Timmins Gold pours first gold at Mexican mine

Timmins Gold (TMM-V) has poured the first gold from its San Francisco gold mine in northern Mexico.

The junior produced a 46-kilogram dore bar assaying 77.93% gold (for 1,152.7 oz. gold) and 19.49% silver (for 288.28 oz. silver). The remaining 2.58% consisted of other metals.

At spot prices of US$1,140 per oz. gold and US$17.50 per oz. silver, the dore bar has a value of US$1.3 million in gold and US$5,044 of silver.

The past-producing open-pit heap leach mine is in the Sierra Madre Occidental metallogenic province, which extends from the Mexico-U.S. border in the north to Jalisco in the south. Timmins Gold says the mine is currently ramping up to full commercial production.

The Vancouver-based company acquired an interest in the property in 2005 and since then has completely refurbished and tested the mine’s existing gold plant, which has a capacity of more than 100,000 oz. gold a year. It also refurbished the primary crusher, installed a new secondary and tertiary crusher and conveyors, and completed heap leach pads.

Based on a preliminary prefeasibility study completed in March 2008, Timmins Gold believes the mine can maintain production at a rate of more than 80,000 oz. gold a year at a life of mine cash cost of about US$412 per oz. At US$850 per oz. gold, the mine yields a before-tax internal rate of return (IRR) of 86.7%.

According to a resource estimate released in January 2007 that was based on a US$500 per oz. gold floating cone with 64% recoveries, US$1 per tonne mining costs and a cut-off grade of 0.23 gram gold per tonne, the mine has a measured and indicated resource of 27.65 million tonnes grading 0.81 gram gold per tonne for 716,800 oz. gold. In the inferred category the San Francisco mine has 2.5 million tonnes grading 0.79 gram gold per tonne for contained gold of 63,500 oz.

Timmins Gold continues to conduct surface drilling near the deposit to add gold ounces to its inventory and expand the current mine life.

At presstime Timmins Gold was trading at $1.31 per share. The company has a 52-week trading range of 20¢-$1.56 per share and 99.1 million shares outstanding.