Timmins Gold doubles San Francisco’s reserves

Timmins Gold (TMM-T) has a reason to cheer as it completes a large drill program on the San Francisco gold project in Mexico’s Sonora state, doubling reserves and potentially extending the mine’s life by a decade.

“The 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,” said Timmins Gold’s CEO Bruce Bragagnolo, in a press release.  

On the news, investors pushed the company’s stock up 7% to close Sept. 20 at $3.31 apiece, after hitting a year high of $3.40. A day later, the stock touched another high of $3.45 before settling around $3.40 apiece.

The updated resource is based on 94,193 metres in 700 holes completed between July 2010 and June 2011 on the past-producing San Francisco project, which includes the nearby La Chicharra open pit.

La Chicharra is some 2 km west of the San Francisco open pit. Combined the two pits host gold reserves of 1.21 million oz. from 64.2 million tonnes grading 0.58 gram gold per tonne. This is a 104% increase from the previous reserve, updated last November, of 780,000 oz. from 34.9 million tonnes at 0.69 gram gold, net of 129,000 gold oz.  

The new reserve estimate was prepared by Toronto-based MICON International and based on a gold price of US$1,100 per oz. and a 0.14-gram gold cutoff grade.

The project has another 1.44 million oz. gold based on 73.6 million tonnes at 0.60 gram gold in the measured and indicated category.

Bragagnolo said the company plans to complete another 120,000 metres at San Francisco and La Chicharra from July to December of this year.

Timmins brought the San Francisco project online last April, transitioning the company from an exploration and development company to a junior producer. Since starting up its sole mine, Timmins has been ramping up production. For the quarter ending June 30, 2011, it recovered 16,676 oz. gold, an 18% increase from the same period a year ago.