Timmins Gold Corp. (TSE:TMM)(NYSE MKT:TGD)(AMEX:TGD) says it has intersected a new mineralized gold zone around 1 kilometre to the east of the San Francisco pit at its San Francisco mine in Sonora, Mexico.
The San Francisco mine, from which Timmins is in commercial production, is comprised of two pits, the larger San Francisco pit and the La Chicharra pit - located approximately 1.5 km to the west.
The company is in the midst of an ongoing drill program at the site, having drilled a total of 148 holes from July to the end of September. It now has four reverse circulation rigs and one core rig working at the asset.
Drilling results so far have led to the confirmation of a new mineralized zone - extending as far as 1 kilometre to the east of the existing limits of the San Francisco pit, the miner said.
The new zone, called San Francisco East, has seen intercepts such as 4.5 metres of 4.55 grams per tonne g/t gold and 7.5 metres of 2.19 g/t gold in hole TFD-128. Timmins said this hole hit several mineralized zones to a depth of 837 metres.
Other holes drilled in the same area contained intercepts of 3 metres at 5.86 g/t gold and 6 metres of 2.65 g/t gold.
Drilling in this zone, the company said, was designed to test a magnetic high trend that passes through the San Francisco pit, and continues for a minimum of two kilometres to the east of hole TFD-128.
Meanwhile, despite limited drilling done to the south of the San Francisco pit, there were some highlights including 6.1 metres of 3 g/t gold in hole TF-2042, 6.1 metres of 1.98 g/t gold in hole TF-2043, and 12.19 metres of 1.93 g/t gold in hole TF-2052.
In September, though, the drill was moved to La Chicharra to follow up on new mineralized zones found to the north of that pit. Notables holes in this area included 4.57 metres of 15.53 g/t gold in hole TF-1929, and 13.71 metres of 1.88 g/t gold in hole TF-1970.
Timmins said that recent results from here show the mineralization extends along strike of the current La Chicharra pit, and that there are at least two parallel structures just to the north of the current pit, with "no indication the limits of the mineralization have been reached".
Shares in Timmins rose 0.3 per cent, to $3.31 in Toronto on Friday morning.
On Wednesday, Casimir Capital maintained its "strong buy" recommendation and $4.25 price target on Timmins Gold, after the gold miner released results from bulk sample leach testing at its San Francisco mine, showing average gold extraction rates as high as 80.9 per cent.
The program entailed five composite samples from the San Francisco deposit and one from the La Chicharra deposit, varied by rock type. Based on relative abundance of each rock type in the deposit, weighted average recoveries from the coarser crush corroborated life-of-mine expectations, averaging 71% for San Francisco and 78.3% for La Chicharra, Casimir analyst Stuart McDougall noted.
Timmins Gold plans to begin pre-stripping at the satellite La Chicharra deposit in the current quarter and to follow up with full operations in March 2013, at a rate of 8,000 tonnes per day.
The Casimir report added that thereafter, the combined production rates from the two deposits are expected to average 130,000 ounces per year, or 30 per cent higher than 2012 guidance from the San Francisco deposit alone.
Earlier this month, the precious metals producer 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 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.
The Canadian company produced a record 25,153 ounces of gold, up 46 per cent from a year ago.
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