Magellan Minerals Ltd

Published : August 26th, 2015

Magellan Agrees to Acquire Andorinhas Processing Plant, Associated Equipment and Mining Fleet From Troy Resources

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Keywords :   Brazil | Gold | Lead | Recovery |

Magellan Agrees to Acquire Andorinhas Processing Plant, Associated Equipment and Mining Fleet From Troy Resources

Vancouver, B.C. - August 26th, 2015 - Magellan Minerals Ltd. (TSX-V: MNM) ("Magellan") is pleased to announce that it has reached an agreement with ASX listed Troy Resources Ltd. ("Troy") for the purchase of Troy's gold processing plant, associated equipment and mining fleet ("Andorinhas Assets") at its Andorinhas mine located in eastern Para state, Brazil.
Key components of the deal are as follows:

  • Magellan will pay Troy a total consideration of US$4.5M for the Andorinhas Assets
  • The processing plant, which is scheduled to be decommissioned during Q4 CY 2015, consists of an 800 t/day crushing and grinding facility, a gravity recovery circuit and a carbon-in-pulp recovery circuit
  • The mining fleet consists of drills, LHD's, trucks and other pieces of mobile equipment that were used for underground mining at Andorinhas, as well as all spares and consumables currently on site
  • Of the US$4.5M purchase consideration, Magellan will pay Troy a non-refundable deposit of US$150,000 cash within 30 days. A further US$3.35M is to be paid by 15th December 2015 and may, at Magellan's election, comprise up to a maximum of 9.99% of Magellan's issued and outstanding share capital at that time
  • An additional US$1M will be paid to Troy following the production of 20,000oz of gold or after 18 months, whichever comes soonest
  • Troy will have the ability to appoint a representative to the Magellan Board should its shareholding in Magellan exceed 7.5%, or as otherwise agreed

Troy previously operated the Andorinhas underground mine using shrinkage and cut and fill mining methods accessed via a 5m x 5m decline, which is very similar to the concept being developed for Coringa. As such, the mobile fleet, stope mining equipment, and major support equipment, such as fans and pumps, will be directly transferrable for use at Coringa.

Magellan representatives have visited the Troy site and process plant on two separate occasions in recent weeks and have observed that the plant is running well, and is extremely well suited for use at Coringa. The crushing plant consists of a jaw crusher feeding two cone crushers, which feed a grinding plant with two ball mills. The gravity section uses a Knelson concentrator, which feeds an ILR plant (Acacia). The process section includes all tankage for leaching, CIP and detox, followed by elution and electro-winning. The plant also comes with a well equipped lab, gold room and sophisticated security systems, and much of the electrical and control equipment is containerized allowing for easy transport to and installation at Coringa.

In addition, the agreement includes all spares, reagents and consumables currently on site. Some of this miscellaneous equipment and spares includes several kilometers of power cable and HDPE pipe, electrical panels, power transformers, various pumps and maintenance tools.

This agreement represents a major step forward for Magellan which is expected to result in significant savings in terms of capital costs and construction times. Magellan is currently working to finalize its assessment of the impact of this transaction on the ongoing feasibility study at Coringa. The focus will now be on securing funding for the acquisition.

Alan Carter, President and CEO of Magellan commented: "This represents a major step forward for Magellan in its drive to build the high grade Coringa mine. The timing of the shutdown at Andorinhas has been fortuitous for us. We plan to follow Troy's model of building and operating mines in Brazil for the fast-track development of Coringa. Let there be no doubt of our commitment to build this mine."

John Kiernan, VP Project Development stated "Troy's Andorinhas plant is currently operating well and is ideally suited for the scale and process requirements of the Coringa property, providing immediate capex savings relative to the previously published Preliminary Economic Assessment, and shortened asset procurement lead times. The fact that this deal also includes much of Troy's underground and site mobile equipment plus remaining consumables and small tools further enhances the opportunity for construction of a "fit for purpose" mine plan at Coringa, that can grow into the full mine plan envisioned in the feasibility work completed to date."

The agreement is subject to approval from the TSX Venture Exchange.

John Kiernan P.Eng, Magellan's VP Project Development and a "qualified person" within the definition of that term in NI 43-101, has reviewed the technical information contained in this news release.

Magellan Minerals (TSX-V: MNM) is a TSX Venture Exchange listed exploration and development company with two advanced gold properties in the Tapajos Province of northern Brazil. The Coringa project contains underground Measured resources of 110,000oz of gold (0.27Mt @ 12.8g/t gold) and underground Indicated resources of 443,000oz of gold (1.91Mt @ 7.2g/t gold) as well as Inferred resources of 360,000oz of gold (2.0Mt @ 5.4g/t gold) at a cut-off of 2.5g/t gold. (See the Company's news release dated April 8, 2015).The Cuiu Cuiu project contains 100,000oz of gold in the Indicated category (3.4Mt @ 1.0g/t gold) and 1,200,000oz of gold in the Inferred category (31Mt @ 1.2g/t gold). (See the report entitled "Resource Estimate and Technical Report for the Cuiu Cuiu Project, Tapajos Region, North Central Brazil" dated April 19, 2011 and filed on Sedar on April 21, 2011, and the Company's news release dated March 8, 2011).

For further information, please contact:
Alan Carter, President and CEO.
Tel: 604.676.5663.
Email: [email protected]

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

Read the rest of the article at www.noodls.com
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Magellan Minerals Ltd

EXPLORATION STAGE
CODE : MNM.V
ISIN : CA55908M1086
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Magellan is a gold exploration company based in Canada.

Its main exploration properties are PORQUINHO, CORINGA, MARANHENSE, MATO VELHO, JERIMUM BAIXO, UNIÃO, NHAMUNDÁ and CUIU CUIU in Brazil.

Magellan is listed in Canada. Its market capitalisation is CA$ 15.4 millions as of today (US$ 12.0 millions, € 10.5 millions).

Its stock quote reached its highest recent level on December 17, 2010 at CA$ 1.94, and its lowest recent point on January 22, 2016 at CA$ 0.03.

Magellan has 205 850 000 shares outstanding.

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Financings of Magellan Minerals Ltd
12/24/2009Completes $21 Million Brokered Private Placement
6/3/2010Completes $7.5 Million Brokered Private Placement
12/11/2009Announces $20 Million Brokered Private Placement
Nominations of Magellan Minerals Ltd
7/5/2011Gord Allen Joins Magellan as Head of Regional Exploration
Project news of Magellan Minerals Ltd
4/8/2015(Coringa).: Feasibility Study Resource Estimate at Coringa Returns In...
8/29/2013(Coringa)Reports Results from Infill Drilling at the Coringa Project,...
6/27/2013(Coringa)Confirms Metallurgical Results as Part of Feasibility Study ...
4/17/2013(Coringa)Provides Update on Feasibility Study at the Coringa Project,...
3/12/2013(Coringa)Commences Drilling at Coringa as Part of Feasibility Study
2/5/2013(Cuiu Cuiu)Reports Results from Exploration Drilling at Cuiu Cuiu Proje...
1/15/2013(Coringa)Announces the Initiation of a Feasibility Study for the Cori...
10/11/2012(Cuiu Cuiu).: Channel Sample Results From Ivo Zone at Cuiu Cuiu Return ...
6/28/2011(Coringa)Adds Third Drill Rig at Coringa Project and Identifies New M...
4/12/2011(Coringa)Surface sampling at Coringa project extends main structure 3...
4/8/2011(Coringa)Trench Results from the New Valdette Zone at Coringa, Brazil...
4/8/2011(Coringa)Trench results from the new Valdette zone at Coringa, Brazil...
3/8/2011(Cuiu Cuiu)Announces Initial Resource Estimate at Cuiu Cuiu Project, Br...
6/8/2010(Cuiu Cuiu)Drills 136.2m at 0.91g/t Gold and Extends Central Zone by 23...
5/27/2010(Coringa)Extends Meio Zone at Coringa Project and Expands Drill Progr...
5/18/2010(Coringa)Options an Additional 1,917 Hectares East of Coringa Gold Pr...
4/7/2010(Coringa)Provides Update on Coringa Project
9/28/2009(Cuiu Cuiu)Commences Drilling at Cuiu Cuiu
9/14/2009(Cuiu Cuiu)Provides Exploration Update on Cuiu Cuiu and Coringa Project...
Corporate news of Magellan Minerals Ltd
1/19/2016Magellan Makes US$500,000 Troy Payment
12/18/2015Magellan Extends Troy Agreement; Ken Nilsson Joins Magellan ...
11/3/2015Magellan Expands Non-Brokered Private Placement to $1,100,00...
9/24/2015Magellan Pays Troy Deposit Regarding Andorinhas Processing P...
9/23/2015Magellan Appoints Zengliang Li to Board of Directors
8/26/2015Magellan Agrees to Acquire Andorinhas Processing Plant, Asso...
8/4/2015Magellan Announces $500,000 Non-Brokered Private Placement
4/8/2015Feasibility Study Resource Estimate at Coringa Returns Incre...
4/8/2015Magellan Minerals Ltd.: Feasibility Study Resource Estimate ...
12/2/2014Magellan Completes Third and Final Tranche of $3,000,000 Pri...
10/17/2014Magellan Completes Second Tranche of $3,000,000 Private Plac...
9/23/2014Magellan Completes First Tranche of $3,000,000 Private Place...
9/4/2014Magellan Announces $3,000,000 Private Placement
8/11/2014Magellan Completes Shares for Debt Settlement
7/31/2014Magellan Enters Into Debt Settlement Agreement
5/6/2014Termination of Letter of Intent on Pocone Project, Brazil
9/11/2013(Coringa)Drills 3m @ 12.58 g/t Gold and Extends Three Key Zones at th...
6/12/2013(Coringa)Agrees Financial Advisory Role with Endeavour Financial for ...
12/12/2012(Coringa)Announces the Filing of a Preliminary Economic Assessment fo...
11/14/2012(Cuiu Cuiu)Commences Drilling at Ivo and Ratinho Targets, Cuiu Cuiu Pro...
11/1/2012(Coringa)Announces Positive Preliminary Economic Assessment for the C...
10/23/2012(Cuiu Cuiu)Trenching Returns 5m @ 54.8g/t Gold from the Ivo Zone at Cui...
7/12/2011(Coringa)Reports Initial Drill Results Including 36.7m @ 0.79g/t Gold...
5/31/2011Announces Voting Results of 2011 Shareholders Meeting
5/17/2011(Coringa).: Trench Results From Coringa Expand Valdette Zone and Iden...
5/12/2011(Cuiu Cuiu)Drills 24m @ 4.06 g/t Gold at Eastern Extension to Moreira G...
4/29/2011Adopts Shareholder Rights Plans and Grants Stock Options
4/8/2011is Pleased to Announce that National Bank and Mackie Researc...
8/18/2010Drills 84m @ 1.24 gold and extends mineralized zone by 600m ...
7/22/2010Drills 112m of 1.70g/t Gold at Moreira Gomes
7/8/2010Drills 53.6m @ 1.3g/t Gold and Continues to Expand Central Z...
6/23/2010Drills 32.1m @ 1.05g/t gold at Moreira Gomes
11/18/2009Signs Deal to Acquire Majority Interest in Creporizinho Gold...
5/14/2010Announces up to $7.5 Million Equity Financing
1/28/2010Drills 82.5m @ 1.02 g/t Gold and Extends Central Zone
1/5/2010Commences Preliminary Economic Assessment at Coringa
10/8/2009Reports Initial Resource Estimate at Coringa Project
9/1/2009Completes Plan of Arrangement with Chapleau
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