Terra Mines focusing on Mexican interests

It’s out with the old and in with the new for Terra Mines (TSE), focusing attention on two gold projects in Mexico following the sale of its two Northwest Territories precious metal properties.

The company recently acquired the Amelia mine in the state of Sonora, on behalf of 49%-owned Compania Minera Canterra of Mexico. Production in 1988 is expected to be 9,200 oz gold, increasing to 22,000 oz in 1989 and thereafter, President Robert Evans says in the annual report.

An 80-ton-per-day heap leach recovery plant located on site has been upgraded to 100 tons and is being upgraded further to 500-ton capacity by June, 1988. “The mine is projected to generate sufficient cash flow to repay funds advanced by Terra during the first year as well as to fund other company activities in Mexico,” Evans says.

Drill-proven reserves of 345,000 tons grading 0.17 oz gold per ton exist in the West zone. The East zone has potential to increase reserves, but requires drilling.

Also in the state of Sonora is the Las Minitas joint venture project with Industrias Penoles S.A. De C.V. Previously thought of as an open pit heap leach project, this is now considered to have conventional mining and milling potential as well.

A high grade vein was identified late in 1987 when two drill holes 950 ft apart yielded intersections of 7.41 ft grading 2.85 oz and 9.15 ft grading 0.57 oz. Five out of nine drill holes in the section of the vein being explored returned values in excess of 0.1 oz. The vein is open on both ends and at depth, Evans says. He adds that feasibility studies will be completed early in 1989.

Back in Canada, Terra is disposing of its two precious metal properties in the Northwest Territories. The Bullmoose property east of Yellowknife has been shut down and sold for $40,000 and a 1% net smelter return royalty to a maximum of $1 million.

Durga Resources is buying Terra’s interests in the Camsell River area. The former silver mine located south of Port Radium has been on hold since low prices forced Terra to close operations in 1985. Durga has agreed to pay $200,000 and 1.5 million shares, plus warrants allowing purchase of an additional 400,000 shares at 50 cents per share for one year. Terra will hold 30% of Durga when the deal is completed.

Terra reported a net loss of $3,430,000 or 18 cents per share for 1987, compared to a loss of $13,939,000 or 89 cents per share in 1986. The 1986 results included a $12.5-million writedown related to the Bullmoose project. arrange placement