Magellan grows Coringa in Brazil

Magellan Minerals (MNM-V, MAGNF-O) has bulked up its resources at its Coringa project in Brazil’s Para State.

The company says measured and indicated resources now tally 3.17 million tonnes grading 5.50 grams gold for 561,000 oz. of gold, while inferred resources come in at 5.51 million tonnes grading 3.02 grams gold for 534,000 oz. of gold. The estimates were done using a 1 gram per tonne gold cut-off grade.

The new totals back up the company’s bullishness on the project, as drilling has bolstered measured and indicated resources by 108%. The increase comes largely from recent intercepts on the lower portions of the three main orebodies at the site: Serra, Meio and Galena.

Inferred resources grew by an even greater amount, as in the three main zones they are up 273% thanks to step-out drilling growing the strike length by 3.8 km. When two other zones are considered beyond the three big ones, inferred resources actually grew by 444%.

In all Magellan now has a resource from five areas: Serra, Meio, Galena, Valdette and Demetrio.

All of the mineralized zones remain open at depth and along strike and the company says recently discovered gold-in-soil anomalies could bring more ounces down the road.

Coringa sits in the southeastern part of the Tocantinzinho Trend of western Brazil. The trend hosts Tapajos, which hosted one of the world’s largest gold rushes between 1970 and 1990.

Magellan describes the project as hosting a narrow, high grade, vein system, whose three main zones, Serra, Meio and Galena, extend over a strike length of 18-km.

A preliminary economic study done on the property prior to the latest resource update envisioned a mine being constructed for US$37.5 million that would mill at a rate of 400 tonnes per day to produce 36,000 oz. of gold per year with gold recoveries of 94%.

The company plans to have a feasibility study done by the end of the second quarter of next year. A positive construction decision shortly after that could result in a future mine reaching production by the beginning of 2015.

The project has good proximity to infrastructure as it sits 20-km east of a paved highway and power lines.

Midday in Toronto on March 22 the company’s shares were flat at 43.5¢ on a volume of just 2,000 shares traded. Fully diluted Magellan would have 117 million shares outstanding.