Magellan Minerals: Beating the Rush at the Tapajós - Interview with CEO Alan Carter

Alan Carter, CEO

By: Jordan Luy

The gold rush at the Tapajós region has been over for more than a decade, but that's not keeping Magellan Minerals (TSXV: MNM) from reaping the riches of the historic and storied grounds.

CEO Alan Carter and his company have made significant discoveries at the region in Northern Brazil, site of one of the largest gold rushes in history between 1978 and 1995. An estimated 20-30 million ounces of gold was produced by about a third of a million people, mostly from streams and rivers.

Today with all those miners gone and the easy gold exhausted, the region has become home to Magellan's prized properties and it was the appeal of exploring for gold in this specific land that led to its creation. The Tapajós is the world's third largest alluvial gold district. Yet Carter says the region is largely under-explored and points to two major reasons why.

"During that time it was very difficult for any systematic exploration work to be done by companies because there was just so many people in the areas where there was gold, making access very difficult," he says, referring to the 18-year gold rush period.

The other reason is that the mining law changed in 1995. Prior to that time, it was much more difficult for foreign companies to explore that part of the world. "The legislation wasn't as attractive for foreign companies to come in as it is today," Carter explains.

Junior mineral exploration and development company, Magellan Minerals was formed several years ago by Carter himself, Dennis Moore and Marcelo Pinto, all geologists. The management team had a lot of experience living and working in Brazil with Moore spending 15 years living and working in South America and Carter himself, having lived on the continent for 10 years.

This initial partnership would be the first of many for Magellan, a company built upon and pushed forward through business combinations and strategic partnerships.

Carter stresses the importance of this strategy for his company, especially in today's uncertain economic environment.

"We're attempting to capitalize on this current downturn in the exploration industry by getting together with other companies that have assets of interest which would mean there are significant synergies."

One such alliance is with Newmont Mining, a significant shareholder that also provides them with advanced technical support.

"We're a small company and so we don't have the technical depth that they obviously have. We maintain a dialogue with them and it's a good association, a good relationship."

Another significant relationship recently formed with the merger of Magellan with Chapleau Resources, another mineral exploration company in Brazil. Through this merger, the combined gold exploration and development company expands their land position to 840 km² in the Tapajós which is home to Magellan's prized Cuiú Cuiú property and Chapleau's key asset, Coringa.

While Magellan is always looking at opportunities elsewhere, their main focus continues to be Northern Brazil, a region that Carter admits doesn't possess as good an infrastructure as Southern Brazil, but still has its advantages.

"Water is definitely not a problem in this part of the world because it's a tropical zone." Another benefit to the location of their properties is easy access to small cities. Two major roads come through the area where they are situated and the local town, Itaituba, has daily flights to both Manaus and Belém which are two of the largest cities in Northern Brazil. From these two cities, there is access to major cities around the world.

"I can basically leave Vancouver and be on our project within 24 hours. That's the major advantage," Carter says.

In a competitive market, Carter knows that prosperous properties are just one of many things needed to achieve success. With the way Magellan values good partnerships and bonds, it's no surprise that this CEO emphasizes having a very good multi-disciplinary team as being integral. He describes this as having a team capable of financing the company through difficult times, getting the message out on the company, reaching as wide an audience as possible and a team with a track record of discovery.

He adds of course that, "Apart from the people, you need a strategy going forward to develop your company."

And while the current strategy of many companies today is to reduce budgets, explore less and conserve capital, all things that Carter admits Magellan is doing too, he says that he wouldn't be satisfied with this inactive approach alone.

"We believe we should get as much done as we can with less funds so that we can conserve capital as best we can but at the same time advance projects as rapidly as possible. We don't believe that doing nothing is the right strategy going forward."