RENO, Nevada, August 13, 2018 /PRNewswire/ --
Magellan Gold Corporation (OTCQB: MAGE) ("Magellan" or "the Company") announced it has entered
into an agreement giving it the right to acquire the El Dorado Gold-Silver Property, a 50 hectare mining concession located near
the village of Las Minitas, which lies 50 kilometers south of Magellan's SDA Flotation Plant at
Acaponeta, Nayarit State. Magellan intends to advance El Dorado
towards production as a matter of priority. The Company has initiated permitting and is in the process of selecting an
underground mining contractor. The project has excellent road and rail infrastructure, and the Company plans to truck the ore
from El Dorado to the SDA Plant for processing. El Dorado is
situated within a district of epithermal vein systems from which historic mining produced high grades.
"Drilled resources at El Dorado appear to represent a readily available source of feed for
our SDA Mill," said Pierce Carson, Magellan's CEO. "If confirmed these resources could supply ore
to the mill for approximately five years at a mining rate of 100 tonnes per day. In addition, the geology is prospective for
extensions of mineralization and for new discoveries."
"Acquisition of El Dorado is a key step in our strategy of initiating and then increasing
production through the mill," Carson continued. "To achieve these objectives, we are considering all financing options, including
joint development with a suitable partner."
Commencement of mining will depend on a number of preconditions, the most important of which include obtaining environmental
and blasting permits, selecting and mobilizing a mining contractor and procuring financing. An access and land use agreement with
the local ejido already is in place. Once development begins, ore will be accessible with a minimal amount of underground
development. Ore will be sourced initially from the shallow, upper portions of the mineralized veins.
Drilling on the El Dorado vein system was conducted by a TSX.V-listed company in 2010-2011
and comprised 28 diamond core holes totaling 4,950 meters. Two veins appear to offer particular promise for mining, namely the
Hundido and Intermedia veins. These veins lie adjacent to and along strike from the old Hundido Mine, which from 1900-1927
produced an estimated 50,000 tonnes of high-grade gold-silver ore. The veins are steeply-dipping, highly silicified structures
cutting volcanic rocks. Polygonal resource calculations for the two veins, based on intersections in 10 core holes and after
applying a 25% tonnage deduction for dilution and recovery factors, yielded respectively 89,000 tonnes grading 7.01 g/t gold
equivalent (Au+Ag) over a true width of 2.3 meters (Hundido Vein); and 91,000 tonnes grading 15.17 g/t gold equivalent (Au+Ag)
over a true width of 8.3 meters (Intermedia Vein). These resources are non-NI43-101 compliant. The mineralization extends from
near surface to a drilled depth of 150 meters and is open at greater depth.
The El Dorado vein system can be traced on the surface for a distance greater than three
kilometers and exhibits structural complexity with numerous conjugate vein splits both in the hangingwall and footwall. This
complex structure hosts multiple mineralized zones including high-grade veins potentially minable underground, and lower-grade
open-pittable stockwork zones that are observed to extend over tens of meters in width in both the hangingwall and footwall of
the El Dorado vein system.
Magellan has concluded an agreement with Ingenieros Mineros, S.A. de C.V., the owner of the El
Dorado mining concession giving the Company the right to acquire the concession by making staged six-monthly option
payments over two years towards an end purchase price of $800,000 (plus 16% IVA). No royalties are
payable. Magellan has the right to begin production during the term of the agreement. The Company has made the initial option
payment of $50,000 (plus 16% IVA). In addition, Magellan has agreed with a TSX.V-listed company to
purchase a comprehensive El Dorado data package including diamond drill core and technical
information for a price of $120,000, payable in cash and Magellan common stock.
About Magellan Gold Corporation
Magellan Gold Corporation (OTCQB: MAGE) is a US public enterprise focused on the exploration and development of precious
metals. In November 2017, Magellan completed the purchase of the SDA Mill in the State of Nayarit, Mexico. Magellan also owns an advanced silver exploration property located in Arizona.
The SDA Mill is a fully operational flotation plant that also includes a precious metals leach circuit and associated assets,
licenses and agreements. The mill has the capacity to process ore at a rate of up to 200 tons per day. The mill has a ten-year
operating history. Historically its operation has been based on sales of flotation concentrates to smelters, and payment for
precious metals content. The mill lies within the rich Sierra Madre Occidental mineralized belt, which historically has yielded
millions of ounces of precious metals and offers multiple high-grade gold and silver epithermal vein opportunities.
The Company's 100% owned Silver District Property in southwest Arizona comprises over 2,000
acres covering the heart of the historic Silver District. The property contains a near-surface historical drilled resource
of 16 million ounces of silver and exhibits exploration promise for significant expansion.
To learn more about Magellan Gold Corporation, visit http://www.magellangoldcorp.com.
Cautionary Statement
The United States Securities and Exchange Commission permits mining companies, in their filings with the SEC, to disclose only
those mineral deposits that a company can legally extract or produce. Under SEC Industry Guide 7 standards, a "final" or
"bankable" feasibility study is required to report reserves. Currently we have not delineated "reserves" on any of our
properties. We cannot be certain that any deposits at our properties will ever be confirmed or converted into SEC Industry Guide
7 compliant "reserves." Investors are cautioned not to assume that all or any part of any "resource" estimates will ever be
confirmed or converted into reserves or that they can be economically or legally extracted.
Forward Looking Statements
This release contains " forward-looking statements. " Such statements are based on good faith
assumptions that Magellan Gold Corporation believes are reasonable but which are subject to a wide range of uncertainties and
business risks that could cause actual results to differ materially from future results expressed, projected or implied by su
ch forward-looking statements. Factors that could cause actual results to differ from those anticipated are
discussed in Magellan Gold Corporation ' s periodic filings with the Securities and Exchange Commission.
Contacts:
Magellan Gold Corporation
Pierce Carson: (505)463-9223
John Power: (707)884-3766
Peter Nesveda (INT IR): +61-4-1235-7375
SOURCE Magellan Gold Corporation