Timmins Gold (TSE:TMM) Tuesday updated its NI 43-101 compliant reserve and resource estimates for its producing San Francisco gold project in Mexico, doubling the proven and probable reserves at the main San Francisco pit.
Investors cheered the news with the stock up 7% at $3.30 in early afternoon trading.
The Mexico-focused producer said proven and probable reserves at the San Francisco open pit have been estimated at 1.21 million ounces of gold, represented by 64.25 million tonnes at 0.588 g/t (grams per tonne) gold, a 104% increase over the proven and probable reserves of 780,000 ounces (34.93 million tonnes at 0.695 g/t), net of production depletion of 129,000 gold ounces, it reported in November 2010.
As well as this pit, the company's key San Francisco project in the state of Sonora includes the nearby La Chicharra open pit, where updated proven and probable reserves have been estimated at 116,000 ounces of gold represented by 8.15 million tonnes at 0.445 g/t gold.
The Vancouver-headquartered gold producer said total measured and indicated resources at the San Francisco project were 1.44 million ounces of gold, represented by 73,624 tonnes at 0.609 g/t gold. This compares to total measured and indicated resources of 984,000 ounces of gold, represented by 42,531 tonnes at 0.720 g/t issued by Timmins last November.
CEO of Timmins Gold, Bruce Bragagnolo, said: "This is a significant milestone for the company, and the updated reserves now outline a 10 year mine life with a projected production rate of 100,000 gold ounces per annum.
"Based on the success of this drill program, the company continues to drill aggressively at San Francisco and La Chicharra, and anticipates completing an additional 120,000 metres of drilling from July, 2011 to December, 2011."
Indeed, the latest reserve and resource estimate, which was prepared by MICON International, is derived from information obtained from a drill program of 700 holes of core and reverse circulation drilling, totaling 94,193 metres completed between July, 2010 and June, 2011.
Last week, Timmins reported it swung to a profit in the first quarter, as metal revenues nearly doubled on a 59% increase in gold production and higher prices.
For the three months ending June 30, the company posted net income of $5.75 million, or 4 cents per share, compared to a loss of $1.01 million, or break-even per share, a year ago. Metal revenues climbed around 94% year-over-year to $27.02 million.
Timmins produced 16,676 ounces of gold during the first quarter, and sold 17,965 ounces, compared to gold produced and sold of 11,319 ounces a year earlier. |
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