Timmins Gold secures $18m replacement facility with Sprott Resource

Timmins Gold Corp. (TSX:TMM) said Monday that it has restructured and replaced its prior gold-linked notes from Sprott Asset Management with a new C$18 million credit facility from Sprott Resource Lending Partnership.
The new credit agreement has allowed the company to re-pay the existing requirement to deliver 8,335 ounces of gold, and has provided a further C$5.6 million in working capital, Vancouver-based Timmins said.
Under the terms of the new loan, a lump sum payment of principal is due in 14 months, with interest paid at the rate of 1% per month.
"The new credit agreement allows us to freely realize current gold prices on our production, and provides a strong financial base for further exploration and production expansion programs at San Francisco," said CEO Bruce Bragagnolo.
Indeed, the company is focused on increasing production at its San Francisco mine in Sonora, Mexico, as it expands its existing crusher system to 18,000 tonnes per day, expected by the end of July.
In addition, a drill program at the site is ongoing, results of which will be included in an updated resource estimate in the near future, Timmins said.
As a result of the new agreement, Timmins will not be proceeding with the $15 million credit facility announced in March, and has issued 301,933 common shares to Sprott Resource in connection with the replacement facility, and the cancellation of the $15 million loan note.
Focused solely in Mexico, Timmins Gold's San Francisco mine is a past-producing open pit heap leach operation, and has forecast production at a rate in excess of 100,000 ounces of gold per year, at a cash cost of U.S. $489 per ounce.