Gold Price: US $1,370.8/ounce
Magellan Steps Out at Cuiu Cuiu and Drills 7.8m @ 8.44 g/t Gold 300m East of Central Zone
July 21, 2011
Vancouver, BC, July 21st, 2011 - Magellan Minerals Ltd. (TSX-V: MNM) ("Magellan") is pleased to report results on an additional 11 drill holes from the Cuiu Cuiu project in Pará, Brazil, where current resources total 0.1 Moz (3.4Mt @ 1.0g/t) of gold in the indicated category and 1.2 Moz (31Mt @ 1.2 g/t) of gold in the inferred 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 7.8m @ 8.44 g/t gold in hole 121 located 300m east of Central, and 0.5m @ 58.7 g/t gold in hole 118, located 75m north of the Central zone. The Cuiu Cuiu project is located 25km NW of Eldorado Gold's Tocantinzinho project which is currently undergoing a feasibility study.
Five additional step-out holes were drilled at Central in order to test for possible extensions of the mineralized zone to the north-west, south-east and south-west (see map on website). The Central zone currently contains an indicated resource of 0.1 Moz (3.4Mt @ 1.0 g/t gold) and an inferred resource of 0.5 Moz (17Mt @ 0.9 g/t gold).
Hole 118 was drilled 70m NW of hole 7 (13.9m @ 2.49g/t including 1m @ 15.95g/t gold) which had been the most northerly hole drilled at Central. The hole cut a narrow but well mineralized shear zone from 207.2 to 207.7m depth which returned 0.5m @ 58.7g/t gold. This is almost certainly the extension of the high grade zone intersected in hole 7. Two zones of weaker mineralization were also intersected near the top of the hole (7.0m @ 0.41 g/t gold from 33.0 to 40.0m depth and 11.0m @ 0.42 g/t gold from 51.0 to 62.0m depth) raising the possibility of parallel mineralized zones to the west-northwest of the main structure.
Hole 118 confirms that the mineralized zone at Central narrows significantly to the north but contains bonanza grades that may be amenable to underground mining.
Three holes (113, 115 and 121) were drilled between 100 and 300m east of the southern part of the Central zone. Holes 113 and 115 were drilled in the creek in a NE direction and were designed to test for possible parallel structures E of Central. Drill hole 113 cut 4.0m @ 0.58 g/t gold. Hole 115 cut no significant values.
Hole 121 was drilled 300m east of Central on the eastern side of the creek in an area with no previous drilling. This area hosts the Central SE gold-in-soil anomaly; a large untested geochemical feature approximately 1km across. The hole cut a highly altered and mineralized shear zone with abundant pyrite and quartz. This structure contained 7.8m @ 8.44 g/t gold from 98.0 to 105.8m.
Mineralization limits have not currently been defined. Further drilling will test the potential continuation of this zone, particularly to the east where the gold-in-soil anomaly extends for another 1km.
Hole 117 was drilled approximately 200m SW of the main Central mineralized zone to test for parallel structures. It cut 10.3m @ 0.70 g/t gold from 160.7 to 171.0m in an area that is approximately 100m SW of the currently defined limit of the Central deposit. This may be the same zone that was intersected in hole 4 (16.9m @ 0.69g/t) 35m to the east.
Results on four additional holes have been returned from the Moreira Gomes zone which contains an inferred resource of 0.7 Moz of gold (14Mt @ 1.5 g/t gold). All four holes were step-out holes designed to test the eastern and western extensions of the mineralized zone (see map on website). Holes 111, 112 and 120 were drilled over a 200m strike length and were designed to test the eastern extension to Moreira Gomes. The most significant mineralization was intersected in hole 111 which cut 7.2m @ 0.62 g/t gold from 185.0 to 192.2m depth. The mineralized zone in this area east of the known body appears to be disrupted by a NNE trending fault and possible post-mineral dyke.
Drillhole 114 was also a step-out hole designed to probe the western extension of the Moreira Gomes deposit and was drilled 100m west of hole 62. Despite cutting a strongly altered shear zone that is probably a continuation of known mineralized shear zone, no significant values were returned from this hole.
Results are currently pending on an additional 6 holes at Moreira Gomes all of which are step-outs to the east and west.
Two reconnaissance holes (116 and 119) were drilled at the Guarim prospect which is located approximately 500m south of Moreira Gomes (see map on website). Both holes were targeting old surface workings and a geophysical anomaly trending east-west that resembles a geophysical feature at Moreira Gomes. The two holes were drilled 100m apart. Hole 116 intersected 0.5m @ 30.2 g/t gold from 57.2 to 57.7 g/t gold demonstrating the presence of a narrow high grade structure at Guarim. Drill hole 119 returned no significant values.
The initial drilling at Guarim confirms the presence of high grade structures south of the Moreira Gomes deposit. Further drilling will be required in order to determine the continuity and grade of the discovery at Guarim.
Drill hole intersections discussed in the text are summarized in the following table:
* All holes were drilled at -50°. Dips of the intersected structures are not known, and intersection widths are not necessarily true widths
Magellan currently has three rigs operating at Cuiu Cuiu and drilling is expected to continue at least until the end of 2011. Results are currently pending on an additional 12 step out holes with rigs operating at Moreira Gomes and Central SE. The Jerimum Baixo target will also be the subject of further drilling during the next few weeks.
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 Gordon Allen, B.Sc., P.Geo, a Professional Geoscientist in British Columbia and a qualified person in compliance with National Instrument 43-101.
For further information, please contact:
Jennifer Duthie, Corporate Communications Manager
The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release. 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
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