Magellan Minerals Ltd.

Magellan Minerals Ltd.

August 31, 2011 08:30 ET

Magellan Drills 42.6m @ 1.73 g/t Gold at Central Zone, Cuiu Cuiu Project, Brazil

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 31, 2011) - Magellan Minerals Ltd. (TSX VENTURE:MNM) ("Magellan") is pleased to report results on an additional 9 drill holes from the Cuiu Cuiu project in Pará, Brazil, where current resources total 1.2Moz (31Mt @ 1.2 g/t) of gold in the inferred category and 0.1Moz (3.4Mt @ 1.0 g/t) of gold in the indicated category. All of the holes reported here are step-out holes drilled to test possible extensions to the Central and Moreira Gomes deposits.

Highlights include 42.6m @ 1.73 g/t gold in hole 124 located at Central and 18.4m @ 0.46 g/t gold in hole 122, located in the eastern part of the Moreira Gomes zone. The Cuiu Cuiu project is located 25km NW of Eldorado Gold's Tocantinzinho project which is currently undergoing a feasibility study.


Results have been received for four holes from the Central zone. Two holes (123 and 127) were drilled to test the northern strike extent of the mineralized zone, one hole (124) was drilled to test the down dip extension, and one hole (128) was drilled in an effort to extend the mineralization cut in hole 121, i.e. 7.8m @ 8.44 g/t gold, at Central SE and reported on 21st July 2011 (see map on website). The Central zone currently contains an inferred resource of 0.5Moz (17Mt @ 0.9 g/t gold) and an indicated resource of 0.1Moz (3.4Mt @ 1.0 g/t gold).

Hole 124 was a deep hole designed to test the down dip extent of the main zone intersected in hole 96 (92.4m @ 0.71 g/t, + 44.7m @ 0.72 g/t, + 60m @ 0.63 g/t, + 31.1m @ 0.77 g/t gold). The hole intersected 10.1m @ 1.10 g/t gold from 366.7 to 376.8m depth as well as 42.6m @ 1.73 g/t gold between 411.7 and 454.3m depth demonstrating that the mineralized zone continues at depth (see map on website).

Holes 123 and 127 were drilled 130m and 240m north respectively of hole 118 and were designed to test the northern extensions of the Central zone; in particular the narrow high grade zone intersected in hole 118 (0.5m @ 58.7 g/t gold) reported on 21st July 2011. Hole 123 was stepped back to the east and cut only weak mineralization although the last sample from the bottom of the hole at 492.25m depth returned 0.47 g/t gold. Hole 127 cut several zones at depth including 8m @ 0.83 g/t gold from 260.5 to 268.5m depth raising the possibility of a mineralized structure parallel to the main Central zone.

Hole 128 was drilled 600m east of the previously reported hole 121 in Central SE (see press release dated 21st July 2011) which cut 7.8m @ 8.44 g/t gold. The hole cut no significant mineralized intervals although further results are pending from the Central SE area.

Drill hole intersections discussed in the text are summarized in the following table:

Hole ID From (m) To (m) Width* (m) Gold (g/t)
Central Zone
DDH 123 418.2 428.2 10.0 0.22
462.5 469.8 7.3 0.38
485.8 492.25 6.5 0.24**
DDH 124 366.7 376.8 10.1 1.10
411.7 454.3 42.6 1.73
485.5 496.6 11.1 0.23
DDH 127 260.5 268.5 8.0 0.83
322.6 328.6 6.0 0.21
357.3 374.3 17.0 0.30
DDH 128 No significant results
Moreira Gomes Zone
DDH 122 28.9 37.1 8.2 0.37
208.6 227.0 18.4 0.46
DDH 129 178.0 180.0 2.0 2.60
DDH 130 64.0 83.0 19.0 0.32

* All holes were drilled at -50°. Dips of the intersected structures are not known, and intersection widths are not necessarily true widths.
** Hole ended in mineralization.
Results are pending on holes 125 and 126.

Moreira Gomes

Results on three additional step-out holes have been returned from the Moreira Gomes zone which contains an inferred resource of 0.7Moz of gold (14Mt @ 1.5 g/t gold). All five holes were step-out holes designed to test the eastern and western extensions of the mineralized zone (see map on website).

Hole 122 was drilled 140m east of the previous most easterly hole 81 which cut 7m @ 0.74 g/t gold. The hole was aimed at testing the eastern strike extension to Moreira Gomes and intersected 18.4m @ 0.46 g/t gold demonstrating that the zone continues at least another 140m to the east. The mineralized zone at Moreira Gomes has now been drilled over a total strike length of 1.8km. Further drilling is planned for this area.

Step-out drilling to the west cut a strongly altered shear zone in holes 129 and 130 but returned only weakly mineralized intervals, the most significant of which is 19m @ 0.32 g/t gold in hole 130.

Results are currently pending on an additional 3 holes from Moreira Gomes West and 1 hole from Moreira Gomes East.

Magellan currently has three drill rigs operating at Cuiu Cuiu, with drilling expected to continue at least until the end of 2011. Results are currently pending on 13 step-out holes and machines are now operating at Moreira Gomes, Central and Jerimum Baixo.

Holes were drilled at 50 degrees from horizontal. All core samples (HQ diameter) were cut with a diamond saw and one-half of the core placed in bags, numbered and sealed then sent via a secure transport agency to the Company's office in Novo Progresso before shipping via secure transport to ACME preparation laboratory in Itaituba for sample preparation. Core samples were crushed down to 2 mm and a 1 kg split was pulverized to better than 85% minus 200 mesh. From Itaituba, ACME sent the pulp samples to Santiago, Chile for assaying. Gold analyses were conducted on 30g representative sample cuts using fire assay with an atomic absorption finish. Other sample cuts were subjected to a 4 acid digestion and analysed for silver and an additional 35 elements using inductively coupled plasma mass spectrometry (ICP-MS). ACME is an ISO 9001 registered laboratory and has a quality control program in place which includes the insertion of standard, blank, and duplicate samples, as well as conducting repeat analyses.

Magellan's QA/QC program also includes the insertion of standards, field duplicates and blank material in the sample sequence with the normal core samples to monitor sampling variances, laboratory precision and accuracy.

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

Magellan Minerals Ltd. (TSX VENTURE:MNM) is a TSX Venture Exchange listed exploration company with a number of gold exploration properties in the Tapajos region 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.

News Release #2011-19

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

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