Building Gold Resources in BrazilThrough Grass Roots Exploration January 2012 TSX-V: MNM | www.magellanminerals.com
Safe Harbor Statement The material presented herein is private and confidential. The contents are not to be reproduced or distributed to any third party, including the public or press. Certain statements contained in this presentation constitute forward-looking statements. These statements relate to future events or the Corporations future performance, business prospects or opportunities. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect, "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. The Corporation believes that the expectations reflected in those forward- looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. These statements speak only as of the date specified. The Corporation does not intend, and does not assume any obligation, to update these forward-looking statements. These forward-looking statements involve risks and uncertainties relating to, among other things, results of exploration activities, the Corporations limited experience with development-stage mining operations, uninsured risks, regulatory changes, defects in title, availability of materials and equipment, timeliness of government approvals, changes in commodity and, particularly, gold prices, actual performance of facilities, equipment and processes relative to specifications and expectations and unanticipated environmental impacts on operations. Actual results may differ materially from those expressed or implied by such forward-looking statements.2
Investment Highlights • Region with Excellent Potential: the Tapajos is the World’s third largest placer gold province, estimated to have produced 20-30 Moz from streams between 1978 and 1995 from artisanal, garimpeiro-type miners • Experienced Management: 150+ years of mining experience, track record for discovery. Tocantinzinho deposit (2.5Moz), now owned by Eldorado Gold. 3 grass roots gold discoveries totaling 4.2Moz in 7 years. • Projects: Advanced projects with significant upside: • Cuiu Cuiu – 1.3Moz gold resource (100,000oz indic. + 1.2Moz inf.), drilling with 2 rigs • Coringa – 370,000oz gold resource (270,000oz indic. + 100,000oz inf.), drilling with 3 rigs • Key Stakeholders: Newmont Mining owns 2.5%; Kinross owns 1% • Strong Cash Position: $7M in treasury3
Proven Management TeamJim Stypula Gordon AllenChairman Head, Regional Exploration • Previously CEO of Chapleau Resources, financier with 20 • 35 years experience in the mineral exploration industry, years experience in mineral exploration predominantly in Latin America • Founding director of Far West Mining • Responsible for discovery of the Santo Domingo IOCG deposit of Far West MiningAlan Carter Derek WhitePresident & CEO, Director Director • 20 years of experience. Former Exploration Manager for Rio • Currently Executive VP Bus. Dev. of Quadra Mining and Tinto and Business Dev. Manager at BHP Billiton. with 20+ years financial experience in the mining and • Director and co-founder of Peregrine Diamonds and metals industry Peregrine Metals • Ex-Impala Platinum Ltd, Gencor and BillitonDennis Moore Mario SzotlenderVP Business Development, Director Director • Exploration geologist with 27 years experience, half of it in • Former CEO of Rusoro Mining, Director of Endeavour Silver Latin America and Radius Gold. • Responsible for discovery of the Tocantinzinho deposit, now • 20 years experience financing and managing companies in owned by Eldorado Gold Latin AmericaPaul Hansed Richard ZimmerChief Financial Officer Director • 20+ years of accounting and finance experience including • Former senior mine engineer for Teck, 19 years with KPMG in Canada and Europe general manager of Mount Edon Gold Mines, and project manager of POGO project.Guillermo HughesChief Geologist • Most recent role was President & CEO of Far West Mining Ltd. • 26 years experience in the mineral exploration industry4 including experience in Argentina, Peru and Brazil
Key Land Position in Competitive Belt Tapajos Site of world’s largest ever gold rush from 1970’s to 1990’s Largest placer gold province in Brazil, 3rd largest placer gold province in world – previous placer production est. 20-30 Moz6
Cuiu Cuiu and Tocantinzinho • Tocantinzinho (2.5Moz) produced an est. 200,000oz of Cuiu Cuiu 2Moz from streams placer gold from artisanal +1.3Moz resource to date surface workings. Cuiu Cuiu produced 1.5 – 2Moz of placer gold ** road • Eldorado’s announced PFS in Tocantinzinho 0.2Moz from streams May 2011 on 160,000oz/yr OP 2.5Moz resource mine, Capital costs of $383M, Cash costs of $559/oz and 11.8% IRR (14.4% with tax breaks) Rio Crepori • Road construction to site in progress • FS study on Toca currently in progress and expected to be completed during Q2 2012 * Source : DNPM ** Source: Melho, R. 2007. A preliminary assesment of the Tocantinzinhop gold project, Tapajos gold province, Para Brazil. NCL Brazil 43-101 report7
Cuiú Cuiú – 2011 Developments • Maiden resource estimate released in April of 1.3Moz (mineable), 1.5Moz (geological) • Q3 - discovery of third mineralized zone at Jerimum Baixo, still open to east • Three new targets :- Central North; 39.6m @ 1.25g/t Central SE; 7.8m @ 8.44g/t 27m @ 6.94g/t Babi; results pending • Exploration drilling and step-out drill program. 21,000m completed to date from 25,000m program Aerial view of village of Cuiu Cuiu • Metallurgical work in progress – results expected Q1 20128
Cuiú Cuiú – a District Rather Than a Project Placer workings and soil anomalies Placer gold workings ? ? Gold in soil anomaly 17km in length Au in soils (ppb) Placer gold workings Jerimum Baixo ? ? Moreira Gomes deposit 0.7Moz Central deposit 0.6Moz9
Cuiú Cuiú Pau de Merenda 30m @ 1.1g/t, 47m @ 1.8g/t Central North Jerimum Cima 40m@ 1.3g/t 39m @ 5.1g/t Babi Central Jerimum Baixo Ivo Central SE 27m @ 6.9g/t, 8m @ 8.4g/t Miraboa West Miraboa Moreira Gomes10
Central – 1 of 3 Deposits so far at Cuiú Cuiú • Bulk tonnage, open pittable deposit • Inferred resources to date at Central total 17Mt @ 0.9 g/t gold (0.5Moz) + Indicated resources of 3.4Mt @ 1.0 g/t (0.1Moz) • Central deposit currently extends over approx. 1,000m strike and 450m depth Aerial view of Central deposit looking north • Deposit remains open at depth Outline of mineralized Stockwork mineralization on surface at Central zone at Central11
Central SE-NW section through Central Typical mineralized interval Central zone – hole CC-55-10, 2.15g/t Au Central Total Resources Au Contained Tonnage g/t Au Tonne x 1000 gpt oz. Indicated 3,400 1.0 100,000 Resources Inferred 17,000 0.9 500,000 Resources * Mineral resources are not mineral reserves and do not have demonstrated economic viability. Please note that all figures have been rounded to reflect their appropriate level of accuracy. * These resources are constrained by mineable shapes and cut-off grades to meet the requirement that resources must have reasonable prospects for economic extraction. The mineable shapes are either Lerch-Grossman pits or conceptual underground stopes. Resources falling within the pits are reported at cut-off grades12 of 0.3 gpt Au for fresh rock or 0.4 gpt Au for saprolite. Stope shapes only include blocks above a cut-off grade of 1.3 gpt Au. The cut-off grades consider a gold price of $1,250 per ounce and metallurgical recoveries of 91% for fresh rock and 66% for saprolite.
Central Area - Potential Drilling in progress Drilling in progress Central 600,000oz13
Moreira Gomes – Recent Developments • Bulk tonnage open pittable deposit • Inferred resources to date at MG total 14Mt @ 1.5 g/t gold (0.7Moz) • MG deposit extended additional 300m along strike to 1.8km • Recent drill results include 24m Aerial view of Moreira Gomes deposit looking north @ 4.06g/t gold from 40m E of hole 79, and 18m @ 0.46 g/t Moreira Total Resources Gomes gold from hole 122 drilled Tonnes Au Contained Au 400m E of hole 79 Tonne x 1000 gpt oz * Mineral resources are not mineral reserves and do not have demonstrated economic Inf. viability. Please note that all figures have been rounded to reflect their appropriate level 14,000 1.5 700,000 * of accuracy. These resources are constrained by mineable shapes and cut-off grades to meet the Resource requirement that resources must have reasonable prospects for economic extraction. The mineable shapes are either Lerch-Grossman pits or conceptual underground stopes. Resources falling within the pits are reported at cut-off grades of 0.3 gpt Au for fresh rock or 0.4 gpt Au for saprolite. Stope shapes only include blocks above a cut-off grade of 1.3 gpt Au. The cut-off grades consider a gold price of $1,250 per ounce and metallurgical14 recoveries of 91% for fresh rock and 66% for saprolite.
Moreira Gomes Area Jerimum Baixo Ivo target Moreira Gomes Guarim target Moreira Gomes area - aeromagenetic data, gold-in-soil geochemistry and structural interpretation15
Jerimum Baixo • Third discovery at Cuiu Cuiu • Open in several directions • Open to East • Will add to resource base16
Cuiu Cuiu Catalysts • 2011 drill program of 25,000m is currently 77% complete • Third mineralized zone at Jerimum Baixo identified • Strong indications of a fourth mineralized zone at Central North, Central SE and Babi. Additional results pending • Metallurgical work in progress • Drilling at Pau de Merenda, Central SE, Miraboa, Miraboa West and Ivo planned for early 2012 • Revised resource estimate planned for late Q2 / early Q3 2012 Jerimum Baixo discovery outcrop – sheeted / stockwork vein system17
Coringa – a Reminder • Good infrastructure: 20km east of main road and mains power • Existing high grade resource of 270,000 oz Ind. (1Mt @ 8.5g/t) + 100,000 oz Inf. (0.3Mt @ 9.3g/t) • Last resource estimate was completed in September 2009 and requires updating. • Scoping study of April 2010 gave a project IRR of 34% + NPV @ 5% of $41.3M @ $950 per oz • Scoping study based on 400t/d u/g mine prod. 36,000oz / yr. Capex of US$26.4M + op. cost of US$418/oz • NPV of US$82.5M and IRR is 59% @ US$1200 per oz18
Coringa 370,000oz resource confined to: Galena • Currently drilling with 3 rigs on deep Serra extensions to Serra and Meio and at Meio Come Quieto • Initial resource estimate based on 81 holes (8,750m). 73 holes and 14,091m completed since resource estimate Total Resources Au Contained Tonnage g/t Au Tonne x gpt oz. 1000 Measured and Indicated 982.3 8.53 269,450 Resources Inferred 327.1 9.34 98,224 Resources Assumes 2g/t Au cut-off, SG of 2.7t/m3 and minimum mining width of 1.5m19
Coringa – Upside • Recent soil sampling has identified Au in streams additional new and untested gold in soil anomalies • Updated resource estimate planned for Q1 2012. • Feasibility study planned to commence mid-late 2012 New zones Grab sample running 6g/t gold from surface 2.5km SE of Come Quieto21
Bom Jardim • Located 25km NW of Cuiu Cuiu along main Tocantinzinho trend, 15,385 ha • Historic placer gold production of 0.5 – 1Moz. No previous drilling. 500 soil samples and 200 rock samples collected by Magellan • Major structural intersection. Gold-in-soil anomaly 7km in length. Stockwork-style mineralization observed on surface • Air mag survey completed. Drilling in progress Placer gold workings at Bom Jardim22
Mato Grosso JV • Magellan has a 35% - 50% interest in 320,000ha of the Baixada Cuiaba gold belt in southern Mato Grosso • Excellent access with power and water. Flat terrain - cattle farming • The belt is characterised by an E-W Proterozoic fold and thrust schist belt extending 100km in length • Approx. 40 small open pit mines are currently in production. +100 abandoned open pits. Rocks have very low work index • Belt has potential to host several large low grade (0.5 – 1.0g/t) Au deposits • RC drilling program expected to start early 201223 Oregon pit, Pocone; approx 1km in diameter
Mato Grosso JV Cangas Pocone Oregon Beto Rondon Dei Ouro Fino Jonas Pocone area showing distribution of open pit Cangas area showing distribution of open pit gold mines along trend 4.8km SW of Pocone gold mines along trend 6km SW of Cangas24
Corporate Information Capital Structure Investor Summary Shares Issued and Share Price (Dec 31/11) $0.55 Outstanding 109.4 M Market Cap (Dec 31/11) 60 M Fully Diluted 117 M Avg. Daily Volume (3 months) 182,000 Cash (Dec 31/11) $7.6 M Shareholders Analyst Coverage Management 11% Mackie Research Institutions 45 % National Bank Newmont 2.5% Kinross 1%25
Further Information Alan Carter Jennifer Duthie President & CEO Corporate Communications Suite 1650 – 409 Granville St., Suite 1650 – 409 Granville St., Vancouver, BC, V6C 1T2 Vancouver, BC, V6C 1T2 Tel. + 1 604 676 5663 Tel. + 1 778 838 3990 Fax + 1 604 676 5664 Fax + 1 604 676 5664 email@example.com firstname.lastname@example.org Lawyers Auditors Morton & Company PricewaterhouseCoopers 1200-750 West Pender Street 700-250 Howe Street Vancouver, BC Vancouver, BC Canada V6C 2T8 Canada V6C 3S726
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