Tuesday, 10 July 2012

Timmins Gold posts record gold production in Q2

Timmins Gold Corp. (TSE:TMM)(AMEX:TGD)(NYSE MKT:TGD) reported Tuesday record gold production in its second quarter, despite downtime for the calibration of a new and larger capacity tertiary crusher at its Mexican mine.

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 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.

The company said the calibration of the crusher in the quarter resulted in a finer crush size of 3/8 of an inch, which is designed to maximize recoveries.

The gold recovery ratio would have been higher, Timmins said, but for the fact that the crusher calibration caused a "substantial" amount of ounces to be placed on the leach pads toward the end of the quarter, which will not be extracted until the third quarter.

The recovery ratio is defined as the ratio of gold ounces produced, divided by the number of contained gold ounces stacked on the leach pads over that specific period.

Timmins Gold also produced 14,453 ounces of silver during the quarter.
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.

Base case life of mine cash costs were estimated at $633 per ounce, with a life of mine operating profit of $455 million.

Focused solely in Mexico, Timmins's San Francisco project is an open pit heap leach operation.

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