100% Formation Metals (Silver/Gold/Lead/Zinc)
The El Milagro Project is located in the central plain of Tamaulipas State in Mexico. It lays along the furthest southern extensions of the Chihuahua trough, 60 kilometers northwest of the city of Tampico on the coast of the Gulf of Mexico. Alkaline dikes and sills along the caldera ring fracture carry semi-massive sulphide stockwork zones in altered intrusive rocks. Silver grades reach bonanza levels often in excess of 2 kilograms per tonne and combined lead-zinc grades usually exceed 10%.
The Company entered into a purchase option agreement in 1998 that was completed at year end February 28, 2003. The Company now has a 100% interest in the property. The primary target defined within the Milagro Concessions is the Santa Maria Vein, a 1-4 meter wide tabular subvertical NNE trending breccias vein that has been mapped over a strike length of 450 meters, with a lead-rich polymetallic assemblage and bonanza silver grades. This vein, localized along the footwall contact of a sericite altered dike, is cemented by a fine grained intergrowth of galena, sphalerite, pyrite, barite and manganese oxides. Silver grades in the sulphitic vein material have been reported in the range of 1.5 to 5.5 kg per tonne (Tschauder, 1988).
Silver values across the dike in the Santa Maria workings vary from 0.8 to 3.8 kilograms/tonne over 4 metres. Accompanying base metal values include lead assays ranging from 10.3% to 12.3% and zinc assays from 2.8% to 6.8%. Anomalous copper values are also associated with the mineralization. Mineralization is very low in arsenic, mercury and cadmium and only slightly elevated in antimony.
The Milagro Mine was a fortuitous and relatively recent discovery and as such it is probable that other silver-rich vein and replacement zones exist within the area covered by the Milagro and Santa Maria Properties.
During fiscal 2009, management was informed that the Mexican Government had intentions to establish a Protected Area (PNA) with the rank of Biosphere Reserve "Sierra de Tamaulipas" by the SEMARNAT -- National Commission of Protected National Areas (CONANP) located in the municipalities of Aldama, Casas, Gonzalez, Liera and Soto La Marina in the State of Tamaulipas. The El Milagro project lies within the PNA, and as such is subject to more stringent environmental impact studies in the event the project moves toward feasibility and production phases.
The Company intends to maintain the core land position while evaluating the impact the new PNA has on the property, as this does not preclude Minera Terranova from developing and mining the project. However, as the Milagro project has essentially been maintained in a "care and maintenance" status for a number of years, and in light of this new development regarding the PNA, an impairment analysis conducted by management resulted in a write down of the project for financial statement purposes amounting to $348,535 for the year ended February 28, 2009.
