Magellan Minerals Ltd.
TSX VENTURE : MNM

Magellan Minerals Ltd.

March 08, 2011 09:00 ET

Magellan Announces Initial Resource Estimate at Cuiu Cuiu Project, Brazil

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 8, 2011) - Magellan Minerals Ltd. (TSX VENTURE:MNM) ("Magellan") is pleased to announce its initial National Instrument 43-101 compliant resource estimate, for the Cuiu Cuiu Project, Para State, Brazil.

Pincock, Allen and Holt Brazil, independent geological consultants, prepared the estimates for both the Central and Moreira Gomes zones at Cuiu Cuiu. The total resource estimate for both zones is 1.18 Million ounces of inferred material averaging 1.2g/t gold, and 0.11 Million ounces of indicated material averaging 1.0 g/t gold. Of the total resource, approximately 51% of the gold is contained within the Moreira Gomes deposit and 49% of the total gold is contained within the Central deposit. Both deposits remain open along strike and at depth.

A summary of the total indicated and inferred ounces contained within both zones is presented below.

  Total Resources
  Tonnage Au Grade Contained Au
  Tonne x 1000 gpt oz.
Central 3,400 1.0 100,000
Moreira Gomes 0 0 0
Total Indicated Resources 3,400 1.0 100,000
       
Central 17,000 0.9 500,000
Moreira Gomes 14,000 1.5 700,000
Total Inferred Resources 31,000 1.2 1,200,000
* Mineral resources are not mineral reserves and do not have demonstrated economic viability. Please note that all figures have been rounded to reflect their appropriate level of accuracy.
** These resources are constrained by mineable shapes and cut-off grades to meet the requirement that resources must have reasonable prospects for economic extraction. The mineable shapes are either Lerch-Grossman pits or conceptual underground stopes. Resources falling within the pits are reported at cut-off grades of 0.3 gpt Au for fresh rock or 0.4 gpt Au for saprolite. Stope shapes only include blocks above a cut-off grade of 1.3 gpt Au. The cut-off grades consider a gold price of $1,250 per ounce and metallurgical recoveries of 91% for fresh rock and 66% for saprolite.

A summary breakdown of the resources by zone, resource category, nature of the material and likely mining method is as follows.

    Tonnage Au Grade Contained Au
Saprolite   Tonne x 1000 gpt oz.
Central   200 1.9 13,000
Moreira Gomes   0 0 0
  Indicated Resources 200 1.9 13,000
         
Central   1,400 1.2 54,000
Moreira Gomes   1,900 1.5 91,000
  Inferred Resources 3,400 1.3 145,000
         
Open pit hard rock        
Central   3,200 0.9 96,000
Moreira Gomes   0 0 0
  Indicated Resources 3,200 0.9 96,000
         
Central   15,000 0.9 440,000
Moreira Gomes   11,000 1.5 500,000
  Inferred Resources 26,000 1.1 940,000
         
Underground hard rock        
Central   500 1.8 29,000
Moreira Gomes   1,000 1.9 62,000
  Inferred Resources 1,500 1.8 91,000
* Please note that all figures have been rounded to reflect their appropriate level of accuracy.

The inferred and indicated resources for the Central deposit are based on 51 drill holes, totaling 13,754 meters, and extending over approximately 1,000 meters of strike and up to 450 meters depth. All 51 holes intersected the mineralized structure which remains open along strike and at depth.

The inferred resources for the Moreira Gomes deposit are based on 24 drill holes, totaling 5,692 meters, extending over approximately 1,500 meters of strike length and to a vertical depth of up to 350 meters. As at Central, the mineralized structure remains open along strike and at depth.

A Block Model Inventory summary of both the Central and Moreira Gomes zones by resource category and cut-off grade is presented below. These data are not the subject of a pit optimization model.

  Block Model Inventory
  Indicated Blocks Inferred Blocks
Cut-off Grade Tonnage Grade Contained Au Tonnage Grade Contained Au
Au gpt T x 1000 Au gpt oz T x 1000 Au gpt Oz
1.0 1,000 2.0 66,000 11,000 2.3 830,000
0.9 1,200 1.9 71,000 13,000 2.1 880,000
0.8 1,400 1.7 76,000 15,000 1.9 950,000
0.7 1,600 1.6 82,000 19,000 1.7 1,000,000
0.6 2,000 1.4 89,000 22,000 1.5 1,100,000
0.5 2,400 1.3 97,000 28,000 1.3 1,200,000
0.4 2,900 1.1 100,000 35,000 1.2 1,300,000
0.3 3,500 1.0 110,000 45,000 1.0 1,400,000
0.2 4,500 0.8 120,000 64,000 0.8 1,600,000
0.1 6,200 0.6 130,000 100,000 0.5 1,700,000
* All figures are rounded to two significant digits.        

Alan Carter, President & CEO of Magellan said, "We are very pleased to report the initial resource estimate from the Central and Moreira Gomes gold deposits at Cuiu Cuiu today, and we look forward to the results of an aggressive drill program involving four drill rigs during 2011 which is aimed at expanding these initial resources and identifying new deposits at Cuiu Cuiu."

Magellan has drilled a total of 25,955 meters at Cuiu Cuiu to date, of which 19,446 meters were used in this resource estimate. The Company is planning to drill an additional 25,000 meters on the project during 2011. Two drill rigs are currently operating on site and two additional rigs are expected during March 2011. The objective of this program is to expand the Central and Moreira Gomes projects along strike and at depth, as well as follow-up drilling at the Jerimum Baixo, Jerimum Cima and Babi anomalies. Drilling is also planned at the recently identified Miraboa and Miraboa West gold-in soil anomalies at Cuiu Cuiu.

The resource calculation was completed by Independent Qualified Person, Aaron McMahon P.G. of Pincock, Allen & Holt. An NI 43-101 compliant technical report will be filed with sedar and posted on the Company's website within the next 6 weeks.

Magellan is a TSX Venture Exchange listed exploration company with a number of gold exploration properties in the Tapajos Province of northern Brazil and is focused on the Cuiu Cuiu and Coringa projects where drilling is currently in progress.

This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.

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

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