Magellan Minerals Ltd MAGNF

MNM to acquire Agua Azul

[coffintrader]

Magellan Minerals to acquire Agua Azul in Brazil

2011-08-29 09:37 ET - News Release


Mr. Gordon Allen reports
MAGELLAN MINERALS SIGNS OPTION ON AGUA AZUL GOLD PROPERTY, CARAJAS MINERAL PROVINCE, BRAZIL
Magellan Minerals Ltd. has signed an option agreement to earn 100% ofthe Agua Azul gold property located in the prolific Carajas mineralprovince of northern Brazil.
Agua Azul is a well-known district with historic workings that occurwithin an EW trending gold belt in south eastern Para state. Theproperty consists of two exploration licenses comprising 11,458 hectaresjust west of the town of Agua Azul do Norte, 300km south of theregional center of Maraba. An additional 27,148 hectares have beenstaked approximately 20km west of the Agua Azul property in the vicinityof numerous historic alluvial gold producers. The area has excellentinfrastructure and access. State highway 279 transects the northern partof both licenses and the nearby airport at Ourilandia is serviced bydaily flights from Belem via Carajas.
During the late 1980s and early 1990s, over 5,000 garimpeiros (artisanalminers) extracted several hundred thousand ounces of gold from minordrainages and shallow surface workings in bedrock within the licensearea. Recently, small scale miners have been exploiting a series ofveins and silicified zones up to 8 meters wide that returned values upto 87.7g/t Au in grab samples.
The area is underlain by an Achaean age metamorphic complex intruded bythe 1.89 billion year old Seringa granite. Several sub-parallelnorthwest striking gold-bearing structures have been identified across awidth of approximately 3km, hosted both in the metamorphic complex andthe younger granite.
Preliminary rock chip sampling by Magellan across quartz veining andperipheral silicification zones at Agua Azul returned values up to 17.46g/t Au across 5.4m (approximately 4.8m true width). A property-widesoil geochemistry survey is currently underway aimed at identifyingprospective drill targets.
The acquisition involves a series of annual payments to ParabrasMineracao starting with a payment of R$100,000 on signing, and a finalpayment which will be based on the number of proven and probable ouncesdefined by a feasibility study and a 1% NSR.
Dennis Moore, Magellan's Vice President of Business Developmentcommented, "The Aqua Azul property is an exciting new project containinghigh-grade, outcropping gold mineralization in an historic mining area.It is another low cost addition to Magellan's portfolio of qualityBrazilian gold assets, and is the first significant prospect to beidentified by Magellan in the prolific Carajas mineral province."
This press release was reviewed by Gordon Allen, B.Sc., P.Geo, aProfessional Geoscientist in British Columbia and a qualified person incompliance with National Instrument 43-101.
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