Magellan continues step-out drilling in Brazil

Vancouver – Continued drilling by Magellan Minerals (MNM-V) at its Brazilian gold projects has expanded known mineralization and discovered potential new zones on the properties.

The company has drill programs operating at both its Cuiu Cuiu and Coringa properties, located a few hundred kilometres apart in the northern state of Para in what is known as the Tapajos region.

At Cuiu Cuiu, which the company describes as its most important property, drilling has expanded the Central zone 150 metres northwest while also establishing what is likely the eastern limit of the zone.

Holes 63 and 65 were drilled as step-out holes from recently drilled hole 56, which hit 73.2 metres grading 0.96 gram gold per tonne. Hole 63, drilled 75 metres to the northwest, intercepted 53.6 metres carrying 1.3 grams gold from 37 metres depth. Hole 65, drilled a further 75 metres northwest, cut 42 metres averaging 1.52 grams gold from 74 metres downhole.

Magellan plans further drilling in the area to establish a northwest limit to the property. The Central zone currently stands at 690 metres length.

The company also continues to drill at the Pau de Merenda zone, 3 km northwest of the Central zone, and at the Moreira Gomes zone, 5 km southeast of Central.

Ian Gendall, chief operating officer at Magellan, said he expects drilling to be ongoing at Cuiu Cuiu as the company works towards establishing a resource on the property. He said there are still a number of targets that need to be tested on the project.

At its Coringa project, Magellan is working to increase the gold resource at the property after releasing a preliminary economic assessment on it in early May.

The PEA was based on a resource of 831,000 measured and indicated tonnes grading 9.64 grams gold and 240,000 inferred tonnes grading 11.86 grams gold, both using a cutoff grade of 3 grams gold. The company has not yet made a formal decision to proceed with a feasibility study.

In its latest drilling, the company put two holes in the new Mae de Leite target, two kilometres along strike to the north of the established Meio zone. Hole 98 hit 9 metres carrying 1.95 grams gold from 46 metres depth. Hole 96, drilled 80 metres further north, cut 1.3 metres averaging 7.89 grams gold from 123 metres downhole. Four more holes are being drilled to further explore Mae de Leite.

“The discovery of the high-grade zone at Mae de Leite, between the Meio and Galena resource blocks, is very encouraging for expanding the current gold resource at Coringa,” said Gendall in a statement.

Roughly 70 metres southwest of the main mineralized zone the company drilled hole 94 that returned 2.6 metres grading 7.52 grams gold from 27 metres depth.

The Corgina property spans 19.1 sq. km, while Magellan recently optioned another 1.9-sq.-km claim immediately to the east of the Corigna claims.

Magellan only acquired the property as part of a takeover of Chapleau Resources last fall. Chapleau, in turn, started the first known drill campaign on the property in 2007. Before that the area had seen extensive alluvial mining, with some evidence of historic surface and underground artisanal mining of the quartz veins.

The company closed a $7.5 million financing in early June, selling 10 million shares at 75¢ each. Magellan’s share price closed at 71¢ on the latest news with 84 million shares outstanding.