Last checked at 11 May 2009 07:00
Fresnillo Plc
28 Grosvenor Street
London W1K 4QR
United Kingdom
www.fresnilloplc.com
11 May 2009
Fresnillo plc strongly rejects MAG Silver's statements in their press release
dated May 8, 2009
Fresnillo plc rejects the press release issued on 8 May by MAG Silver as well as Dan Mac Innis, CEO & Director of MAG Silver Corp. statements regarding the proposed take over offer for MAG and would like to set out the relevant facts given a number of inaccuracies contained in MAG's press release.
In January 2009, Fresnillo hosted a site visit for TD Securities and Scott Wilson Roscoe Postle and provided sufficient information to allow TD Securities to complete a proper independent valuation of MAG. Notwithstanding Fresnillo's cooperation, MAG instructed TD Securities to stop work on the valuation on February 1, 2009. Subsequently, Fresnillo and MAG met independently with the Staff of the Ontario Securities Commission to discuss what information Fresnillo should provide to TD Securities. After considering the arguments of both MAG and Fresnillo, the Staff of the Ontario Securities Commission created a comprehensive list of additional information that Fresnillo should provide, which was distributed to both parties on March 13th, and which would allow an independent professional to conclude a valuation. Fresnillo has assembled this information and agreed to provide it to TD Securities, subject to receipt of an agreed to confidentiality agreement. On April 28th, MAG's counsel informed Fresnillo that MAG viewed the Ontario Securities Commission Staff's comprehensive list as inadequate to complete a valuation.
Fresnillo notes that it is MAG who disputes the Ontario Securities Commission Staff's conclusions regarding the scope of additional information required. In order to facilitate a valuation, Fresnillo stands ready to share proprietary and confidential information to which MAG has no entitlement under the terms of its agreements with Fresnillo and which is unprecedented in the scope of a Canadian Multilateral Instrument 61-101 valuation. It is Fresnillo's belief that no amount of information would satisfy MAG, whose real agenda is to stall the valuation process and impede the offer from even reaching MAG's shareholders for their consideration.
Fresnillo has always acted in good faith both as manager / 56% owner of the Juanicipio project and as a shareholder in MAG, whilst also fully complying with all requirements of the Ontario Securities Commission. Fresnillo acknowledges receipt of the request for arbitration filed by MAG before the International Chamber of Commerce. It is Fresnillo's view that such arbitration request is without merit and, along with the press release from MAG, is further evidence of MAG's obstructive attitude in this process, aimed at preventing the offer from moving forward and being put to shareholders, and we continue to take all available legal and regulatory steps to move the process forward.
Fresnillo regrets that MAG management appears to be entrenching themselves rather than allowing MAG shareholders the opportunity to consider the offer.
For further information please visit www.fresnilloplc.com or contact:
Fresnillo plc
London Office
Octavio Alvidrez, Head of Investor Relations Tel: +44(0)20 7399 2470
Mexico City Office
Gabriela Mayor Tel: +52555 279 3203
JPMorgan Cazenove Tel: +44 (0)20 7588 2828
Andrew Wray
Brunswick Tel: +44(0)20 7404 5959
Patrick Handley
Carole Cable
About Fresnillo plc
Fresnillo Plc is the world's largest primary silver producer and Mexico's second largest gold producer, listed on the London Stock Exchange under the symbol FRES.
Fresnillo has three producing mines, all of them in Mexico - Fresnillo, Ciénega and Herradura; two advanced development projects - Saucito, Soledad & Dipolos; and three exploration prospects - San Juan, San Julian, Orysivo, as well as a number of other long term exploration prospects and, in total, has mining concessions covering approximately 1.75 million hectares in Mexico.
Fresnillo has a strong and long tradition of mining, a proven track record of mining development and reserves replacement, and a low cost of production, being in the lowest quartile of the cost curve for both silver and gold.
Fresnillo intends to maintain its position as the world's largest primary silver producer with the aim of approximately doubling production, on a silver equivalent ounce basis by 2018 and increasing its gold production.