Magellan Eyes Coringa Gold Project’s Economics

VANCOUVER — Magellan Minerals (MNM-V, MAGNF-O) has outlined a quarter million ounces of gold in its first resource estimate at the Coringa project, in Para state, Brazil.

Magellan pegs measured and indicated resources at Coringa at 1 million tonnes grading 8.53 grams gold per tonne.

Now, the company is anxious to get a handle on the economics of the deposit, says Magellan Minerals president and CEO Alan Carter.

“Our objective now is to push forward with a scoping study,” he says.

The project, 75 km south of the town of Novo Progreso and accessible by gravel road, is in Brazil’s Tapajos gold province.

Mineralization at Coringa occurs in a shear-vein system within mid- Proterozoic volcanic and granitic rock.

The resource estimate includes mineralization from four nearby zones: Serra, Galena, Meio and Eloy Juara. Thus far, the Serra zone accounts for the bulk of mineralization.

Vein widths in the four zones are between about 0.5 metre and 6 metres and typically fall in the 2-metre range. Mineralization is by and large within 100 metres of surface.

To account for dilution due to some narrow veining, Magellan based the resource estimate on a minimum mining width of 1.5 metres. Mineralization is open at depth in all four zones.

Although Carter says Magellan will continue to drill the property, the primary focus for the project will now be to prepare a scoping study, “rather than (trying) to grow Coringa to a million ounces gold.”

In terms of exploration potential, the 190-sq.-km property is covered with gold anomalies identified through stream sampling. There are also a number of near-surface historical workings that Carter says he would like to drill beneath.

All told, Magellan says the Coringa property holds over 10 km of mineralized structures. With only about 2 km of that tested, Carter says the question now is: “What about the other eight?”

Magellan Minerals acquired the Coringa property through a merger with Chapleau Resources, a deal finalized on Sept. 1, 2009.

At the moment, Magellan has drills turning at its Cui-Cui property, 180 km southwest of the Itaituba, Brazil. In the past few years, Cui-Cui has produced some lengthy gold-mineralized intercepts, including as much as 220 metres grading 2.02 grams gold.

With about $4 million in cash left in the bank, Carter says Magellan will soon want to raise more money.

On news of the resource estimate, Magellan shares lost 4¢ to close at 75¢ apiece. The company’s stock has hovered around the 75¢ mark since January. It has about 55 million shares outstanding.