Mr. Michael Curlook reports

MAG SILVER REPORTS FIRST QUARTER FINANCIAL RESULTS

Mag Silver Corp. has released its unaudited financial results for the three months ended March 31, 2023. For details of the unaudited condensed interim consolidated financial statements and management's discussion and analysis for the three months ended march 31, 2023, please see the company's filings on SEDAR or on EDGAR.

All amounts herein are reported in thousands of United States dollars unless otherwise specified.

Key highlights (on a 100-per-cent basis unless otherwise noted):

• Concentrate production at the high-grade Juanicipio mine has commenced. Juanicipio shipped its first commercial lead and zinc concentrates in late March, 2023, and regular shipments are planned going forward.
• During March, 2023, milling rates at Juanicipio were around 60 per cent of design, delivering an average of 2,476 tonnes per day (tpd) with rates periodically reaching up to 3,900 tpd.
• Performance during April has improved with the comminution circuit consistently delivering rates of 3,700 tpd, as well as a decrease in unplanned stoppages. As the plant approaches design capacity, higher-grade mill feed has been introduced with a commensurate improvement in silver recovery rates and concentrate grades.
• Over the course of Q1 2023, lower-grade material that was earmarked for commissioning activities was processed through the Juanicipio plant with recovery rates averaging 84 per cent for silver, slightly above expectations for this stage of the commissioning.
• Mag reported net income of $4,713, or five cents, per share for the three months ended March 31, 2023 ($2,680, or three cents per share, for the three months ended March 31, 2022).
• Discovery of the Carissa zone found in aggressive stepouts drilled one kilometre (km) to the southwest of the Deer Trail mine corridor.
• Closed two bought deal financings during Q1 2023: a $42,558 public offering of common shares on Feb. 7, 2023, and a $17,133 ($23,024 (Canadian)) private placement of common shares on Feb. 16, 2023, on a flow-through basis.

Operational (on a 100-per-cent basis unless otherwise noted):

• The beneficiation plant at the Juanicipio project, which was recently energized following connection to the national power grid in December, 2022, continued commissioning and full-scale ramp-up of milling activities. As reported by the operator, Fresnillo, the operation remains on track to reach nameplate production mid-to-late 2023. During this ramp-up period, excess mineralized material from the Juanicipio project continues to be processed through the nearby Saucito and Fresnillo beneficiation plants (100 per cent owned by Fresnillo) on an available capacity basis.
• For the three months ended March 31, 2023:
  • The company processed 222,023 tonnes of mineralized stope material and low-grade commissioning stockpiles through the Juanicipio, Fresnillo and Saucito plants, with 2,000,974 payable silver ounces, 5,291 payable gold ounces, 1,281 payable lead tonnes and 1,656 payable zinc tonnes produced and sold.
  • Average silver head grade for the quarter was 363 grams per tonne (g/t).
  • Precommercial production revenue (net of treatment and processing costs) totalled $51,482 for the quarter, less $27,378 in production and transportation costs and $7,955 in depreciation and amortization charges, netting $16,149 in gross profit by Juanicipio.
• At the end of the quarter, Juanicipio held 167 tonnes of lead concentrate and 715 tonnes of zinc concentrate in inventory.
• At the end of the quarter, Juanicipio held cash balances of $8,454, up from $1,102 at the end of 2022, mainly as a result of a $56,800 cash injection from the partners ($24,992 for Mag's 44-per-cent share) to extinguish substantial tax and mining duty obligations in Mexico. In addition, cash balances at Juanicipio were further offset by continued capital expenditures, lower milled grades, additional ramp-up working capital requirements and continuing underground development expenditures, which were partially mitigated by higher metal prices.

Corporate:

• The company is progressing its second annual sustainability report. The 2022 sustainability report will reinforce the company's environmental, social and governance (ESG) commitments and provide updates to the company's ESG practices and performance for the 2022 year. In October, 2022, Mag submitted its inaugural sustainability report for the 2021 year and its communication on progress (CoP) to the United Nations Global Compact (UNGC) and is completing the subsequent CoP for 2022 to reaffirm its commitment to the 10 Principles of the UNGC. Mag's 2021 sustainability report is available on the company's website.
• Several policies and charters, including the Human Rights, Diversity, Equity and Inclusion, Enterprise Risk Management, Health, Safety, Environment and Social Responsibility policies, and Health, Safety, Environment and Community Charter were updated and are available on the company's website.
• The company closed a $42,558 bought deal public offering on Feb. 7, 2023, and issued 2,905,000 common shares, at a price of $14.65 per common share. Additionally, the company closed a $17,133 ($23,024 (Canadian)) bought deal private placement on Feb. 16, 2023, and issued 969,450 common shares on a flow-through basis (as defined in the Income Tax Act (Canada)), at a price of $17.67 ($23.75 (Canadian)) per flow-through share.
• On April 29, 2023, the Mexican Senate approved material amendments to the Federal Mining Law, which amendments are subject to the final approval of Mexico's federal executive branch. The company is facilitating a thorough review and evaluation of potential outcomes and their implications specifically concerning its 44-per-cent interest in Juanicipio, including the treatment of concessions issued under previous legislation.

Exploration:

• Juanicipio project, Mexico:
  • Results from the 2022 exploration program at the Juanicipio project completed in December, 2022, and totalling 25,858 metres are pending.
  • Infill drilling at Juanicipio continued in Q1 2023 with 4,109 metres drilled, for which assay results are also pending. There are currently three rigs turning with the goal of continuing to test the Valdecanas vein system at depth and further increase the confidence of the Deep zone resource.
• Deer Trail project, Utah:
  • Results from six of nine completed holes (12,157 metres total) in surface-based phase 2 drilling on the Deer Trail carbonate replacement deposit (CRD) project were reported on Jan. 17, 2023, with the most notable highlight being discovery of the Carissa zone.
  • The overall results continue to reinforce Mag's CRD exploration model and suggest multiple mineralization channel ways extend from the inferred Deer Trail Mountain porphyry centre. Multiple fluid channel ways are a characteristic of many major CRD systems.
  • Assays are pending for completed holes DT22-11, 12 and 13. DT22-13 was drilled 1.7 km southeast of the Carissa zone testing a strong geophysical anomaly coincident with the intersection of two major structures.
• Larder project, Ontario:
  • In 2022, Mag initiated a comprehensive data review and drilling campaign on the Larder project. The drilling program focused below and lateral to potential mineralization shoots.
  • In total, 10 holes (10,484 metres) were drilled in 2022 by the company at the Cadillac Larder Break East zone of the project. The drilling campaign has proven the geological units exist at depth and has allowed for the acquisition of structural data at depths never recorded in the history of the project. Assay results extended the Bear East mineralization down to a depth of 600 metres from surface.
  • Drilling continued in January, 2023, in the Swansea area on the west side of the property. These holes tested a geophysical anomaly coincident with the Larder Break. All holes reached the target structure intercepting up to 50 m of pervasive sericite plus/minus fuchsite/carbonate alteration and silicification within the targeted structure. Assays are pending.

Juanicipio project update

Underground mine production

With the Juanicipio plant now in the ramp-up phase, excess mineralized material from the Juanicipio project continues to be campaign processed, subject to capacity availability, at the nearby Saucito and Fresnillo plants (both 100 per cent owned by Fresnillo). Metals are refined and sold on commercial terms under long-term offtake agreements with an affiliate of Fresnillo.

In the three months ended March 31, 2023, a total of 222,023 tonnes of mineralized development and stope material were processed through the Juanicipio, Saucito and Fresnillo plants. The resulting payable metals sold and associated processing details are summarized in an attached table. The sales and treatment charges for tonnes processed in Q1 2023 were recorded on a provisional basis and will be adjusted in the second quarter of 2023 based on final assay and pricing adjustments in accordance with the offtake contracts.

The average silver head grade for the mineralized development and stope material processed in the three months ended March 31, 2023, was 363 g/t (three months ended March 31, 2022: 597 g/t). The lower head grade was a direct result of the processing of lower-grade stockpiles which were earmarked for the commissioning of the Juanicipio processing facility. Mining operations continue to perform as planned and will ramp up high-grade feed as the Juanicipio plant approaches commercial production and recovery rates are in line with design. Over the course of Q1 2023, the Juanicipio plant delivered recovery rates averaging 84 per cent for silver, slightly above expectations at this stage of the commissioning.

Processing plant construction and outlook

Commissioning commenced in early January, 2023, with feed of lower grade mineralized material to the grinding mills. Juanicipio produced and shipped its first commercial lead and zinc concentrates in March, 2023, and has commenced regular concentrate shipments. Processing of higher-grade material has commenced in April with commensurate improvements in silver recovery and associated concentrate grades.

With the plant now in the commissioning and ramp-up phase, final project capital costs are winding down as Juanicipio approaches full commercial production. Additional financing requirements related to market conditions, delayed ramp-up to nameplate capacity, tax payments or additional sustaining capital in excess of the operating cash flow generated are expected to be financed by further cash calls required from Fresnillo and Mag.

Financial results -- three months ended March 31, 2023

As at March 31, 2023, Mag had working capital of $53,998 (Dec. 31, 2022: $29,232), including cash of $54,613 (Dec. 31, 2022: $29,955) and no long-term debt. As well, as at March 31, 2023, Juanicipio had a working capital of $48,351, including cash of $8,454 (Mag's attributable share is 44 per cent).

The company's net income for the three months ended March 31, 2023, amounted to $4,713 (March 31, 2022: $2,680), or five cents per share (March 31, 2022: three cents per share). Mag recorded its 44-per-cent income from equity accounted investment in Juanicipio of $7,919 (March 31, 2022: $13,762), which included Mag's 44-per-cent share of net income from the sale of preproduction development and stope material, as well as loan interest earned on loans advanced to Juanicipio.

Qualified person: All scientific or technical information in this press release, including assay results referred to, and mineral resource estimates, if applicable, is based upon information prepared by or under the supervision of, or has been approved by Dr. Peter Megaw, PhD, CPG, a certified professional geologist who is a qualified person for purposes of National Instrument 43-101 (Standards of Disclosure for Mineral Projects). Dr. Megaw is not independent as he is an officer and a paid consultant of Mag.

About Mag Silver Corp.

Mag Silver is a growth-oriented Canadian development and exploration company focused on becoming a top-tier primary silver mining company by exploring and advancing high-grade, district-scale, precious metals projects in the Americas. Its principal focus and asset is the 4,000-tonne-per-day Juanicipio project (44 per cent), operated by Fresnillo (56 per cent). The project is located in the Fresnillo silver trend in Mexico, the world's premier silver mining camp, where, in addition to underground mine production and processing of mineralized material, an expanded exploration program is in place targeting multiple highly prospective targets. Mag is also executing multiphase exploration programs at the Deer Trail 100-per-cent earn-in project in Utah and the Larder Lake project, located in the historically prolific Abitibi region of Canada.

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