Magellan Minerals Ltd

Published : November 18th, 2009

Signs Deal to Acquire Majority Interest in Creporizinho Gold Mine

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Keywords :   Brazil | Diamond | Gold | Gold Mine | Gold Producer |

Magellan signs deal to acquire majority interest in creporizinho gold mine, Brazil

 

Vancouver, BC, November 18, 2009 ? Magellan Minerals Ltd. (TSX-V: MNM) (?Magellan?) is pleased to announce that it has signed a binding Letter of Intent to acquire a 51% interest in the Creporizinho gold project in the Tapajos region of northern Brazil.  The agreement is binding on the vendor and subject to a number of conditions precedent in favor of Magellan, including financing and due diligence.

 

The Creporizinho project is located 4.6 km from the village of Creporizinho, 5 km north of the Transgarimpeiro highway and has good road access. The Creporizinho project comprises approximately 13,296ha, and hosts an active open pit gold mine and plant producing approximately 1,500 oz of gold per month. The current open pit is 350m in length, 70 to 90 meters wide and 70-80m deep, and is developed on a sheeted vein swarm hosted within hydrothermally altered granite (see attached photograph).  The sheeted vein system continues beyond the pit boundaries, along strike as well as laterally into the pit walls, and to depth, suggesting the possible presence of a significant gold deposit. The project has never been drilled although recent channel sampling in the pit returned values including 48m @ 2.77g/t Au and 35m @ 3.81g/t Au. No mineral resource or mineral reserve estimate has yet been prepared by Magellan or the vendor.

 

The Creporizinho mine has been in production for approximately 20 months, with initial production of approximately 400 ounces per month, building to the present rate of 1200-1500 ounces per month. Previous assaying of tailings and waste streams revealed that the present gravity plant is recovering approximately 46% of the contained gold, suggesting significant potential to improve the current gold recoveries. Metallurgical tests carried out by a consulting group for the vendor suggest that recoveries of 89% should be achievable.

 

Magellan has also agreed to sell to the vendors of the Creporizinho property a 49% interest in its nearby Uniao project which is located 10km to the NW of Creporizinho along the Transgarimpeiro highway. Surface sampling at Uniao has revealed several high grade vein structures which may be exploited and processed at the nearby Creporizinho plant.

 

The terms of the agreement involve Magellan paying the owners of the property a total of R$15,500,000 (approximately US$9,000,000) of which R$500,000 (approximately US$300,000) has been paid as a non-refundable deposit, with the balance to be paid within 45 days of the signing of the Letter of Intent after which Magellan will own 51% of the mine (including all of the capital equipment) and the mineral concessions. Magellan has also agreed to invest a further R$10,000,000 (US$5,800,000) in expanding the current operation over the next year. The deal is subject to a 45 day due diligence period during which time Magellan will carry out additional surface sampling and a limited Diamond drill program. The agreement is subject to approval from the TSX-Venture exchange.

 

Dennis Moore, VP Exploration of Magellan commented ?sheeted vein or stockwork style mineralization with obvious bulk tonnage potential are rare in the Tapajos. This prospect exhibits the same style of gold mineralization that occurs at the nearby Tocantinzinho and Cuiu Cuiu projects but with the difference that it is already a producing open pit gold mine. The Creporizinho pit is the first significant open-cut gold mine in the Tapajos Mineral Province and we believe it exhibits significant potential to host a major gold deposit?.    

 

Alan Carter, President and CEO of Magellan commented ?this acquisition, once complete, will mark a major step forward in Magellan?s evolution and will establish the Company as a small gold producer in Brazil. We believe that the current mine and processing plant can be expanded during 2010. The mineralization at Creporizinho is a very attractive target in that it comprises several unconstrained sheeted vein swarms and stockwork zones which are obviously amenable to open pit mining methods. We look forward to completing an aggressive drill program as soon as possible in order to determine the size of the mineralized system?.

 

The company has not prepared a 43-101 report on the property but will be required to do so in connection with its filing with the TSX Venture Exchange.

 

This press release was reviewed by Dennis Moore, B.Sc., M.Eng., member of AusIMM & SEG., a qualified person in compliance with National Instrument 43-101.

 

Magellan has a principal focus on exploring for and developing gold projects in the Tapajos Mineral Province of northern Brazil.

 

For further information, please contact:

Alan Carter

President and CEO

Tel:       604.676.5663    

Email:   info@magellanminerals.com

 

 

Data and Statistics for these countries : Brazil | All
Gold and Silver Prices for these countries : Brazil | All

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, MATO VELHO, JERIMUM BAIXO, MARANHENSE, UNIÃO, CUIU CUIU and NHAMUNDÁ 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
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