Magellan Minerals starts drilling at Cuiu Cuiu

2008-11-19 10:05 ET - News Release

Mr. Alan Carter reports

MAGELLAN MINERALS COMMENCES DRILLING AT CUIU CUIU PROJECT, BRAZIL

Magellan Minerals Ltd. has commenced a limited drill program of approximately 1,200 metres at its 100-per-cent-owned Cuiu Cuiu project. The Cuiu Cuiu project comprises 470 square kilometres of mineral exploration claims over one of the most prolific alluvial goldfields within the Tapajos mineral province of northern Brazil. Historic alluvial production is estimated to be 1.5 million to 2.0 million ounces gold. Four drill holes are planned to test the lateral and strike extent of the gold mineralization discovered by Magellan earlier this year beneath and adjacent to the historic Central pit.

The previous drilling campaign at Cuiu Cuiu, completed in April of this year, included intercepts of 220.7 m at 2.02 grams per tonne (g/t) at the Central target, 47.1 m at 1.76 g/t at Pau de Merenda (three km northwest of Central) and 39 m at 5.13 g/t at the historic Jerimum Cima workings (located 3.2 km east-northeast of Central).

Magellan has recently completed a ground magnetic survey over the Central area, which resulted in identification of a number of drill targets. Ground magnetometer surveys over the other primary targets identified to date within the central part of the Cuiu licence (Pau de Merenda, Jermim de Cima, Jerimum de Baixo, Machiche and Moreira Gomes) are continuing. The data generated will help define extensions to known mineralization, identify possible new mineralized areas and aid in targeting future drill programs.

Uniao

Eight holes totalling 1,231 m have been completed at the Uniao project, located 100 km south-southwest of Cuiu Cuiu. Six of the holes were drilled at the Cuiabano-Laje target, while two holes targeted the Gaspar vein. Drill results are pending. At the regional scale, interpretation of high-resolution satellite images and an extensive ground magnetic survey totalling 165 line kilometres, has identified several new target areas which will be subject to follow-up mapping and sampling.

Cost-cutting measures

In view of the current global financial crisis, Magellan has implemented a program of cost-cutting measures aimed at reducing its monthly cash expenditures. These include significant reductions in the drill programs at Uniao and Cuiu Cuiu, as well as a 70-per-cent reduction of the Brazil-based work force.

This press release was reviewed by Dennis Moore, BSc, MEng, member of AusIMM and SEG, a qualified person in compliance with National Instrument 43-101.

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