Hot junior resource stock, small cap resource stock investment tips magellan minerals ltd v-mnm

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Magellan Minerals Ltd.(Symbol: V.MNM)
Company Name:	Magellan Minerals Ltd.
HQ Location:	Vancouver, British Columbia
Company Website:	http://www.magellanminerals.com/s/Home.asp
Shares Outstanding	76 Million
Closing Price (May 17, 2010)	$0.76
Market Cap:	$57.80 Million
Average Daily Volume	69,000

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Magellan Minerals Ltd. - Chart

Business Overview

Magellan Minerals Ltd (TSXV- MNM) is a Canada-based exploration-stage company focusing on the acquisition, exploration and development of gold and other precious and base metal properties in Tapajós region of Northern Brazil. The Tapajós region in Brazil is the world’s third largest alluvial gold province and is estimated to have produced 20-30 million oz of gold. + More info

What is interesting?

Magellan is an advanced stage gold exploration company focused on projects in the Tapajós region of northern Brazil. The Tapajos region of Brazil, world’s third largest alluvial gold province, is estimated to have produced 20-30 Million oz from streams between 1978 and 1995.
Magellan management is previously responsible for the discovery of the Tocantinzinho deposit of 2 million oz, located in the region. Hence management is very familiar with the geography of the area.
Newmont Mining and Kinross Gold are both significant Magellan shareholders. This is interesting as their interests is not tied to any back in right, but pure investments in Magellan which suggests they are seeing something of interest in this company.
Other institutional shareholders include Sprott Asset Management and AGF Metals.
Kinross, Eldorado and Newmont are active in the area.
Coringa–High grade vein district open in all directions. Initial 43-101 compliant resource of 0.37 Moz of which 73% is M & I. Recently released scoping study (May 2010) returned IRR of 34% and NPV of $41M (@5%. Further drilling in progress with potential for upside.
1. Diamond drilling (8,785 m) has defined >10 km of gold-bearing veins, of which only 1.8km have detailed drilling information
2. Operating cash cost of US$418/oz and payback period of 3.7 years
Cuiu Cuiu property (is 100% owned)–soil anomaly 12km in length. Currently drilling with 2 rigs. 56 holes completed to date including:-
1. 220m @2.02g/t Au at Central zone within stockwork
2. 39m @ 5.13g/t Au at Jerimum de Cima in sheeted vein system
3. 17.3m @ 13.69 g/t Auat Moreira Gomes in sheeted vein system
4. Initial resource estimate expected in Q4 2010
Just a few days ago, Brazauro Resources (V.BZO) having properties in the same region accepted a premium takeover offer from Eldorado gold with a 94% premium to the stock price. This shows that the area is hot and majors are ready to make a move if a junior shows good promise.
Well funded with $12 Million in cash to fund drilling programs over next 24 months.

Risks

Magellan is an early stage exploration company. The commercialization risks associated with gold mineral exploration and development are high and its prospects for discovering economically viable gold resources are uncertain. Gold prices can fluctuate and a decline in the gold prices could impact the share price of the company adversely. Early stage exploration companies typically needs significant amount of capital and although currently well financed, Magellan may still require additional financing. This could result in shareholders’ dilution.

Magellan Minerals Ltd. News

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