Thursday, 7 March 2013

Timmins Gold shares surge as TD Securities initiates coverage with $4.25 price target

Timmins Gold (TSE:TMM) (NYSE MKT:TGD) saw its shares surge over 14 per cent Thursday as TD Securities initiated coverage on the miner with a buy rating and a $4.25 price target on the stock.
Shares of the company traded up 33 cents as at about 3 p.m. EDT, hitting $2.64. Timmins Gold has a 52 week low of $1.45 and a 52 week high of $3.47 and its 50-day moving average is currently $2.59. 
The coverage from TD follows another note, released earlier this week, from analyst Philip Ker of PI Financial.
The PI analyst reiterated his buy recommendation and maintained his $3.90 target price on Timmins Gold, a 73-per-cent premium to the $2.26 price the day the report was issued, following a visit to its flagship San Francisco mine in Sonora State, Mexico.
PI Financial originally initiated coverage on the company this past December. 
Ker, who noted that the company expected to achieve over 30-per-cent growth to its production profile in 2013, indicated that successful operational results remain the “key catalysts” for Timmins Gold as it goes forward.
A number of other firms have also recently taken a closer look at the company, with analysts at Scotiabank initiating coverage last month. Scotiabank set an outperform rating and a $4.00 price target on the stock. 
Nine investment analysts have given the company a buy rating, with one other providing a hold rating, and one issuing a sell rating to the company. Timmins Gold currently has an average rating of overweight and an average price target of $3.80, according to media reports. 
The company’s San Francisco mine produced 94,444 ounces of gold in 2012 from its open-pit heap leach operation, and Timmins Gold said in a recent release that it is “aggressively expanding” its crushing circuit in order to bring throughput up to 30,000 tonnes per year, and begin targeting 125,000 to 130,000 ounces of gold production. 
Current reserves are estimated at 1.3 million ounces, and the company said it aims to develop its past producing La Chicharra pit, which is located just 1.5 kilometres from the San Francisco mine.

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