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Terranova Minerals To Exploit Oxide Potential At 3Moz Manica Gold Project

Terranova Minerals (ASX: TNV), soon to be re-named Auroch Minerals, is set to begin an early stage exploration program in November on the 3 million ounce Manica Gold Project in Mozambique that the company recently acquired from Pan African Resources (AIM: PAF).

The project was acquired from Pan African with a JORC resource of 3,000,000 ounces of gold at 1.83g/t.

The exploration program aims to exploit the oxide potential of the Northern Shear Zone, where the oxide potential has already been confirmed by previous work including soil geochemistry, ground based magnetics and drilling.

A review of the historical information on the Northern Shear Zone, which is interpreted to extend for 40 kilometres, has highlighted the prospective nature of the zone for oxide material.

Previous metallurgical testing has confirmed oxide mineralisation to a depth of 60 metres.

Benjamin Bussell, chairman, commented: "The preliminary review of Manica's historical data has solidified the company's intention to delineate further oxide ounces along the Northern Shear Zone and to increase the project's substantial gold inventory.

"It is a great boon to the company that drilling will commence as early as November and is testament to the quality and enthusiasm of the incoming management team."

Terranova plans to undertake detailed surface mapping between the Guy Fawkes and Boa Esperança prospects, infill geochemical soil sampling between the Guy Fawkes and Boa Esperança prospects, and a diamond drilling program on the drill ready Guy Fawkes target.

Previous extensive ground magnetic surveys over the total strike length of the Northern Shear Zone support the interpretation that the mineralised structure is continuous between Guy Fawkes in the west and Boa Esperança to the east.

Previous drilling at Guy Fawkes has returned assays including 1 metre at 19.2 grams per tonne (g/t) gold and 1 metre at 15.52g/t gold.

Drilling at opposite ends of the shear, based on similar geological structural signatures, returned similar results, suggesting sound continuity along the shear.

Other cumulative intersections from previous drilling included:

- 4m at 7.08 g/t Au from 69m - MAC020

- 5m at 2.66 g/t Au from 51m - MAC042

- 10m at 2.27 g/t Au from 109m - MACD002

- 3m at 6.68 g/t Au from 24m - MACD015

The primary exploration target at Manica is the eastern extension of the Guy Fawkes prospect, which was previously held under a separate prospecting licence and as such, in comparison to the Guy Fawkes and Boa Esperança prospects, is relatively underexplored.

Earlier exploration programs did not include the Vinganca Mine area which is now also included in the drilling campaign scheduled over the next 12 months.

Free milling gold

Carbon in leach technology is recovering or has recovered gold at the Munhena and Monarch Mines, implying the occurrence of free milling gold in these ores in Mozambique.

Historical production at Guy Fawkes by artisanal miners also indicates free milling gold.

The Rezende and Red Wing mines in Mutare, located within the same shear zone structures, processed non-refractory ore, and there is a strong correlation between shear hosted banded ironstone formations and gold occurrences.

Strategic location

The Manica Gold Project is located in central Mozambique, approximately 270 kilometres by sealed highway from the port city of Beira on the Indian Ocean. The project is positioned in the Beira Corridor which contains major road and rail infrastructure linking Zimbabwe to Beira.

The area surrounding Manica is well known for hosting gold mines such as Penhalonga, Rezende, Monarch and Old West.

An estimated 2 million ounces of gold has been extracted from the Rezende Mine and surrounding deposits. Importantly, these are along strike extensions of the Manica Gold Project.


Terranova will hit the ground running at the newly acquired advanced Manica Gold Project with drill ready targets already identified.

The company is already ahead with half of the resource in the higher confidence Measured and Indicated categories, saving the company time and money.

Importantly, the 40 kilometre long Northern Shear Zone has already been confirmed as a host to oxide material to a depth of 60 metres.

The Northern Shear Zone, which passes through mineralisation at the Guy Fawkes through to the Boa Esperanza prospect, is where it is host to free milling gold.

Terranova's primary focus is on the exploration of this zone as a potential source of substantial additional free milling gold resources.


Manica Project covers 42 km² with potential 27km of gold strike. Only 2 kilometres of strike (8%) has been drilled to date. The current resources are open at depth and along strike.

The area surrounding Manica has a long history of gold production, hosting Penhalonga, Rezende, Monarch and Old West mines (produced over 2.5Moz of gold to date).

this is an advanced project with over $25m spent on exploration and development to date, with 21,941m of diamond core drilling and 13,595m of RC drilling.

For a company that just listed on the ASX in mid-late 2011, to have the tiller on an almost 3 million ounce JORC "pre-development" gold project is very rare in our experience. To be so lightly capped like Terranova is with issued capital of only 22.8 million shares is even rarer.

There are not many advanced projects of this size that find their way onto the market in past years. Either they change hands early on, or are evolved up the development curve at significantly greater cost.

Half of the resource is in the higher confidence Measured and Indicated categories, again this would have cost Terranova a significantly greater sum to drill to that level.

As Terranova (Auroch Minerals) moves through Manica acquisition approvals, Proactive Investors believes that based on a Post acquisition EV/Resource Oz of $4.54 vs listed peer average of $46.32, Terranova is significantly undervalued relative to ASX and Toronto-listed advanced African gold peers. We estimate that Terranova is worth closer to $0.60 - $0.75. The company provides a compelling buying opportunity at current valuation.

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