Magellan Minerals Ltd.

Magellan Minerals Ltd.

December 23, 2009 18:11 ET

Magellan Completes $21 Million Brokered Private Placement

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 23, 2009) -


Magellan Minerals Ltd. (TSX VENTURE:MNM) is pleased to announce that it has successfully completed a brokered private placement of 17,142,857 units and 11,428,571 subscription receipts for gross proceeds of $20,000,000. Magellan also issued 1,072,538 units and 715,030 subscription receipts pursuant to the exercise of an over-allotment option for additional gross proceeds of $2,995,000. In total, 18,215,395 units and 12,143,601 subscription receipts were issued for gross proceeds of $21,251,297. The units and subscription receipts were issued at a price of $0.70 each. The securities were offered through Toll Cross Securities Inc. and Dundee Securities Corporation, as co-lead agents, together with Haywood Securities Inc. (the "Agents").

Each unit sold consists of one common share and one-half of one share purchase warrant. Each whole warrant entitles the holder to acquire one common share in the capital of Magellan, at a price of $1.00 for a period of 24 months following closing. In the event that the closing price of the common shares on the TSX Venture Exchange is in excess of $1.50 for a period of 30 consecutive trading days at any time after the closing of the offering, Magellan may, at its option, accelerate the expiry date of the warrants by giving notice to the holders thereof and in such case the warrants will expire at 4:00 p.m. (Toronto time) on the date which is the earlier of the 30th day after the date on which such notice is given by Magellan and the 18 month anniversary of the closing of the offering.

Each subscription receipt converts, without further action of the holder, into one unit on the closing by Magellan of the acquisition of the Creporizinho gold project located in Brazil. The terms of the Creporizinho acquisition were described in Magellan's news release dated November 18, 2009, however the period in which Magellan may complete its due diligence has been extended to January 15, 2010.

The proceeds from the sale of the subscription receipts have been placed in escrow with Olympia Trust Company, and will be released to Magellan if the acquisition of the Creporizinho project takes place on or before March 23, 2010. If the closing does not take place on or before March 23, 2010, then the proceeds from the sale of the subscription receipts will be returned to the subscribers.

In connection with the sale of the units, Magellan paid cash commissions of $765,046 to the Agents, and issued 1,092,924 Agents' options. Each Agents' option may be exercised to acquire one unit of Magellan, at a price of $0.70 per unit for a period of 24 months from the closing of the offering. Upon the release from escrow of the proceeds from the sale of the subscription receipts, the Agents will receive a further $501,031 in cash commissions and 728,616 additional Agents' options.

The proceeds from the sale of the units will be used to fund exploration and general working capital. The proceeds from the sale of the subscription receipts will be used to acquire the Creporizinho gold project.

"This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available."

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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