MNM

Magellan Minerals Ltd. (TSX VENTURE:MNM)(OTCQX:MAGNF) ("Magellan") is pleased to
announce an agreement whereby Magellan will grant Sandstorm Gold Ltd.
("Sandstorm") a 2.5% net smelter returns royalty ("NSR") on the Coringa gold
project ("Coringa") and a 1.0% NSR on the Cuiu Cuiu gold project ("Cuiu Cuiu")
both of which are located in Para state, Brazil. As consideration, Sandstorm
will provide an upfront cash payment of US$7.5 million and will subscribe for
one million shares of Magellan at a price of $0.50 per share. The share
subscription is subject to approval from the TSX Venture Exchange. 


As part of the agreement, Magellan has provided Sandstorm with a right of first
refusal on any future royalty or gold stream financing for both the Coringa and
Cuiu Cuiu projects.


This transaction follows the termination of the recently announced royalty
financing with Global Royalty Corporation (see press release dated 30th March
2012) regarding the Cuiu Cuiu project.


As part of the transaction, Magellan acquired the existing 2.5% royalty on the
Coringa project from the royalty holder on April 30, 2012 for total
consideration of US$2.7 million.  


"We are extremely pleased to have concluded this arrangement with Sandstorm
Gold, a company with a strong management team and existing assets in Brazil. The
agreement results in minimal shareholder dilution and allows us to advance
Coringa through a revised scoping study and feasibility, as well as continuing
to expand the resource base at Cuiu Cuiu," said Magellan President & CEO Alan
Carter.


About Coringa and Cuiu Cuiu 

The Coringa gold project is located in Para State, 20 kilometres east of the
BR-163 highway. Coringa is a narrow, high grade vein system extending over an
eighteen kilometre strike with significant exploration upside. Magellan released
a positive preliminary economic assessment on Coringa in May 2010, which is in
the process of being updated, and will commence a feasibility study in the third
quarter of 2012. 


Cuiu Cuiu is located 180 kilometres southwest of Itaituba in northern Brazil.
Exploration work has identified a series of major gold soil anomalies and
Magellan anticipates conducting a drilling program during the second half of
2012 with plans to release a revised resource estimate in Q1 2013.




---------------------------------------------------------------------------
Coringa - Total Resources (1)                                              
---------------------------------------------------------------------------
                      Tonnage (Mt)       Au Grade (g/t)    Contained Au (oz)
---------------------------------------------------------------------------
Measured                     1.15                  6.8              252,000
---------------------------------------------------------------------------
Indicated                    2.20                  4.8              309,000
---------------------------------------------------------------------------
Inferred                     5.50                  3.0              534,000
---------------------------------------------------------------------------
                                                                           
---------------------------------------------------------------------------
Cuiu Cuiu - Total Resources (1)                                            
---------------------------------------------------------------------------
                      Tonnage (Mt)       Au Grade (g/t)    Contained Au (oz)
---------------------------------------------------------------------------
Indicated                    3.40                  1.0              100,000
---------------------------------------------------------------------------
Inferred                       31                  1.2            1,200,000
---------------------------------------------------------------------------
(1) Mineral resources that are not mineral reserves do not have demonstrated
economic viability.                                                         



Dennis Moore, B.Sc., M. Eng., is the Qualified Person under NI 43-101
responsible for reviewing and approving the technical information contained in
this news release.


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 (3.35Mt @
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 #2012-12

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