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Timmins Gold To Pour Gold in 2009

Timmins Gold Corp (TSX.V:TMM), a Canadian-based emerging gold mining company is planning to pour its first ounces at the end of 2009. The San Francisco gold mine is expected to pour its first gold in 2009 and produce 80,000 ounces of gold in 2010, Timmins Gold plans to increase production to 100,000 ounces annually if successful in its drilling of targets surrounding the main pit. Currently the pit has a mine life of 5 1/2 years at a projected average cash cost of US$412 per ounce.

The Company just closed the first tranche of a $10 million equity financing by issuing $2.5 million in units to Sprott Asset Management. A final US$20 million debt component is being organized by CPM Group, who is currently analyzing debt offers on behalf of Timmins. The Company expects to have all the necessary funds in place by the end of Q2 09.

The San Francisco project is located in the Arizona-Sonora desert in the northern portion of the Mexican state of Sonora, 2 km west of the town of Estación Llano, approximately 150 km north of Hermosillo and 120 km south of the United States/Mexico border along Highway 15 (Pan American highway).

The San Francisco project is comprised of two previously mined open pits (San Francisco and La Chicharra) together with heap leach processing facilities and associated infrastructure located close to the San Francisco pit. Geomaque Explorations mined the property from 1995 to 2000 during which approximately 13.5 million tonnes of ore at a grade of 1.13 grams per tonne gold was treated by heap leaching, and 300,834 ounces of gold were recovered. The low gold price caused the entire operation to be mothballed in 2001.

Timmins reached a deal to acquire 100% of the mine in 2007 and has conducted extensive drill programs around the pit area and has also conducted regional exploration.

There are no environmental, permitting, legal, title, taxation, socio-economic, marketing, or political issues which would adversely affect the estimated mineral resources.

According to company CEO Bruce Bragagnolo:

"Its important to bear in mind that we're almost finished the physical construction at the mine and much of the risk associated with construction has been removed. The gold plant has been refurbished, the primary crusher has been refurbished, and the construction of the secondary and tertiary crushers is almost complete."

"Subject to completing the financing, the first gold pour is scheduled to occur later this year, but that will be largely symbolic with the real production beginning in 2010. At current gold prices we are projecting good operating margins.

"After San Francisco is in production the plan is to use the cash flow to finance an extensive drill program to the northwest and southeast of the existing pit in an effort to add to the current resource. The crushing circuit has been designed to allow for the addition of a module that will increase process capacity to allow us to produce 100,000 ounces of gold annually."

Timmins has a portfolio of properties aside from the San Francisco mine that range in stages of development from grass roots to advanced stage.

Cocula Project, Jalisco, Mexico

The project closest to production after San Francisco is the Cocula Project located approximately 50 kilometres west of Guadalajara, Jalisco, Mexico. The Cocula Project is envisioned as a low cost, small scale producer which the Company believes can be in production as early as the end of next year.

Timmins Gold conducted a 26 hole, 1,974 meter reverse circulation drill program during the latter part of 2008, which yielded good gold and silver grades, such as:

• 1.30 g/t gold and 13 g/t silver across 37.5 meters from surface, including 9.40 g/t gold and 22 g/t silver across 4.5 meters;
• 1.22 g/t gold and 34 g/t silver across 4.5 meters, Hole RCC-03 which intersected 0.77 g/t gold and 10 g/t silver across 13.50 meters;
• 0.72 g/t gold and 8.7 g/t silver across 54 meters;
• 1.20 g/t gold and 13 g/t silver across 37.50 meters from surface;
• 1.41 g/t gold across 10.50 meters, and;
• 1.10 g/t gold and 17 g/t silver across 9 meters.

Tequila Property, Jalisco State, Mexico

The Tequila property, 30 miles north of the city of Tequila in Jalisco, Mexico, was acquired via option agreement during 2008. Since then the Company has conducted two drill programs with very strong results.

Highlights of the programs include

• 24.3 metres grading 5.88 grams per tonne gold;
• 13 metres grading 2.36 grams per tonne gold;
• 23.35 metres grading 1.83 grams per tonne gold.

Drilling to date has tested only 1/3 of the known strike length of the mineralized system. Of the 18 holes completed, 14 returned economic gold grades over appreciable widths. Five of the holes confirmed the continuity of the Veta Grande Vein over 350 meters of strike length.

Other Properties

Additional projects held by Timmins Gold include:
• TIM claims, a 40,000 hectare land package in the Penasquito area of Mexico. The claims are contiguous to the Penasquito Gold Deposit (Goldcorp) and are approximately 20 km to the northwest of the Camino Rojo project (Canplats Resources). As of June 2007, Goldcorp reported proven and probable gold reserves at Penasquito of 13.0 million ounces. Canplats Resources has reported a measured and indicated resource of 3.44 million ounces of gold and 60.7 million ounces of silver at its Camino Rojo project.
• El Capomo property, a 60,000 hectare block in Nayarit State, Mexico, approximately 50 kilometres east of Puerto Vallarta. More than 20 mineralized structures have been identified by previous operators. Sulphide mineralization with significant gold, silver, lead, zinc and copper values were encountered during the first phase surface sampling program. Selective grab samples have returned grades of up to 22.5 g/t gold and 1,860 g/t silver.
• El Picacho property, a 7,000 hectare property located 20 kilometers west of the San Francisco Mine along the principal trend of the mineralization. Timmins Gold controls over 70,000 hectares either proximate to or surrounding the San Francisco Mine and the Sonora-Mojave Megashear.

  El Picacho was acquired to assess the low grade, bulk tonnage potential of the property's known mineralization given the geological similarities and proximity to the San Francisco Mine. Due diligence sampling by the Company on the property returned encouraging results with grades ranging from 0.50 g/t gold to 4.0 g/t gold over 1.0 meter and with several samples grading in excess of 12 g/t of gold over 1 meter. The highest grade sample returned 21.946 g/t gold over 0.90 meters.

Timmins Gold is attractive for its near term cash flow from production, and its portfolio of precious metals projects, all located in mining friendly Mexico, and all 100% controlled by Timmins. Its just a matter of time before the market values the company based on its cash flow, as opposed to its resource holdings exclusively, as the price of the stock would seem to suggest right now.

SOURCE: http://www.midasletter.com/news/09040806_Timmins-gold-to-pour-in-2009.php

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