Magellan Commences Scoping Study at Coringa and Expands Land Position at Agua Azul

VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 05/23/12 -- Magellan Minerals Ltd. (TSX VENTURE: MNM)(OTCQX: MAGNF) ("Magellan") is pleased to announce that it has contracted Global Resource Engineering Ltd. ("GRE") to complete an updated Preliminary Economic Analysis ("PEA") concerning its Coringa project in northern Brazil. This work follows the recent significant expansion of the resource base at Coringa (see press release dated 22nd March 2012) which resulted in an 108% increase in Measured and Indicated resources to 561,000oz of gold (3.17Mt @ 5.50g/t gold) and a 444% increase in the Inferred resources to 534,000oz of gold (5.51Mt @ 3.02g/t gold) using a 1g/t gold cut-off.

An earlier PEA completed by GRE in early 2010 (see press release dated 5th May 2010) was based on the resource defined in the October 2009, National Instrument 43-101 compliant technical report consisting of a Measured and Indicated resource of 830,460t @ 9.64g/t gold (257,388 oz) and an Inferred resource of 239,620t @ 11.86g/t (91,334 oz). This study indicated a robust Internal Rate of Return of 34%, a Net Present Value of US$41M (assuming a 5% discount rate and a gold price of US$950/troy oz) and a project payback period of 3.7 years.

The updated PEA is expected to be completed within the next 4-5 months and will contemplate an expanded mine production rate based on the most recent resource estimate of 22nd March 2012.

Separately, Magellan is pleased to announce that it has expanded its land position at the Agua Azul project located in the Carajas mineral province of eastern Para, by signing a binding Letter of Intent with Horizonte Minerals plc to acquire a 70% interest in an exploration license held by Horizonte. The agreement expands Magellan's current land position at the project from the current 11,458ha by an additional 1,553ha. It involves payments totaling $320,000 over 3 years including a $20,000 initial payment and exploration expenditures of $1,500,000 over the 3 year period to earn an initial 51% in the property. Magellan has a second option to expand its interest from 51% to 70% by completing a 43-101 compliant pre-feasibility study and paying Horizonte an additional $500,000.

The Agua Azul project previously produced several hundred thousand ounces of gold from artisanal workings in minor drainages and shallow surface workings. Magellan has recently identified a series of soil anomalies and exposed quartz veins up to 8m in width. Surface rock chip sampling has resulted in values that include 5.4m @ 17.46 g/t Au (approximately 4.8m true width) and 4m @ 15.1g/t Au from two separate artisanal pits on parallel structures 500m apart.

Magellan expects to identify drill targets at Agua Azul within the next two months.

This press release was reviewed by Dennis Moore, B.Sc., M.Eng., a member of AIG, AUSIMM, and the SEG, a qualified person in compliance with National Instrument 43-101.

Magellan Minerals (TSX VENTURE: MNM)(OTCQX: MAGNF) is a TSX Venture Exchange listed exploration and development company with two advanced gold properties in the Tapajos Province of northern Brazil. The Cuiu Cuiu project contains 100,000oz of gold in the Indicated category (3.4Mt @ 1.0g/t gold) and 1,200,000oz of gold in the Inferred category (31Mt @ 1.2g/t gold). The Coringa project contains Measured and Indicated resources of 561,000oz of gold (3.2Mt @ 5.5g/t gold) and Inferred resources of 534,000oz of gold (5.5Mt @ 3.0g/t gold).

This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.

News Release #2012-14

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

Contacts:

Magellan Minerals Ltd.

Alan Carter

President and CEO

604.676.5663
info@magellanminerals.com


Magellan Minerals Ltd.

Jennifer Duthie

Corporate Communications Manager

778.370.0519
Jennifer@magellanminerals.com
www.magellanminerals.com