VANCOUVER, BRITISH COLUMBIA--(Marketwired - April 8, 2015) - Magellan Minerals Ltd. (News - Market indicators) ("Magellan") is pleased to announce an updated National Instrument 43-101 compliant feasibility level resource estimate prepared by Snowden Mineral Industry Consultants ("Snowden") for the Coringa Project, Para State, Brazil.
Highlights include:
- Measured and Indicated resources of 553,000 ounces of gold representing 2.18Mt @ 7.88 g/t gold @ a 2.5g/t cut-off. These compare with the existing M&I resource of 516,000oz representing 2.22Mt @ 7.23g/t gold at a 2g/t cut-off. Grade has thus increased by 9% and the total number of ounces has increased by 7% despite the higher cut-off grade.
- Inferred resources of 360,000 ounces of gold representing 2.06Mt @ 5.43 g/t gold at a 2.5 g/t gold cut-off grade. These compare with the existing Inferred resources of 405,000oz of gold, representing 2.66Mt @ 4.73 g/t gold at a 2g/t cut-off. The grade of the Inferred resource has thus increased by 15% since the previous estimate.
- at a 2.5 g/t gold cut-off grade, primary resources are contained within four main areas on the project which include Serra (43% of Measured and Indicated, 9% of Inferred), Meio - Come Quieto (35% of Measured and Indicated, 42% of Inferred), Galena - Mae de Leite (21% of Measured and Indicated, 19% of Inferred) and Demetrio (30% of Inferred).
Three main zones now form the basis of the Measured and Indicated resources at Coringa which were calculated based on 179 diamond drill holes, totaling 28,436 meters. The Valdette zone does not meet the 2.5 g/t cut-off threshold and will be the target of future drill programs. All of these zones remain open at depth. Serra, Meio-Come Quieto and Demetrio remain open along strike.
All data was composited to the entire intersection length within the mineralization domain. The experimental variogram of gold grade was calculated in the XZ plane due to the thickness of the veins. Gold grades were estimated within each individual vein using ordinary kriging of 1m by 10m by 5m parent blocks using composites with top cuts.
Magellan's President and CEO, Alan Carter stated, "We are very encouraged by Snowden's revised resource estimate at Coringa which forms a key component of the ongoing feasibility study. Despite the use of a higher cut-off grade of 2.5g/t we have been able to increase the M&I resources by 7% and the grade by 9% which bodes well for the mine plan."
Tables 1 and 2 show the resources calculated on a global basis at various cut-off grades and at a 2.5 g/t cut-off grade for each zone and category at Coringa respectively.
Table 1: Coringa Global Mineral Resource vs Cut-Off Grade (Undiluted)
Table 2: Coringa Mineral Resource, 2.5 g/t Gold Cut-Off Grade (Undiluted)
NOTE: Mineral resources that are not reserves do not have demonstrated economic viability. An Inferred Mineral Resource is that part of a mineral resource for which quantity and grade can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. An Indicated Mineral Resource is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The resource estimate used a density of 2.75 t/m3. All numbers have been rounded to reflect their appropriate level of accuracy.
The Coringa mineral resource estimate was prepared by Mr. Walter Dzick, P.Geo., a registered Professional Geologist with APEGBC and Principal Geologist at Snowden Mining Industry Consultants, as part of the ongoing Feasibility Study at Coringa. The mineral resource estimate adheres to the Canadian Institute of Mining (CIM) "Best Practice Guidelines" for "Estimation of Mineral Resources and Mineral Reserves". Mr. Dzick is an "independent" and "qualified person" as such terms are defined in NI 43-101.
The complete NI 43-101 compliant feasibility report on the Coringa project will be filed on SEDAR within the next 45 days. The full Feasibility Study is on schedule for completion during April 2015.
Magellan also announces that it has entered into a non-exclusive advisory agreement with a third party pursuant to which the advisory firm will provide financial advisory services to Magellan in connection with the securing of financing. As part of the agreement, Magellan will pay the advisor a success fee in the event of the completion of a financing transaction and subject to TSX-V approval, Magellan will pay a work fee of $50,000 payable in common shares of the company in two equal tranches of $25,000 each. Magellan will initially issue 312,500 common shares to the advisor in connection with the first tranche at a deemed price of $0.08 per share. The shares relating to the remaining 50% of the work fee are to be issued on the earlier of 90 days following the date of the advisory agreement and the date of closing of a financing transaction (as defined in the agreement). All shares issued will be subject to a four month hold period.
Magellan is a TSX Venture Exchange listed exploration and development company with a number of gold properties in the Tapajos Province of northern Brazil including the Cuiu Cuiu and Coringa projects. The Coringa project is the focus of a soon to be completed feasibility study, which will provide guidance to the company in order to make a decision on financing and production.
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.
News Release #2015-3