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Thursday, 8 November 2012
Timmins Gold Corp triples earnings, revenue up 48% on record gold production
Precious metals producer Timmins Gold Corp. (TSE:TMM)(NYSE MKT:TGD)(AMEX:TGD) saw another strong quarter as it tripled its earnings per share, with metal revenues rising 48 per cent.
For the three months that ended September 30, the Mexico-focused gold producer reported earnings of $13.1 million, or 9 cents per share, compared to $3.6 million, or 3 cents per share, a year ago.
Profit from operations at its San Francisco gold mine in Sonora, Mexico was $18.3 million, compared to $10.3 million during the same prior year period.
Metal revenues rose 48 per cent to $41.7 million, as the miner sold significantly more gold and silver.
Gold ounces sold totaled 25,153, up from 16,917 a year earlier, while silver ounces sold amounted to 13,857, from 8,640 in the third quarter of 2011.
Indeed, the Canadian company produced a record 25,153 ounces of gold, up 46 per cent from a year ago.
Modifications to the existing crushing circuit, changes in Timmins' blasting patterns and optimization of its heap leaching process led to the stronger production results, which were previously announced in October.
The gold miner maintained its production target of 100,000 ounces of gold for the year.
Cash flows from operations, an important metric in the industry as an indicator of a company's ability to fund future operations, were $14.5 million, 85 per cent higher than $7.8 million in the prior year period.
"Q3 was a strong quarter operationally as demonstrated by increased profit from operations," said CEO Bruce Bragagnolo.
"The company is realizing significant free cash flow and it continues to fund all of its operations, expansion and drilling from existing cash flows.
"The company believes it is well positioned to continue realizing current gold prices, generating strong margins and increased cash flow from operations."
Average realized gold price per ounce was $1,660 in the latest period, down from $1,702 an ounce a year ago, with total by-product cash costs higher at $715 per ounce, up from $580 a year earlier.
The company said the increase in cash costs year-over-year was due to global price increases in consumables used in gold production, as well as increased quantities of consumables used due to higher output.
Cash costs still beat the projected $735 per ounce Casimir Capital projected earlier this week.
Cash costs were also lower when compared to the second quarter, due to the higher number of ounces sold, as well as increased production efficiencies, the company said.
Its cash position more than quadrupled year-over-year to $28.3 million at the end of the quarter, after investing $7.2 million in exploration and plant expansion.
The drill program at its San Francisco project continues, with the company expanding the 2012 campaign in October to 100,000 metres. In the quarter, more than 28,000 metres were drilled on the La Chicharra open pit gold mine - located 1.5 km west of the San Francisco pit.
In addition, a 5,000 metre core drill program started at its San Onesimo project in Zacatecas, Mexico in July.