Stonecap Securities has retained its "Sector Perform" rating and $3.70 target price after Timmins Gold (TSE:TMM) announced drill results from its San Francisco mine in Sonora, Mexico.
"We were the most encouraged by some of the results at La Chicharra, which continues to be an interesting target for the company due to the oxide nature of the ore," Stonecap Securities analyst Brian Szeto said in a note.
"Although the latest drilling may not necessarily indicate that the company will be able to immediately add material ounces to its current resource, we highlight that there are already enough ounces within its existing resource to extend San Francisco’s mine life to well beyond 10 years."
Timmins Gold reported the highlights from 148 holes that were completed between July and September of 2012 covering 35,455 metres of new drilling.
Amongst the highlights from the East Zone include: 4.55 grams per tonne (g/t) gold over 4.50 metres and 5.86 g/t gold over 3.00 metres. Overall, the highlighted results from the East Zone had an average of 0.72 g/t gold compared to the deposit’s resource grade of 0.52 g/t gold.
Highlights from the South Zone include: 3.01 g/t gold over 6.09 metres and 1.93 g/t gold over 12.19 metres. The average gold grade from the reported results was 1.35 g/t gold.
From La Chicharra, highlights include 15.53 g/t gold over 4.57 metres and 1.89 g/t gold over 13.71 metres. The average gold grade of the reported results was 1.06 g/t gold.
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