🕐18.11.09 - 19:19 Uhr
Magellan Signs Deal to Acquire Majority Interest in Creporizinho Gold Mine
Magellan signs deal to acquire majority interest in creporizinho gold mine,
Brazil
Vancouver, BC, November 18, 2009 - Magellan Minerals Ltd.
(TSX-V: MNM)
("Magellan") is pleased to announce that it has signed a binding Letter of
Intent to acquire a 51% interest in the Creporizinho gold project in the
Tapajos region of northern Brazil.
The agreement is binding on the vendor
and subject to a number of conditions precedent in favor of Magellan,
including financing and due diligence.
The Creporizinho project is located 4.6 km from the village of Creporizinho,
5 km north of the Transgarimpeiro highway and has good road access.
The
Creporizinho project comprises approximately 13,296ha, and hosts an active
open pit gold mine and plant producing approximately 1,500 oz of gold per
month.
The current open pit is 350m in length, 70 to 90 meters wide and
70-80m deep, and is developed on a sheeted vein swarm hosted within
hydrothermally altered granite (see attached photograph).
The sheeted vein
system continues beyond the pit boundaries, along strike as well as
laterally into the pit walls, and to depth, suggesting the possible presence
of a significant gold deposit.
The project has never been drilled although
recent channel sampling in the pit returned values including 48m @ 2.77g/t
Au and 35m @ 3.81g/t Au.
No mineral resource or mineral reserve estimate has
yet been prepared by Magellan or the vendor.
The Creporizinho mine has been in production for approximately 20 months,
with initial production of approximately 400 ounces per month, building to
the present rate of 1200-1500 ounces per month.
Previous assaying of
tailings and waste streams revealed that the present gravity plant is
recovering approximately 46% of the contained gold, suggesting significant
potential to improve the current gold recoveries.
Metallurgical tests
carried out by a consulting group for the vendor suggest that recoveries of
89% should be achievable.
Magellan has also agreed to sell to the vendors of the Creporizinho property
a 49% interest in its nearby Uniao project which is located 10km to the NW
of Creporizinho along the Transgarimpeiro highway.
Surface sampling at Uniao
has revealed several high grade vein structures which may be exploited and
processed at the nearby Creporizinho plant.
The terms of the agreement involve Magellan paying the owners of the
property a total of R$15,500,000 (approximately US$9,000,000) of which
R$500,000 (approximately US$300,000) has been paid as a non-refundable
deposit, with the balance to be paid within 45 days of the signing of the
Letter of Intent after which Magellan will own 51% of the mine (including
all of the capital equipment) and the mineral concessions.
Magellan has also
agreed to invest a further R$10,000,000 (US$5,800,000) in expanding the
current operation over the next year.
The deal is subject to a 45 day due
diligence period during which time Magellan will carry out additional
surface sampling and a limited diamond drill program.
The agreement is
subject to approval from the TSX-Venture exchange.
Dennis Moore, VP Exploration of Magellan commented "sheeted vein or
stockwork style mineralization with obvious bulk tonnage potential are rare
in the Tapajos.
This prospect exhibits the same style of gold mineralization
that occurs at the nearby Tocantinzinho and Cuiu Cuiu projects but with the
difference that it is already a producing open pit gold mine.
The
Creporizinho pit is the first significant open-cut gold mine in the Tapajos
Mineral Province and we believe it exhibits significant potential to host a
major gold deposit".
Alan Carter, President and CEO of Magellan commented "this acquisition, once
complete, will mark a major step forward in Magellans evolution and will
establish the Company as a small gold producer in Brazil.
We believe that
the current mine and processing plant can be expanded during 2010.
The
mineralization at Creporizinho is a very attractive target in that it
comprises several unconstrained sheeted vein swarms and stockwork zones
which are obviously amenable to open pit mining methods.
We look forward to
completing an aggressive drill program as soon as possible in order to
determine the size of the mineralized system".
The company has not prepared a 43-101 report on the property but will be
required to do so in connection with its filing with the TSX Venture
Exchange.
This press release was reviewed by Dennis Moore, B.Sc., M.Eng., member of
AusIMM & SEG., a qualified person in compliance with National Instrument
43-101.
Magellan has a principal focus on exploring for and developing gold projects
in the Tapajos Mineral Province of northern Brazil.
For further information, please contact:
Alan Carter
President and CEO
Tel: 604.676.5663
Email: