Thursday, 29 March 2012

Timmins Gold profits rise, on higher gold production and sales

Mexico-focused Timmins Gold Corp. (TSE:TMM) said Thursday that metal revenue jumped 49 percent in the nine months ended December 31, as the company produced and sold more gold.

The company, whose period ended December 31, said earnings rung in at $20.8 million, or 15 cents a share.

Metal revenues grew 49 percent to $90.8 million from $61.1 million in the same prior year nine month period as average gold prices in the period were $1,599.

Gold production went up 18 percent to 55,487 ounces of gold. It sold 56,777 ounces of gold during the latest period up from 47,031 ounces last year.

Production costs rose to $608 per ounce compared with a year-earlier figure of $526 per ounce. The average realized gold price was $1.599 per ounce.

In a statement, Timmins Gold chief executive Bruce Bragagnolo, said: "2011 was an extremely successful year for the company on several fronts. The company aggressively reinvested cash flow from operations in a highly successful drill program over the previous 18 months, resulting in a 71 percent increase in the proven and probable reserves, along with an expansion of the crushing unit from 12,000 to 18,000 tonnes per day."

The company said it will carry on to self fund further expansions over the ensuing year to 32,000 tonnes per day, which will bolster production to about 130,000 gold ounces a year.

In addition, the company wrapped up a drill program of 205,000 metres which increased measured and indicated resources to 1.57 million gold ounces and inferred resources to 1.35 million ounces of gold, it added.

The Mexican-focused miner also said on Wednesday it purchased an extra 700-hectares at La Chicharra for leach pad expansion and received permits for the expansion.

Last November, the company filed an updated technical report for its San Francisco gold mine located in Sonora, Mexico.

Total proven and probable NI 43-101 mineral reserves at San Francisco were 72.4 million tonnes at a grade of 0.572 grams per tonne gold with 1.3 million contained ounces. The mineral reserves are based on a gold price of $1,100 per ounce.

Amongst the highlights of the report, total gold production was projected at 810,065 ounces from 2011 to 2017, with base case life of mine cash costs of $633 per ounce and a life of mine operating profit of $455 million.

Timmins Gold, which owns the past producing San Francisco gold mine in Sonora, Mexico, has forecast production at a rate in excess of 100,000 ounces of gold per year.

Shares of Timmins Gold closed Wednesday at $2.33 apiece in trade on the Toronto Stock Exchange.

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