Chapleau Resources Ltd.
TSX VENTURE : CHI

Chapleau Resources Ltd.

July 15, 2009 17:45 ET

Magellan and Chapleau Announce Signing of Arrangement Agreement and Date of Chapleau's Annual General and Special Shareholder Meeting to Approve a Plan of Arrangement Announced on March 23, 2009

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 15, 2009) - Magellan Minerals Ltd. (TSX VENTURE:MNM) ("Magellan") and Chapleau Resources Ltd. (TSX VENTURE:CHI) ("Chapleau") have entered into a binding arrangement agreement ("Arrangement Agreement") dated effective as of July 9, 2009 regarding their intention to merge to form a combined gold exploration and development company focused on the mineral potential of northern Brazil. Subject to the satisfaction of certain conditions, Magellan will acquire all of the issued and outstanding common shares of Chapleau through a plan of arrangement.

A special (and annual general) meeting of Chapleau shareholders has been scheduled for August 26, 2009 to seek shareholder approval for the proposed plan of arrangement.

Pursuant to the terms of the Arrangement Agreement, Magellan has agreed to offer Chapleau shareholders 0.267 Magellan shares for each Chapleau common share. Upon the exercise of outstanding Chapleau options and warrants, the holders will be entitled to receive common shares of Magellan in an amount and at exercise prices adjusted in accordance with the same exchange ratio.

Highlights

Relevant highlights regarding the plan of arrangement are as follows:

- Chapleau's key asset is the Coringa project which is located 250 kilometres south of Magellan's Cuiu-Cuiu discovery in northern Brazil, and comprises a series of gold bearing veins which extend over a combined strike extent of 10 kilometres (8,785 metres). Drilling to date along 2 kilometres of these structures, has defined high-grade gold mineralization over strike lengths up to 400 metres with values up to 65.77 grams per tonne gold over 3 metres. Numerous as yet untested geophysical and geochemical anomalies exist over a 300 square kilometre area.

- Coringa has excellent road access and is located 21 kilometres from the local grid power. Chapleau is currently engaged in discussions with a number of parties regarding the completion of a 43-101 compliant resource estimate for Coringa.

- Magellan's key asset is the Cuiu-Cuiu project where an extensive soil sampling program has identified five major gold-in soil anomalies. Drilling at the Central anomaly returned values of up to 220m @ 2.02 grams per tonne gold during 2008. Reconnaissance drilling at the nearby Pau de Merenda anomaly, 3 kilometres to the NW, returned values up to 47 metres @ 1.76g/t Au, and limited drilling at the Jerimum Cima anomaly returned values up to 39 metres @ 5.13 grams per tonne gold.

- The plan of arrangement will result in an expanded land position of 840 square kilometres in the Tapajos Gold Province of Brazil, a region which produced an estimated 30 million ounces of gold between 1978 and 1995, largely from alluvial sources.

The plan of arrangement will bring together a management group with considerable experience and several significant gold and copper discoveries in South America. Alan Carter, who recently guided Magellan to a successful IPO and raised C$11M in the process, will remain as President and CEO of Magellan. Dennis Moore will remain the VP Exploration of Magellan. Dennis was responsible for the initial identification and later discovery of the Tocantinzinho gold deposit (2.1Moz), currently the largest known gold deposit in the Tapajos region.

Ian Gendall (currently President of Chapleau) will become COO of Magellan and is credited with the discovery of several new porphyry copper-gold deposits in southern Ecuador. Jim Stypula, currently Chapleau's CEO, will become Chairman of Magellan.

Completion of the plan of arrangement is conditional upon:

1. Chapleau shareholders having approved the plan of arrangement;

2. receipt of all necessary regulatory approvals, including approval of the TSX Venture Exchange;

3. the absence of a material adverse change with respect to each party; and

4. certain other customary conditions.

About Magellan

Magellan is a TSX Venture Exchange listed exploration company with a number of gold exploration properties in the Tapajos Province of northern Brazil. Magellan's key asset is the Cuiu Cuiu project where recent drilling has identified a new gold deposit at the Central zone.

About Chapleau

Chapleau is a TSX Venture Exchange listed mineral exploration company with a principal focus on gold exploration in Brazil. Chapleau's gold projects in Brazil include Coringa and Mato Velho, totaling 37,128 hectares in the Tapajos Gold Province.

Cautionary Statements Regarding the Plan of Arrangement: Completion of the transaction is subject to a number of conditions, including regulatory approval, shareholder approvals, completion of satisfactory due diligence, a definitive agreement and approval of the British Columbia Supreme Court. There can be no assurance that the transaction will be completed as proposed or at all. Investors are cautioned that, except as disclosed in the Management Information Circular to be prepared in connection with the transaction, any information released or received with respect to the plan of arrangement may not be accurate or complete and should not be relied upon. Trading in the securities of exploration and development stage resource companies should be considered highly speculative.

Forward-Looking Statements: Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the corporations' periodic filings with Canadian Securities Regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. Statements in this press release other than purely historical information, including statements relating to the companies' future plans and objectives or expected results, constitute forward-looking statements. Forward looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the companies' business, including risks inherent in mineral exploration and development. The companies do not assume the obligation to update any forward-looking statement. In particular, no representation is made in this release as to the timing of the plan of arrangement, whether the plan of arrangement will complete on the terms described herein or at all, the success or value of the combined companies after the plan of arrangement. In addition, there are numerous risks and other factors that will influence a development decision, including concluding resource evaluations on mineral properties, mine design limitations, permitting risks and economic factors, all of which may be beyond our control.

U.S. Cautionary Statements: We advise US investors that while the terms "measured resources", "indicated resources" and "inferred resources" are recognized and required by Canadian regulations, the US Securities and Exchange Commission does not recognize these terms. US investors are cautioned not to assume that any part or all of the material in these categories will ever be converted into reserves.

TSX Venture Exchange: Neither 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.

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