Magellan Releases Update on Coringa Gold Project Feasibility Study

Magellan Minerals Ltd. ("Magellan") is pleased to provide an update on its on-going feasibility study at the 100% owned Coringa Project in Brazil which recommenced in October 2014. Coringa is a steeply dipping high-grade narrow vein gold project located in Para, and is accessible from a major paved highway.

The Company has retained a group of leading engineering firms with extensive Latin American experience to complete the feasibility study, led by Ausenco Engineering Canada Inc. (Ausenco) who is responsible for the overall study compilation as well as process plant, site infrastructure, access road and electrical power supply aspects. Supporting this work is Snowden Mining Industry Consultants (Snowden), who is responsible for Resources, Reserves and underground geotechnical work for the mine plan which is being completed by Deswik Mining Consultants (Deswik). Kovit Engineering Limited (Kovit) is accountable for the design and costing of the tailings and backfill aspects of the project. Global Resource Engineering (GRE) is dealing with hydrogeology and the site water balance, and Terra Meio Ambiente (Terra) who has historically managed the environmental and permitting aspects for the site, are contributing to these areas in the study.

Highlights of recent progress are as follows:-

• Resources - the resource estimate has been completed by Snowden, leaving only final optimization of the inferred component to be finished
• Mine plan - Deswik is currently laying out the mine infrastructure and stope plan which will lead to the compilation of costs (by Snowden) and production schedules and the final reserve estimates (by Snowden).
• Geotechnical - Snowden has completed the geotechnical analysis incorporating the recently completed geomechanical test work. Results confirm the previous draft report, which indicated that ground conditions in both the country rock and vein are competent, and supportive of the proposed mine plan utilizing resue mining to reduce dilution. Spot bolting and screening will be utilized where local conditions require.
• Process Plant - the process plant design incorporates conventional crushing, grinding, gravity and CIL. The engineering to support the study has been 80% completed by Ausenco. Plant recoveries are expected to be approximately 96% based on recent test work.
• Environmental - Terra has completed their work on the environmental section of the study, which is currently being translated into English, and the conclusion is that no significant environmental issues are foreseen.
• Tailings - Kovit has completed testing for process tailings dewatering and rheology. The tailings behave very much as anticipated, they thicken well and when deposited readily consolidate to form a dense and stable deposit. The material lends itself to excavation for supplying backfill to the mine.
• Groundwater - GRE is making good progress on the groundwater modeling based on data recently collected on site, and will complete the site water balance, with inputs from the mill, tailings and mine general areas.
• Acid rock drainage - all geochemical samples are in the lab and long duration testing of waste rock and tailings for ARD reaction kinetics, will commence soon and continue through the permitting stage. No issues of concern are expected in this area.
• Power supply - Ausenco has completed the analysis of the electrical supply, which indicated building an overhead transmission line to connect to national grid power is the preferred option over diesel generators at site. The engineering of the transmission line to support the study has now been completed.
• Site Layout and Camp - The general site layout is 90% complete and includes providing a new camp facility 3 km from the plant site. The existing exploration camp may be used for temporary construction housing.
• Financial Model - work is ongoing in all areas on capital and operating costs, and input parameters for the financial model are being confirmed. Preliminary work in this area is expected to be complete by mid-March.

The overall feasibility study is now approximately 75% finished with completion of a draft report scheduled for the end of March, and the final report expected in mid-April.

John Kiernan P.Eng, Magellan's VP Project Development and a "qualified person" within the definition of that term in NI 43-101, has reviewed the technical information contained in this news release.

Source: http://www.magellanminerals.com/