form40f.htm
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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
40-F
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[Check
one]
o REGISTRATION
STATEMENT PURSUANT TO SECTION 12 OF THESECURITIES EXCHANGE ACT OF
1934
OR
x ANNUAL REPORT
PURSUANT TO SECTION 13(a) OR 15(d) OF THESECURITIES EXCHANGE ACT OF
1934
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For
the fiscal year ended December
31, 2007
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Commission
File Number 001-33574
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MAG
SILVER CORP.
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(Exact
name of Registrant as specified in its charter)
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Not
Applicable
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(Translation
of Registrant's name into English (if applicable))
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BRITISH
COLUMBIA
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(Province
or other jurisdiction of incorporation or organization)
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1040
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(Primary
Standard Industrial Classification Code Number (if
applicable))
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Not
Applicable
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(I.R.S.
Employer Identification Number (if applicable))
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#328
– 550 BURRARD STREET, VANCOUVER, BC V6C 2B5 Tel:
604-630-1399
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(Address
and telephone number of Registrant's principal executive
offices)
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John
L. Mericle, Harris, Mericle & Wakayama, 999 Third Avenue, Suite 3210,
Seattle, Washington 98104, Tel: 206-621-1818
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(Name,
address (including zip code) and telephone number (including area
code)
Of
agent for service in the United
States)
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Securities
registered or to be registered pursuant to Section 12(b) of the
Act.
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Title
of each class
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Name
of each exchange on which registered
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Common
Shares, without par value
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American
Stock Exchange
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Securities
registered or to be registered pursuant to Section 12(g) of the
Act.
Securities
for which there is a reporting obligation pursuant to Section 15(d) of the
Act.
For
annual reports, indicate by check mark the information filed with this
Form:
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x Annual
information form
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x Audited
annual financial statements
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Indicate
the number of outstanding shares of each of the Registrant’s classes of capital
or common stock as of the close of the period covered by the annual
report. 46,954,196 outstanding shares of the Registrant’s
common stock as of the fiscal year ended December 31, 2007.
Indicate
by check mark whether the Registrant by filing the information contained in this
Form is also thereby furnishing the information to the Commission pursuant to
Rule 12g3-2(b) under the Securities Exchange Act of 1934 (the “Exchange Act”).
If”Yes” is marked, indicate the file number assigned to the Registrant in
connection with such Rule.
Indicate
by check mark whether the Registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the
Exchange Act during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
PRINCIPAL
DOCUMENTS
The
following documents have been filed as part of this Annual Report on Form
40-F:
A.
Annual Information Form
For the
Registrant’s Annual Information Form for the fiscal year ended December 31,
2007, see Exhibit 99.1 of this Annual Report on Form
40-F.
B.
Audited Annual Financial Statements and accompanying Management’s Discussion and
Analysis
For the
Registrant’s Consolidated Audited Annual Financial Statements and accompanying
Management’s Discussion and Analysis for fiscal year ended December 31, 2007,
including the report of Independent Registered Chartered Accountants with
respect thereto, see Exhibit 99.2 of this Annual Report on Form 40-F. The
Registrant’s Consolidated Audited Annual Financial Statements have been prepared
in accordance with Canadian generally accepted accounting principles (“Canadian
GAAP”) and reconciled to United States generally accepted accounting principles
(“US GAAP”) - see Note 12 of the Notes to Consolidated Financial Statements of
the Registrant’s Consolidated Audited Annual Financial Statements, reconciling
the material differences between Canadian and US GAAP.
DISCLOSURE
CONTROLS AND PROCEDURES
After
evaluating the effectiveness of the Registrant’s disclosure controls and
procedures as required by paragraph (b) of 17 CFR 240.13a-15 or 240.15d-15, the
Chief Executive Officer and Chief Financial Officer of the Registrant have
concluded that, as of fiscal year ended December 31, 2007, the Registrant’s
disclosure controls and procedures were effective to ensure that material
information required to be disclosed by the Registrant in the reports that it
files or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the Commission’s rules and forms,
and accumulated and communicated to the Registrant’s management, including its
principal executive and principal financial officers, or persons performing
similar functions, as appropriate to allow timely decisions regarding required
disclosure.
MANAGEMENT’S
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management
is responsible for establishing and maintaining adequate internal control over
financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of
1934, as amended. Our internal control system is designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles in the United States.
Management
recognizes that effective internal control over financial reporting may
nonetheless not prevent or detect all possible misstatements or frauds. Also,
projections of any evaluation of effectiveness to future periods are subject to
the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with policies or procedures may
deteriorate.
Management
has evaluated the effectiveness of the Registrant's internal control over
financial reporting as of fiscal year ended December 31, 2007 based on the
framework in “Internal Control – Integrated Framework” issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO). Based
on this evaluation, management concluded that, as of fiscal year ended December
31, 2007, the Registrant maintained effective internal control over financial
reporting.
Deloitte
& Touche LLP, the independent registered public accounting firm that audited
the Registrant's Consolidated Audited Annual Financial Statements as of fiscal
year ended December 31, 2007, has expressed its opinion on the effectiveness of
the Registrant’s internal control over financial reporting as of fiscal year
ended December 31, 2007. A copy of Deloitte & Touche LLP’s
attestation report on internal control over financial reporting is included in
the Registrant’s Consolidated Audited Annual Financial Statements incorporated
by reference herein as Exhibit 99.2 of this Annual Report on 40-F.
ATTESTATION
REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM
This
information is provided in the Registrant's Consolidated Audited Annual
Financial Statements incorporated by reference herein as Exhibit 99.2 of this
Annual Report on Form 40-F.
CHANGES
IN INTERNAL CONTROL OVER FINANCIAL REPORTING
During
the fiscal year ended December 31, 2007, no changes occurred in the Registrant’s
internal control over financial reporting that have materially affected, or are
reasonably likely to materially affect, the Registrant’s internal control over
financial reporting.
NOTICES
PURSUANT TO REGULATION BTR
None.
AUDIT COMMITTEE FINANCIAL
EXPERT
The
Registrant’s Board of Directors has determined that it has at least one Audit
Committee financial expert serving on its Audit Committee. Derek White has been
determined by the Registrant’s Board of Directors to meet the “Audit Committee
financial expert” criteria prescribed by the Securities and Exchange Commission
and is “independent”, as that term is defined by the AMEX’s listing standards
applicable to the Registrant. Mr. White holds an undergraduate degree in
Geological Engineering and is a Chartered Accountant. The SEC has
indicated that the designation of Derek White as an Audit Committee financial
expert does not make him an “expert” for any purpose, impose any duties,
obligations or liability on him that are greater than those imposed on members
of the Audit Committee and Board of Directors who do not carry this designation,
or affect the duties, obligations or liability of any other member of the Audit
Committee.
CODE
OF ETHICS FOR CHIEF EXECUTIVE OFFICER, CHIEF FINANCIAL OFFICER, AND OFFICERS AND
DIRECTORS
The
Registrant has adopted Codes of Ethics for its Chief Executive Officer, Chief
Financial Officer, directors and officers. The Registrant has previously filed
its Codes of Ethics with the SEC as part of its Annual Report on Form 20-F for
fiscal year ended December 31, 2006. Shareholders may obtain a copy upon
request, addressed to The Secretary, MAG Silver Corp., #328-550 Burrard Street,
Vancouver, BC V6C 2G5. The Registrant has also posted its Codes
of Ethics on its internet website at www.magsilver.com. All amendments to the
Codes of Ethics and all waivers of the Codes of Ethics with respect to any of
the persons covered by them will be filed with the SEC and posted on the SEC’s
Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system at
www.sec.gov.
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
The
aggregate fees for professional services paid to Deloitte & Touche LLP for
fiscal years ended December 31, 2007 and December 31, 2006 were as follows (all
fees are in Canadian dollars):
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Fiscal
Year Ended
December
31, 2007
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Fiscal
Year Ended
December
31, 2006
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Audit
Fees
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$ |
118,000 |
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$ |
75,200 |
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Audit
Related Fees
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$ |
31,000 |
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$Nil
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Tax
Fees
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$Nil
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$ |
4,500 |
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All
Other Fees
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$Nil
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$Nil
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TOTAL
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$ |
149,000 |
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$ |
79,700 |
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The
nature of the services provided by Deloitte & Touche LLP under each of the
categories indicated in the table is described below.
Audit
Fees
Audit
fees are those incurred for professional services rendered by Deloitte &
Touche LLP for the audit of the Registrant’s annual financial statements and
services provided in connection with statutory and regulatory filings or
engagements.
Audit
Related Fees
Audit-related
fees are those incurred for assurance and related services reasonably related to
the performance of the audit or review of the annual statements that are not
reported under “Audit Fees” above.
Tax
Fees
Tax fees
are those incurred for tax compliance, tax advice and tax planning professional
services. These services consisted of: tax compliance including the
review of tax returns, and tax planning and advisory services relating to common
forms of domestic and international taxation (i.e. income tax, capital tax,
goods and services tax, payroll tax and value added tax).
All
Other Fees
Fees
disclosed in the table above under the item “All Other Fees” were incurred for
services other than the audit fees, audit-related fees and tax fees described
above.
PRE-APPROVAL
POLICIES AND PROCEDURES
It is
within the mandate of the Registrant’s Audit Committee to approve all audit and
non-audit related fees. The Audit Committee will be informed routinely as to the
non-audit services actually provided by the auditor pursuant to this
pre-approval process. The auditors also present the estimate for the
annual audit related services to the Audit Committee for approval prior to
undertaking the annual audit of the financial statements.
OFF-BALANCE
SHEET ARRANGEMENTS
None.
TABULAR
DISCLOSURE OF CONTRACTUAL OBLIGATIONS
(Property
expenditures in U.S. dollars, as per agreement)
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Option
Payments and Exploration Expenditures
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Total
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Less
than
1
year
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1-3
Years
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3-5
Years
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More
than
5
years
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Sierra
Ramirez Property (1)
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$ |
5,822,500 |
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$ |
252,500 |
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$ |
1,525,000 |
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$ |
4,045,000 |
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Nil
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Cinco
de Mayo Property (2)
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$ |
600,000 |
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$ |
250,000 |
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$ |
350,000 |
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Nil
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Nil
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Sello
Property
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$ |
1,012,500 |
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$ |
187,500 |
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$ |
825,000 |
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Nil
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Nil
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Other
Properties
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$ |
100,000 |
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$ |
100,000 |
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Nil
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Nil
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Nil
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Total
(US $)
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$ |
7,535,000 |
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$ |
790,000 |
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$ |
2,700,000 |
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$ |
4,045,000 |
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Nil
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(1) Of the
final payment in the amount of US$650,000 due December 14, 2010, up to
US$500,000 may be paid in Common Shares of the Registrant. The
Registrant has optioned other surface rights surrounding its current block in
2007.
(2)
Comprised of US$600,000 in option payments. Half of each of the remaining option
payments may be paid in Common Shares at a deemed price per share equal to the
average trading price of the Registrant’s Common Shares for 30 calendar days
prior to the date of the payment.
FORWARD-LOOKING
STATEMENTS
This
Annual Report on Form 40-F contains forward-looking statements and information,
within the meaning of Section 21E of the Exchange Act, relating to the
Registrant that are based on the beliefs and estimates of management as well as
assumptions made by and information currently available to the
Registrant.
Such
forward-looking statements and information include, but are not limited
to:
· The
future price of silver;
· The estimation of mineral
reserves and mineral resources;
· Estimates of the time and
amount of future silver production for specific operations;
· Estimated
future exploration expenditures and other expenses for specific
operations;
· Permitting
time lines;
· Requirements
for additional capital;
· Litigation
risks;
· Currency
fluctuations; and
· Environmental
risks and reclamation cost.
When used
in this document, any statements that express or involve discussions with
respect to predictions, beliefs, plans, projections, objectives, assumptions or
future events of performance (often but not always using words or phrases such
as “anticipate”, “believe”, “estimate”, “expect”, “intend”, “plan”, “strategy”,
“goals”, “objectives”, “project”, “potential” or variations thereof or stating
that certain actions, events, or results “may”, “could”, “would”, “might” or
“will” be taken, occur, or be achieved, or the negative of any of these terms
and similar expressions) as they relate to the Registrant or management, are
intended to identify forward-looking statements and information.
Such
statements reflect the Registrant’s current views with respect to future events
and are subject to certain known and unknown risks, uncertainties and
assumptions.
Many
factors could cause actual results, performance or achievements to be materially
different from any future results, performance or achievements that may be
expressed or implied by such forward-looking statements and information,
including, among others:
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•
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risks
relating to the Registrant’s ability to finance the exploration and
development of its mineral
properties;
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•
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permitting
risks relating to the Registrant’s exploration and development of its
mineral properties and business
activities;
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•
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risks
and uncertainties relating to the interpretation of exploration results,
geology, grade and continuity of the Registrant’s mineral
deposits;
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•
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commodity
price fluctuations (particularly gold and silver
commodities);
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•
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risks
related to governmental regulations, including environmental
regulations;
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•
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risks
related to possible reclamation activities on the Registrant’s
properties;
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•
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the
Registrant’s ability to attract and retain qualified management and the
Registrant’s dependence upon such management in the development of its
mineral properties;
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•
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increased
competition in the exploration
industry;
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•
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the
Registrant’s lack of infrastructure;
and
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•
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the
Registrant’s history of losses and expectation of future
losses.
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Should
one or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
described herein. This list is not exhaustive of the factors that may affect any
of the Registrant’s forward-looking statements and information. Forward-looking
statements are statements about the future and are inherently uncertain, and
actual achievements of the Registrant or other future events or conditions may
differ materially from those reflected in the forward-looking statements and
information due to a variety of risks, uncertainties and other factors,
including without limitation, those referred to in this document under the
heading “Risk Factors” and elsewhere. The Registrant's forward-looking
statements and information are based on the reasonable beliefs, expectations and
opinions of management on the date the statements are made, and the Registrant
does not assume any obligation to update forward-looking statements and
information if circumstances or management’s beliefs, expectations or opinions
should change.
For the
reasons set forth above, investors should not attribute undue certainty to or
place undue reliance on forward-looking statements and information.
The staff
of the United States Securities and Exchange Commission takes the position
that mining companies, in their filings with the SEC, should describe
only those mineral deposits that the companies themselves can economically
and legally extract or produce. This Annual Report on Form 40-F contains
information regarding adjacent properties on which we have no right to
explore or mine, and is considered by management to be of material
importance to the Registrant and its land holdings in the area. Investors
are cautioned that mineral deposits on adjacent properties are not necessarily
probative of the existence, nature or extent of mineral deposits on our
properties.
Please
consult the Registrant's public filings at
http://www.sedar.com/search/search_form_pc_en.htm and
http://www.sec.gov/edgar/searchedgar/companysearch.html for
further, more detailed information concerning these matters.
IDENTIFICATION
OF THE AUDIT COMMITTEE
The
Registrant has a separately designated standing Audit Committee. The members of
the Audit Committee are:
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Chair:
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Derek
White
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Members:
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Eric
Carlson
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R.
Michael Jones
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UNDERTAKING
AND CONSENT TO SERVICE OF PROCESS
A.
Undertaking
The
Registrant undertakes to make available, in person or by telephone,
representatives to respond to inquiries made by the Commission staff, and to
furnish promptly, when requested to do so by the Commission staff, information
relating to: the securities registered pursuant to Form 40-F; the securities in
relation to which the obligation to file an annual report on Form 40-F arises;
or transactions in said securities.
B.
Consent to Service of Process
The
Registrant, by filing this Annual Report on Form 40-F, hereby files a Form F-X
(attached hereto as Exhibit 99.3 to this Annual Report on Form 40-F) with the
Commission together with this Annual Report on Form 40-F and in connection with
the Registrant’s class of common stock in relation to which the obligation to
file this Annual Report on Form 40-F arises.
Any
change to the name or address of the Registrant’s agent for service shall be
communicated promptly to the Commission by amendment to Form F-X referencing the
file number of the Registrant.
ADDITIONAL
INFORMATION
Additional
information relating to the Registrant may be found on the System for Electronic
Document Analysis and Retrieval (SEDAR) at
http://www.sedar.com/search/search_form_pc_en.htm and on the SEC’s Electronic
Data Gathering, Analysis, and Retrieval (EDGAR) system at
http://www.sec.gov/edgar/searchedgar/companysearch.html.
SIGNATURES
Pursuant
to the requirements of the Exchange Act, the Registrant certifies that it meets
all of the requirements for filing on Form 40-F and has duly caused this Annual
Report on Form 40-F to be signed on its behalf by the undersigned, thereto duly
authorized,
Registrant: MAG Silver Corp.
By: /s/ “Daniel
T. MacInnis”
Name: Daniel T.
MacInnis
Title: President and
Chief Executive Officer
EXHIBITS