Mr. Alan Carter reports

MAGELLAN ENTERS INTO DEBT SETTLEMENT AGREEMENT

Magellan Minerals Ltd. has entered into a debt settlement agreement with its single largest creditor, a provider of drilling services to Magellan in connection with the Coringa feasibility study.

The principal terms of the agreement are as follows:

• Magellan will issue 4,602,030 common shares to the creditor at a deemed price of 13 cents per share in full satisfaction of the total amount owing of 1,212,998.13 Brazilian reais (being $598,263.96, applying the agreed foreign exchange rate of 2.02753).
• The shares will be subject to a four-month hold period.
• Various conditions have been agreed between Magellan and the creditor concerning any sale of the shares by the creditor.
• The agreement is subject to TSX Venture Exchange approval.

We seek Safe Harbor.