned mine is Mexico, driving the company's shares to their highest in more than two years.

The Mexico-focussed company said a study ended September indicated the Juanicipio property has 110.8 million ounces of silver, which is about 27 million ounces higher than the previous result.

Indicated gold at the property now stands at 321,300 ounces, compared with about 210,000 ounces estimated by the previous study in March 2009.

MAG silver said the total indicated resource was 5.2 million tons, compared with 2.95 million tons indicated earlier.

The Juanicipio property is owned and operated by Minera Juanicipio S.A. de C.V, a joint venture where Fresnillo plc holds 56 percent and MAG Silver holds 44 percent.

The Vancouver-based company's shares, which have nearly doubled in value year-to-date, were up about 2 percent at C$11.65 in Wednesday morning trade on the Toronto Stock Exchange. They touched a high of C$12.10 earlier in the session. (Reporting by Aftab Ahmed in Bangalore; Editing by Roshni Menon) (aftab.ahmed@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: aftab.ahmed.reuters.com@reuters.net))

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