Mato Velho is located in the state of Pará in northern Brazil and can be accessed by traveling 1070kms north from Cuiaba to the town of Novo Progreso, on the BR 163 which is largely paved. Mato Velho is located 60kms south of Novo Progreso and is accessed via a farm trail which heads northeast for 35kms from the BR-163.

Geology and Mineralization

Seven northwest-southeast striking shear zones with quartz veins have so far been identified and have strike lengths of up to 1.7km and cut acid volcanic rocks. The shear zones vary in width from 30  centimeters to several metres and are variably associated with pyrite and minor amounts of chalcopyrite and galena. The majority of the zones have not been explored or mined beneath the zone of oxidation.

Initial rock sampling over the area returned values of up to 198.5g/t Au and 2.13% Cu with soil sampling returning anomalous zones of between 90ppb and 757ppb Au.

Exploration Program

To date a total of 13 diamond drill holes totaling 1979.40 m have been drilled. This drilling has been successful in:

• Identifying the Lagresia structure which extends for at least 1 km and has encouraging gold values of up to 52.70g/t Au over 1.00m (9.0 to 10.0m) in drill core (DDH3).
• Identifying a significant silver component to gold mineralization in the southeastern extension of Lagresia. DDH13 intersected 35.50g/t Ag plus 0.14g/t Au over 1.00m (34.0 to 35.0m) and 34.40g/t Ag plus 5.54g/t Au over 0.70m (36.9 to 34.4m).
• Identifying the potential for further well mineralized vein structures as confirmed by hole DDH10, into the Cabeceira da Pista structure which returned 5.54g/t Au and 9.30g/t Ag over 0.70m (36.9 to 37.6m).
• Confirming gold mineralization of 1.20 g/t Au over 1.00 m (38.0 to 39.0 m) in DDH07 along the Vermelho vein structure and 1.44g/t Au over 1.00m (32.0 to 33.0m) in DDH12 along the Um vein structure.
• Defining at least four principal shear-hosted vein structures, Lagresia, Pista, Vermelho and Um for follow up. The possibility of infill drilling comprising a Phase 2 drill program is currently being reviewed.

A 3,140 line kilometer airborne magnetic, gradiometric and radiometric geophysical survey has also been completed over the Mato Velho and Coringa projects. Preliminary interpretations of the magnetic data confirm a 20km north-trending structural zone with which the current northwest trending Coringa and Mato Velho gold mineralized shear zones are closely associated. The significance of other northwest, northeast and east trending structures on gold mineralization is currently being investigated.

Magellan (through its local subsidiary) has an option to acquire a 100 % interest in the Mato Velho gold project.