Magellan Minerals Ltd. Announces $20 Million Bought Deal

Vancouver, British Columbia -- (Marketwire - Oct. 6, 2010) - Magellan Minerals Ltd. (TSX VENTURE: MNM) –

THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES.

Magellan Minerals Ltd. ("Magellan Minerals") is pleased to announce that it has entered into an agreement with a syndicate of underwriters led by Scotia Capital Inc. pursuant to which the underwriters have agreed to purchase 16,700,000 special warrants (the "Special Warrants") of Magellan Minerals on an underwritten private placement basis, at a price of $1.20 per Special Warrant (the "Issue Price") for aggregate gross proceeds to the Company of approximately $20 million. Each Special Warrant shall entitle the holder thereof to receive, without payment of additional consideration, one common share (each a "Common Share") of Magellan Minerals.

The Underwriters will have the option, exercisable in whole or in part, to arrange for the purchase of up to an additional 2,500,000 of the Special Warrants sold under the Offering at the Issue Price. The offering is scheduled to close on or about October 29, 2010.

The Corporation will use its reasonable best efforts to file a short form prospectus with the applicable regulatory authorities in each of the provinces of Canada where Special Warrants are sold and obtain a receipt for a final short form prospectus within 30 days of the closing for the purpose of qualifying the Common Shares issuable upon exercise of the Special Warrants. If a receipt for a final short form prospectus is not obtained within 30 days of the closing the special warrants will be exercisable into 1.1 common shares instead of 1 common share.

All securities issued in connection with this financing will be subject to a four-month hold period unless and until a receipt is issued for the final prospectus.

The net proceeds of the offering will be used to fund exploration and development of Magellan Mineral's mineral projects and for general working capital purposes.

Completion of the offering is subject to a number of conditions including completion of satisfactory due diligence investigations and receipt of all necessary regulatory approvals.

The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States or to, or for the account or benefit of, any person in the Unites States absent registration or an applicable exemption from registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful.

The common shares of Magellan Minerals are listed on the TSX Venture Exchange under the trading symbol of "MNM".


Notice to Readers

Certain forward-looking statements are made in this news release, including statements regarding possible future business, financing and growth objectives. Investors are cautioned that such forward-looking statements involve risks and uncertainties detailed from time to time in the Company's periodic reports filed with Canadian regulatory authorities. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. Magellan Minerals does not undertake to update any forward-looking statements, oral or written, made by itself or on its behalf.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.



For more information, please contact

Magellan Minerals Ltd.
Alan Carter, President and CEO
604.676.5660
or
Magellan Minerals Ltd.
Ian Gendall, COO
604-676-5660
info@magellanminerals.com
www.magellanminerals.com