Timmins Gold Corp. (TSE:TMM)(AMEX:TGD) said Thursday it has extended its existing $18 million credit facility with Sprott Resource Lending Partnership.
new credit agreement will have a term of 18 months from July 29, and
interest will be payable at a rate of 8 per cent per year.
The extension is subject to final documentation, the company said.
Payment of the principal amount outstanding will be made at the end of the term, Timmins added.
consideration for the extension, a bonus payment of 2 per cent of the
principal amount of the loan will be paid in common shares of Timmins
Gold at a 10 per cent discount to the 10-day weighted average closing
price of the company's stock.
If the loan has not been repaid by
July 28, 2013, a further fee of 1 per cent of the outstanding amount on
that date will be paid to the lender in shares priced at the same
"The extension and repricing of our credit agreement
provides Timmins Gold with a strong financial base," said CEO of
Timmins, Bruce Bragagnolo.
"With cash from operations being
added to the balance sheet on a monthly basis even after paying for
expansion and exploration, the extension provides the company with
In April, Timmins reported record gold
production for its first quarter, despite downtime associated with a
three-stage, capacity improvement program at its Mexican mine.
gold producer, which generates revenue from its San Francisco gold mine
in Sonora, Mexico, said that for its fiscal first quarter that ended
March 31, it produced 21,532 gold ounces.
The company said the
gold recovery ratio was 69 per cent for the period. The recovery ratio
is defined as the ratio of gold ounces produced, divided by the number
of contained gold ounces stacked over a specific period.
Timmins said it also produced 11,740 ounces of silver during the quarter.
production was achieved even after roughly four days of downtime,
related to the completion of the first part of a three-stage capacity
The completion of the capacity improvements
are meant to take the mine to throughput of 32,000 tons per day (tpd) of
processed ore, and annual production of 130,000 ounces of gold
beginning in 2013.