Terra signs deal on Mexican play

An agreement has been signed between Edmonton-based Terra Mines and a Mexican mining company called Industrias Penoles, S.A. de C.V. providing for joint exploration and development of a group of gold properties in Sonora, Mexico.

Under the terms of the agreement, Penoles must spend $484,000(US) inclusive of spending to date on the properties. Both companies must also roll the properties they hold in the area into a company to be incorporated and which will be controlled 60% by Penoles and 40% by Terra.

Terra holds approximately 15 properties in the Alamos area of Mexico, while Penoles holds some 11 properties near the town of Las Minitas.

Terra President Wilhelmus Kocken says geological work performed by Penoles to date on these 11 adjacent properties has determined the mineralized structures occur along the boundaries of a large tensional graber system within what appears to be a major resurgent caldron complex. About 48,000 tons have been removed from 20 surface trenches to a maximum depth of 12 ft.

So far, six holes of a 10-hole diamond drilling program have been completed for a total footage of 1,680 ft. Pilot heap-leach tests are also under way with initial results appearing to be favorable, says Mr Kocken.

Mineralized veins vary from two to 13 ft in width and mineralized stockwork zones locally are up to 66 ft wide. Mr Kocken says a conservative reserve estimate in probable, possible and inferred categories amounts to 5.2 million tons of 0.117 oz gold and 1.75 oz silver per ton.