Timmins Gold sells more ounces

Timmins Gold (TMM-T) says it’s on track to produce more than 100,000 oz. gold from its flagship San Francisco mine in Mexico for fiscal year 2011.  

Situated in northern Sonora along a belt of metamorphic rocks, the open-pit heap-leach operation, which came online last April, churned out 65,000 oz. in its first year of production.

For the first fiscal quarter ended June 30, 2011, it reported higher sales and in-line preliminary production results.   

Timmins sold 17,965 oz., or 59% more gold, over the same period last year, and generated 16,676 oz. gold and 9,089 oz. silver from its sole mine. 

Timmins recently expanded its crushing system from 14,000 tonnes daily to 18,000 tonnes per day. It has been ramping up to this level since the start of August. 

“We are very pleased with progress to date. We look forward to the benefit from the increased crushing capacity of 18,000 tonnes per day, as it will allow the mine to operate at an annual production rate of 100,000 ounces of gold per year,” Timmins’ CEO, Bruce Bragagnolo, said in a press release. 

Timmins says that while throughput has climbed quarter-over-quarter, cash costs are dropping. It hasn’t released its cash costs for the quarter, but that figure was US$530 per oz. in fiscal 2010.

While the company continues to improve operations, it’s also updating the project’s National Instrument 43-101 resource and reserve estimate. Once completed, the update would include another 85,000 metres of drilling since last July. The estimate is expected by September. 

At the end of August 2010, San Francisco had reserves of 34.9 million tonnes grading 0.69 gram gold per tonne for 780,000 oz. contained gold, plus 42.5 million measured and indicated tonnes at 0.72 gram gold for 984,000 oz. gold. 

Timmins says recent drilling has expanded the deposit in all directions around the main pit. It plans to spend $15 million to complete 160,000 metres of reverse-circulation and 21,000 metres of core drilling at San Francisco by December.

By that time, it aims to add another portable crushing system to further increase throughput by 7,000 tonnes daily, as part of a plan to gradually expand production to 130,000 oz. gold per year. 

Six analysts, with target prices ranging from $2.13 to $5 per share, are covering the company.  

On August 11, the day its first quarter results were released, the stock closed down 4¢ to $2.78 apiece.