Timmins Gold (TMM-V) has started commercial production at the San Francisco gold mine, a past-producing open-pit heap-leach operation in the Arizona-Sonora Desert in the northern portion of the Mexican state of Sonora.
Timmins Gold, which acquired the past-producing mine in the San Francisco mine, expects to produce more than 80,000 oz. gold per year at a life-of-mine cash cost of about US$412 per oz., based on a preliminary feasibility study completed in March 2008.
The company says mining rates and process plant throughput have been built up steadily during the commissioning phase and are now surpassing budget and plan by nearly 10%.
Management believes the mine will reach production of 80,000 oz. this year. Timmins Gold is now drilling along strike to expand the reserves at the San Francisco mine. The San Francisco gold occurrence is in the Sierra Madre Occidental metallogenic province, which extends from the Mexico-U. S. border in the north to Jalisco in the south.
Based on 8,778 metres of drilling during 2005 and 2006 and another 4,386 metres in 2007, the company released a National Instrument 43-101 resource estimate demonstrating a measured and indicated resource of 27.65 million tonnes grading 0.81 gram gold. San Francisco also has an inferred resource of 2.51 million tonnes grading 0.79 gram gold.
The San Francisco deposit consists of the El Manto, the San Francisco, the En Medio and the El Polvorin deposits. All these deposits were incorporated into the main San Francisco pit.
To the west of the pit, another deposit, the La Chicharra zone, was mined during the last two years of production as a second pit.
Placer mining and small-scale underground mining began in the San Francisco mine area during the early 1940s. This limited work is what attracted Fresnillo (FRES-L) to the area in 1983.
Between 1995 and May 2002, the San Francisco mine extracted 13.5 million tonnes grading 1.13 grams gold for 488,680 contained ounces of gold.
A total of 300,834 oz. gold and 96,149 oz. silver were recovered, with the gold recovery estimated to be 61.4%.
During the last two years of operation, gold was being recovered from the leach pads only, with no mining being conducted within the San Francisco and La Chicharra open pits.
The mine was mothballed in 2002 due to poor economic conditions at the time.
On the exploration front, Timmins Gold’s portfolio includes a 450-sq.-km property contiguous to Goldcorp’s (G-T, GG-N) Peasquito gold mine (17 million oz. gold) and its Camino Rojo gold project in Zacatecas, about 50 km southeast of Peasquito.
Camino Rojo is a low-cost satellite operation that will augment Peasquito’s production.
At presstime Timmins Gold was trading at $1.40 per share.
Over the last year, the company has a trading range of 38.5¢-$1.56 and 109.3 million shares outstanding.
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