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Canasil Reports on MAG Silver Update on La Esperanza Silver Project ZTEM Airborne Geophysics and Surface Work Define High Priority Drill Targets

Vancouver, August 10 2011 – Canasil Resources Inc. (Canasil, TSX-V: CLZ, DB Frankfurt: 3CC) is pleased to report on an update recently received from MAG Silver Corp. (MAG, TSX: MAG, NYSE.A: MVG) on exploration work completed on the La Esperanza silver-lead-zinc project in Durango and Zacatecas States, Mexico.  MAG is earning a 60% interest in the property from Canasil under an option agreement dated August 19, 2010. Expenditures on the project reported by MAG up to March 31, 2011, were $500,646.

In October 2010 a 1,330 line-kilometre ZTEM Airborne Geophysical survey was completed on behalf of MAG covering over 250 square kilometers over the La Esperanza area which was successful in highlighting several geophysical anomalies associated with known mineralization and significant geological features.

MAG also conducted geological mapping and surface rock and stream sediment sampling focused on four known vein systems that have been traced over variable strike lengths ranging from 300 metres to over 1.9 kilometres. In anticipation of the 2011 diamond drill program MAG has also completed upgrades to over 30 kilometres of access roads within the project area.

Correlation of the structural features highlighted by the ZTEM survey and the aero-magnetic signature, coupled with the mineralized veins and structural lineaments outlined by the mapping and sampling and previous drilling by Canasil, has defined a number of high priority drill targets. MAG is currently evaluating the logistics for starting a drill program to test these targets within the next 4 - 6 weeks.

Details from MAG’s Report:

A 277 square kilometre block was flown in late 2010 using the Geotech Ltd. ZTEM Airborne Survey System consisting of a helicopter borne AFMAG Z-Axis Tipper Electromagnetic (ZTEM) system and aeromagnetics.  A total of 1,330 line kilometres of geophysical data were acquired during the survey. The block was flown at an Azimuth of N50E with a flight lines spacing of 200 metres.  Final results were received in late February 2011 and were integrated with previous and ongoing field results. Reconnaissance mapping to trace connections between the known vein segments is progressing, as is drill permitting for the targets identified through the field work and the airborne geophysical survey.

The geological mapping and surface sampling program was carried out by MAG’s exploration team based in Zacatecas, Mexico, and included collection of 325 rock samples and 134 stream sediment samples. Four anomalous areas of silver, lead and zinc were identified including the La Esperanza vein zone and its extensions. All four zones are coincident with significant magnetic and or ZTEM anomalies. Other similar ZTEM anomalies will be prospected, mapped and sampled as the field work continues.

Interpretation of the ZTEM data and compilation with the geological mapping and results from the surface samples was undertaken by Ken Robertson, P. Geo., Manager of Geotechnical Services for MAG.

About La Esperanza:

The La Esperanza project covers 18,954 hectares, located within the Mexican Silver Belt in northern Zacatecas and southern Durango States. This recognized world class silver belt hosts a number of active mines such as Pan American Silver’s La Colorada and First Majestic Silver’s La Parrilla mines. The La Esperanza project covers poorly explored multiple vein occurrences and alteration zones over a 20 kilometre strike length along a prospective SE-NW trend.

The property hosts quartz breccia epithermal veins with silver, lead and zinc mineralization associated with argentiferous galena, silver sulfosalts and sphalerite. The La Esperanza Vein has been traced by mapping of the collapsed workings over a strike length of 260 metres. Significant alteration zones are observed along strike extensions of this vein for over five kilometres on a northwest-southeast trend. Additional vein outcrops and mineralized structures are also observed to the northwest of the extended claim area at the “Fatima” vein zone, approximately 15 kilometres northwest of the La Esperanza vein, indicating the potential for a large district scale epithermal system.

Canasil previously drilled nine diamond drill holes on the La Esperanza vein outcrop for a total of 1,432 metres. This program has outlined a mineralized panel with a strike length of over 150 metres and depth of 100 metres, which is open in all directions, with vein widths of up to 10.30 metres carrying high grade silver mineralization. Seven drill holes intersected the main vein and a hanging wall vein over significant widths The weighted average grade of mineralization intersected in the La Esperanza vein is 330 g/t (9.62 opt) silver, 0.93% zinc and 1.57% lead over an average width of 4.21 metres.

Under the option agreement, MAG can earn 60% interest in the La Esperanza project by completing CAD$5,000,000 exploration expenditures and CAD$500,000 cash payments to Canasil over a period of four years, including a first year expenditure commitment of CAD$750,000 with a minimum of 1,500 metres of drilling.

About MAG Silver and Canasil:

MAG is a leading silver exploration and emerging development company in Mexico, with considerable experience and a very successful track record of high-grade silver discoveries in epithermal vein systems of the Fresnillo Silver Trend, as well as a number of other large  development stage and exploration projects in Mexico.

Canasil is a Canadian mineral exploration company with interests in precious and base metal projects in Durango, Sinaloa and Zacatecas States, Mexico, and in British Columbia, Canada. The Company’s directors and management include industry professionals with a track record of identifying and advancing successful mineral exploration projects. The Company is actively engaged in the exploration of its mineral properties.

For further information please contact:

Bahman Yamini
President and C.E.O.
Canasil Resources Inc.
Tel: (604) 709-0109

www.canasil.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

 

La Esperanza Project 2011 High Priority Drill Targets Defined by MAG Silver: