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Timmins Gold Corp. (TSX-V:TMM - News) ("Timmins" or
the "Company") is pleased to report to shareholders on its
operating and financial results for the three and six month periods ending
September 30, 2010. All currency in this report is in Canadian dollars unless
otherwise indicated.
The major highlights for the three
months ended September 30, 2010, which was only the second quarter of commercial
operations at the San Francisco Mine, include the following:
Second Quarter Highlights
-- Positive Cash Flow from Operations of US$5.86 million or US$0.04 per
share for the three months ended September 30, 2010, as compared to
US$3.65 million or US$0.03 per share for the previous quarter;
-- Direct operating costs per recoverable ounce for the three months ended
September 30, 2010 were US$612 (C$636) compared to US$857 (C$881) for
the previous quarter and by September this cost measure had fallen to
US$472 (C$488) per recoverable ounce;
-- Cash production cost of sales, net of byproduct credits, were US$606
(C$630) per ounce for the three months ended September 30, 2010 compared
to US$683 (C$702) for the three month period ended June 30, 2010;
-- Net income after tax for the quarter ended September 30, 2010 was C$3.6
million or C$0.03 per share compared to a loss of C$0.8 million or
C$(0.01) per share for the previous quarter;
-- Tonnes of ore placed on leach pads for the three months ended September
30, 2010 totaled 1,090,768 at an average grade of 0.817 grams per tonne,
an increase of 20.5% and 13.8%, respectively over the prior quarter. In
total 28,655 ounces of gold were placed on the leach pads or 37.1% more
ounces than were placed on the leach pads in the April to June, 2010
quarter;
-- Gold sales for this fiscal quarter were 15,690 ounces representing an
increase in gold sales of 39% over the prior quarter; and
-- Total direct mine operating cost per tonne of ore under leach fell to
$11.28 per tonne for the quarter ended September 30, 2010 versus $13.67
per tonne during the first quarter, a decrease of 17.5%;
Bruce Bragagnolo,
CEO of the Company, in commenting on the results for the Company's second
ever quarter of operations at the San Francisco Mine said, "We are
delighted with the Mine's performance during the three months ended September
30, 2010. The Mine's performance is on target as we ramp up to full production
at an anticipated rate of 9,000 ounces of gold per month at a cash cost of
US$412 per ounce. We achieved or surpassed all our production targets and saw
continuing increases in all operating metrics, including mine production, ore
deposited on leach pads, gold recovery and gold and silver sales. We are also
very pleased with the exploration efforts this year in the vicinity of the
San Francisco Mine which we anticipate will result in ongoing increases in
reserves and an extension of the mine life. None of this could have been
attained without the dedicated performance of the management and operations
team in Mexico."
"We are restating our first quarter
financial statements to reflect the amortization of our strip ratio over the
life of the mine rather than accounting for it in the quarter it was
incurred. This treatment is more reflective of industry practice. The net
result of the restatement is a material reduction in cash costs for the first
quarter ended June 30, 2010." The restated numbers are shown above.
CONSOLIDATED RESULTS
For the three months ended September 30,
2010, Timmins reported a net income after tax of $3,634,855 or $0.03 per
share on revenue of $20.3 This compared to a net loss of $561,999 million or
$(0.01) per share during the three months ended September 30, 2009, a period
during which commercial operations at the San Francisco Mine had not yet
commenced. The financial performance of the Company benefitted from continued
strong gold prices and a successful and increasing operating performance at
the San Francisco Mine. During the second quarter ended September 30, 2010,
cost of sales was $10.1 million. General and administration costs were
$1,138,247 in the second quarter of 2010 compared to $926,839 during the
second quarter of 2009. Depreciation and amortization charges in this quarter
were $2,374,001 compared to $15,144 in the comparable quarter last year.
Other expenses during this quarter consisted primarily of the interest
expense, mostly attributable to interest on the gold loan, of $2,039,677, a
loss on the embedded derivative in the gold loan of $239,512 and foreign
exchange losses, net of interest income, of $234,887.
As a result of the foregoing factors,
net income before taxes was $3,480,996 for the second quarter of 2010
compared to a loss of $561,999 for the second quarter of 2009. For the three
months ended September 30, 2010, net income, after taxes, was $3,634,855
million or $0.03 per share compared to a net loss of $561,999 or $(0.01) per
share for the three month period ended September 30, 2009.
For the six month period ended September
30, 2010, the company reported net income after tax of $2,806,204 or $0.02
per share on sales of $34,655,414. This compares to a six month loss of
$1,366,329 for the comparable six months of the previous year. There were no
metal sales in the comparable six month period of 2009.
The remaining third party debt
obligation of the Company is the gold loan which was used to complete the
commissioning of the mine. During the quarter two out of the twelve scheduled
monthly repayments were made which totaled 3,334 ounces of gold with a gross
value of US $4.3 million. At the end of the quarter the Company had $4.0
million cash on hand compared to cash on hand of $2.7 million on March 31,
2010.
THE SAN FRANCISCO MINE
The table below illustrates certain key
operating statistics for the first two operating quarters for the San
Francisco Mine. Comparable figures are not presented for the prior year
because the mine was not in operation at that time. The reduction in total
material mined was due to ongoing issues with blast drill rigs. The addition
of two new blast drill rigs has increased total material mined and as a
result daily crusher throughput for the month of November has averaged 14,000
tonnes per day.
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April to June July to September
Quarter 2010 Quarter 2010
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Total material mined (000s mt) 5,091 4,969
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Ore to leach pad (mt) 905,296 1,090,768
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Ore to pad per day (mt) 9,948 11,856
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Ore grade-Au (g/t) 0.718 0.817
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Total ounces to leach pads 20,904 28,655
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Au ounces sold 11,290 15,690
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Ag ounces sold 6,741 8,500
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ABOUT TIMMINS
Focused in Mexico, Timmins Gold Corp.
became a gold producer in April 2010 with the commencement of commercial
production at its wholly owned San Francisco Mine in Sonora, Mexico. In
addition, the Company has an extensive portfolio of gold projects in Mexico.
This News Release contains
forward-looking statements. Forward-looking statements are statements which
relate to future events. In some cases, you can identify forward-looking
statements by terminology such as "may", "should",
"expects", "plans", "anticipates",
believes", "estimates", "predicts",
"potential", or "continue" or the negative of these terms
or other comparable terminology. These statements are only predictions and
involve known and unknown risks, uncertainties and other factors that may
cause our or our industry's actual results, level of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance, or achievements expressed or implied by these
forward-looking statements.
While these forward-looking statements,
and any assumptions upon which they are based, are made in good faith and
reflect our current judgment regarding the direction of our business, actual
results will almost always vary, sometimes materially, from any estimates,
predictions, projections, assumptions or other future performance suggestions
herein. Except as required by applicable law, Timmins Gold does not intend to
update any forward-looking statements to conform these statements to actual
results.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the policies of the
TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of
this release.
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