Terra high on gold project

With more than $5.6 million in working capital, debt-free Terra Mines of Edmonton is hoping its Las Minitas gold project in northwestern Mexico will get the company back on the right track. Terra, which has decided not to proceed to production at the Bullmoose gold property in the Northwest Territories, recently hosted an investor information forum in Toronto. Both President Robert Evans and Chief Financial Officer Garry Paulson talked about the company’s plans and answered questions.

The Las Mintas project is a joint venture with Industrias Penoles, S.A., with Terra holding a 40% interest. Penoles is near the end of a $484,000 exploration program on the property. A heap-leach operation is planned.

While no production decision has been made, a start-up rate of 5,000 tons per day is envisioned, which on an annual basis would net Terra 28,000 oz gold based on recovery rates of 75% and an average grade of 0.05 oz per ton. Operating costs are expected to range between $90(US) and $150 per oz. Proven reserves from the Las Minitas zone alone stand at five million tons; Terra reports that the Sobia zone may have greater potential for reserves.

At the company’s former producing (1970-85) Camsell River silver project in the Northwest Territories, Terra is doing an internal study on the cost of reopening the mine. According to Mr Smith, preliminary indications are that silver prices would have to exceed $12 for the mine to go back into production.

At the Bullmoose property, the company is making plans for the removal of equipment and facilities, which include a portable assay laboratory and a mill with a 300- ton-per-day capacity.

Terra, incorporated in 1965, currently has more shareholders living outside Canada than inside the country’s borders. Its stock was recently trading on the tse in the $2.45 range.

The company in 1986 incurred a $13.9 million loss, which included a writedown of the Bullmoose property and related deferred exploration and development costs totalling about $12.5 million.