July 2011

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July 2011

  1. 1. Building Gold Resources in Brazil’s Tapajos Region July 2011 TSX-V: MNM | www.magellanminerals.com
  2. 2. 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, diamond, 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
  3. 3. Why Invest in Magellan? • 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. Management is previously responsible for discovery of the nearby Tocantinzinho deposit (2.5Moz), now owned by Eldorado Gold • Projects: two organic, grass roots gold discoveries so far - and building… • Cuiu Cuiu – 1.3Moz gold resource (100,000oz indic + 1.2Moz inf), drilling with 3 rigs • Coringa – 370,000 oz 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: $20.5 M in treasury – Q2, 20113
  4. 4. Proven Management Team • Jim Stypula, Chairman – previously CEO of Chapleau Resources, financier with 20 years experience in mineral exploration. Founding director of Far West Mining • Alan Carter, B.Sc., Ph.D., President & CEO, Director – 20 years of experience. Former Exploration Manager for Rio Tinto and Business Dev. Manager at BHP Billiton. Director and co-founder of Peregrine Diamonds and Peregrine Metals. Raised +$100M in capital for mining and exploration companies since 2004 • Dennis Moore, B.Sc., P.Eng., VP Business Development, Director – exploration geologist with 27 years experience, half of it in Latin America. Responsible for discovery of the Tocantinzinho deposit, now owned by Eldorado Gold • Paul Hansed, C.A., B.A., Chief Financial Officer – 20+ years of accounting and finance experience including 19 years with KPMG in Canada and Europe. CFO of Magellan Minerals since March 2008. • Guillermo Hughes, B.Sc., P.Eng., M.Sc., - Chief Geologist – 26 years experience in the mineral exploration industry including experience in Argentina, Peru and Brazil • Derek White, B.A., Director – currently Executive VP Bus. Dev. of Quadra Mining and with 20+ years financial experience in the mining and metals industry. He worked for Impala Platinum Ltd, Gencor and Billiton, where he was CFO of the Base Metals Division • Mario Szotlender, Director – former CEO of Rusoro Mining, Director of Endeavour Silver and Radius Gold. 20 years experience financing and managing companies in Latin America4
  5. 5. The Tapajos : World’s third largest placer gold belt • Site of the world’s largest ever gold rush from 1970’s to 1990’s • Largest alluvial gold province in Brazil, third largest alluvial gold province in world – previous production from streams estimated at 20-30 Moz of gold • Geology is similar to other prolific gold belts (e.g. Eastern Canada, Western Australia). World-class potential • Under-explored province. One mid-size deposit discovered so far: Tocantinzinho (2.5 Moz) • Kinross, Eldorado and Newmont are active. Eldorado acquired Tocantinzinho for $122M during mid 2010. Eldorado also spent $5M on a 27% stake in Serabi Mining in 20105
  6. 6. Key land position in competitive belt6
  7. 7. Cuiú Cuiú’s Relation to Tocantinzinho • Cuiú Cuiú is one of the two Cuiu Cuiu largest historic garimpeiro gold 2Moz from streams +1.3Moz resource producers in the Tapajós* to date • Tocantinzinho deposit is 1.5 km (2.5Moz resource) long and produced an est. Tocantinzinho 0.2Moz from streams 200,000oz of gold from 2.5Moz resource artisanal surface workings ** • Cuiú Cuiú is 12 km long and 25 km NW of Tocantinzinho and produced 2Moz from streams • Eldorado’s PFS complete with an 11.8% IRR. A FS is the next step. Will make a construction decision by the end of 2011 * Source : DNPM ** Source: Melho, R. 2007. A preliminary assesment of the Tocantinzinhop gold project, Tapajos gold province, Para Brazil. NCL Brazil 43-101 report7
  8. 8. Cuiú Cuiú • 1.2 Moz of Inferred resources and 0.1 Moz of Indicated gold identified to date at Central and Moreira Gomes at grade of 1.2g/t • 470 Sq km concession, 100% owned • 12 km long gold-in-soil anomaly based on 10,000 soil samples • 25,000m of drilling planned for 2011, 3 rigs currently operating Aerial view of village of Cuiu Cuiu8
  9. 9. Cuiú Cuiú – a district rather than a project Placer workings and soil anomalies Placer gold workings Au in soils (ppb) Placer gold workings Moreira Gomes deposit 0.7Moz Central deposit 0.6Moz9
  10. 10. Cuiú Cuiú….1.3Moz and counting10
  11. 11. Central – 1 of 2 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 • Deposit remains open to north, south and at depth Aerial view of Central deposit looking north • Additional drilling is in progress Outline of mineralized Stockwork mineralization on surface at Central zone at Central11
  12. 12. 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.
  13. 13. Central – potential extensions Untested soil anomaly New soil anomaly to SE of Central 3D and map views of Central body and gold–in-soil anomaly13
  14. 14. Moreira Gomes – 5km from Central • Bulk tonnage open pittable deposit • Inferred resources to date at MG total 14Mt @ 1.5 g/t gold (0.7Moz) • MG deposit currently extends over approx. 1,500m strike and 350m depth • Deposit remains open to east and at depth. Potential for parallel structures currently being tested, e.g 7.5m @ 18.8g/t gold Aerial view of Moreira Gomes deposit looking north • Drilling currently in progress14
  15. 15. Cuiú Cuiú – Moreira Gomes Map shows airborne magnetic data, grade contours, and drill hole locations Drill Moreira Total Resources targets Gomes Au Contained Tonnage g/t Au Tonne x gpt oz. 1000 Inferred 14,000 1.5 700,000 Resource * 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-off15 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 metallurgical recoveries of 91% for fresh rock and 66% for saprolite.
  16. 16. Cuiú Cuiú – Moving forward in 2011 • Drilling with four rigs (25,000m program) – extensions to MG and Central. Also drilling at J Baixo, J Cima, Babi, Miraboa and Miraboa W targets • Metallurgical test work • Follow up of other areas with extensive alluvial gold workings to NW and E • Updated resource estimate by end 2011 Drilling at Central16
  17. 17. Coringa • 0.3 Moz of Indicated resources and 0.1 Moz of Inferred gold identified within three zones, Serra, Meio and Galena – average grade of 9g/t gold • PEA returned NPV of US$82.5M and IRR is 59% @ US$1200 per oz • 1.8km of 10km of structures drilled in detail to date. Recent soil sampling suggests potential for additional +7km of untested structures • 235 sq km concession, 100% owned • 10,000m of drilling (3 rigs) planned outside existing resources for 201117
  18. 18. Coringa – excellent infrastructure • Located 200km SE of Cuiu Cuiu • Magellan controls 23,500 ha at Coringa and has a ROFR on surrounding 180,000 ha • Located 65km SE of town of Novo Progreso, 21km E of main BR-163 • Mains power (138kv line) occurs 21km to west of project • Ease of permitting due to municipal zone designation18
  19. 19. Coringa – largely untested • Sub-vertically dipping quartz veins within volcanics and granites • Diamond drilling (11,000m) has Valdette defined >10 km of gold-bearing veins, of which only 1.8km have detailed drilling information • Resource identified in three high grade zones: Galena, Serra, Meio • Vein system is open in all directions Demetrio • Two new zones discovered recently: Valdette and Demitrio 370,000oz resource confined to; • Currently drilling with 3 rigs Galena Serra Meio 0 1km19
  20. 20. Meio Block – consistently high grades Drill plan20
  21. 21. Coringa – Resource Estimate Assumes 2g/t Au cut-off, SG of 2.7t/m3 and minimum mining width of 1.5m Resource represents less than 20% of vein system discovered to date. Raising the cut-off grade to 5 g/t gold results in a M&I resource of 0.563 Mt @ 12.37 g/t gold (223,914oz) and an inferred resource of 0.178 Mt @ 14.65 g/t gold (83,873oz) on a diluted basis21
  22. 22. Coringa – Scoping Study • Scoping study indicates a project IRR of 34% and an NPV @ 5% of $41.3M assuming $950 per oz • Based on 400t/d cut and fill underground mine producing 36,000oz / yr. Processing via crushing and CIL circuit • Initial Capex of US$26.4M. Operating cash cost of US$418/oz and payback period of 3.7 years Coringa Camp • Process recovery = 93.8%. Actual recoveries at Serra and Meio are 99.0% and 97.7% respectively • NPV @ $1200 per oz is US$82.5M and IRR is 59% Mineralized intercept DDH22 62 Meio zone
  23. 23. Coringa – Upside • Recent soil sampling has identified two major new and untested gold in soil anomalies Valdette • 10,000m drill program began March 2011 & is Drilling in aimed at expanding progress resources • Recon. work in progress on other gold drainage anomalies and showings Demetrio Grab sample from surface 2.5km SE of Come Quieto Come Quieto Sur23
  24. 24. Coringa – Upside • Recent soil sampling has identified two major new and untested gold in soil anomalies • 10,000m drill program began March 2011 & is aimed at expanding resources • Recon. work in progress on other gold drainage anomalies and showings Demetrio Drilling in progress Grab sample from surface 2.5km SE of Come Quieto Come Quieto Sur24
  25. 25. Coringa – Moving forward in 2011 • Drilling with two rigs (10,000m program) outside existing resources • Follow up sampling of other target areas on project, e.g. Sal, Pista, Jatoba, Come Quieto Sur • Updated resource estimate by end 2011 • Commencement of feasibility study – early 2012 Drilling at Coringa project25
  26. 26. Mato Grosso JV • Magellan has acquired 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. 20 small open pit mines are currently in production. +100 abandoned open pits • Belt has potential to host several large low grade (0.5 – 1.0g/t) Au deposits Oregon pit, Pocone; approx 1km in diameter26
  27. 27. Corporate Information Capital Structure Shares outstanding 109.4M Options 7.7M Major shareholders Analyst Coverage Warrants 8.8M Management 11% National Bank Financial Fully Diluted 127.4M Institutions 45% Shane Nagle Cash $20.5M Newmont 2.5% Mackie Research Market Cap. $155M Kinross 1% Dale Mah Recent Financings Closing No. of shares Price Warrants Amount Feb 2008 (IPO) 11M $1.00 expired $11M Dec 2009 18.3M $0.70 ½ @ $1.00 $12.8M June 2010 10M $0.75 none $7.5M Oct 2010 19.2M $1.20 none $23M27
  28. 28. 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 alan@magellanminerals.com jennifer@magellanminerals.com Lawyers Auditors Morton & Company PricewaterhouseCoopers 1200-750 West Pender Street 700-250 Howe Street Vancouver, BC Vancouver, BC Canada V6C 2T8 Canada V6C 3S728

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