Timmins Gold Corp. (TSE:TMM)(AMEX:TGD)(NYSE MKT:TGD) reported Wednesday that it has closed the amendment to its $18 million credit agreement with Sprott Resource Lending Partnership.
The news comes a day after the company reported record gold
production in its second quarter, despite downtime for the calibration
of a new and larger capacity tertiary crusher at its Mexican mine.
The gold mining and exploration company said that the amended credit
facility has a term of 18 months ending December 31, 2013, with interest
payable in monthly instalments at the rate of eight per cent per year.
Payment of the principal amount outstanding will be made at the end of the term.
In consideration of the extension, a bonus payment of 217,918 common
shares of Timmins Gold was paid, representing two per cent of the
principal amount of the loan at a price equal to a 10 per cent discount
to the company's five day weighted average trading price on the TSX.
If the loan is not repaid by July 5, 2013, a further fee of one per
cent of the loan amount outstanding on that date will be paid to Sprott
in common shares priced at the same discount on that date.
For the three months that ended June 30, the company, which produces
from its San Francisco gold mine in Sonora, Mexico, reported gold
production of 23,203 ounces, up more than 39 per cent from 16,676 ounces
a year earlier.
The company said it also sold 23,499 gold ounces, representing an over 30 per cent increase from the year-ago quarter.
During the most recent quarter, a total of 39,028 ounces of gold were
placed on the heap leach pads, compared to 31,150 ounces of gold during
the previous quarter, and 34,235 ounces in the second quarter of 2011.
Timmins said the number of gold ounces placed on the pads is expected
to increase during the rest of the year as the mine continues its
expansion. The gold miner maintained its production target for the year
on Tuesday, at 100, 000 ounces of gold.
The company processed average ore of 14,803 tonnes per day in the second quarter, up 8.7 per cent from the year-earlier period.
Average grades rose 4.9 per cent to 0.90 grams per tonne (g/t) gold,
while the gold recovery ratio came in at over 59.4 per cent.
In late 2011, the company published a technical report projecting
total gold production at San Francisco of 810,065 ounces from 2011 to
2017, with average annual production seen at approximately 130,000
ounces of gold from 2012 to 2017.
Focused solely in Mexico, Timmins's San Francisco project is an open pit heap leach operation.