Agoracom Blog

Congratulations To Timmins Gold (TMM:TSXV)

Posted by AGORACOM at 1:17 PM on Wednesday, April 21st, 2010

Congratulations to my friends Bruce, Arturo and Alex over at Timmins Gold.  The company recently announced that commercial production was achieved at its San Francisco open pit mine in Mexico (I know I’m a little late on this but I’ve been a little distracted lately)

They are one of the most underrated junior gold producers out there in my opinion, which is why I bought shares in the company at $.80 back when Sprott financed the company, including warrants at the same price.  I sold 1/2 in the $1.35 – 1.40 range a couple of months ago but intend to hold the rest for now.


What I find particularly amazing and funny is the company is named Timmins Gold, its main project is called the San Francisco Gold Mine and it is actually located in Mexico.  Throw the 22 immutable laws of branding out the window, TMM has broken them all en route to its success 🙂


Timmins Gold participated in the AGORACOM Online Gold & Commodities Conference back in December 2009.  Here is a link to the presentation if you want to get a great overview of the company – but keep in mind it is 4 months old so you should check the company’s press releases for further updates since then.

We’ve actually covered the company via AGORACOM Small Cap TV since late 2007.


Peter Grandich posted an update on Timmins that appears to be from the Canaccord Capital, Morning Coffee e-mail message back on April 9th.  Not sure if Canaccord allows it to be posted but since it’s now out in the open, I’ve pasted it below for your convenience.  As a shareholder of the company, assume I am horribly conflicted and make sure to do your own DD.


“Time for you to tag along? Shares of Timmins Gold were not taking a siesta Thursday, rallying on news that commercial production was achieved at its San Francisco open pit mine in Mexico. . .Timmins continues to project production of 80,000 ounces of gold in 2010 with average life-of-mine cash costs of US$412/oz of gold. Canaccord Adams Mining Analyst Nicholas Campbell is looking for production of 74,000 ounces of gold in 2010 at a cash cost of US$468/oz.

With the project successfully achieving commercial production, the company intends to shift its focus from development to exploration. In particular, Timmins plans to complete an exploration program to test for the potential to push back the pit wall to the south, southwest and southeast as well as potentially develop the Chicharra pit to the west.

Based on the current estimated reserve base, at the expanded throughput rate the San Francisco project has a mine life of roughly 4.5 years. However, in addition to reserves, there are 170,000 ounces of measured, indicated and inferred resources that have not been incorporated into the mine plan.

Campbell believes shares could trade significantly higher based on the following: 1) A revaluation as the company moves from development to production: Timmins is trading at 3.2x 2011E CFPS vs. a junior producer average of 11.9x 2011E CFPS. As Timmins ramps up and achieves commercial production at San Francisco, he believes the valuation gap should start to narrow; 2) potential to expand the mine life of San Francisco; and 3) an acquisition target.

Shares trade at a significant discount on P/NAV and Campbell views Timmins as a tag-on acquisition target for a junior producer with operation in Mexico. The next catalyst for Timmins should be the release of an updated resource estimate, expected this quarter. Campbell is also looking for a new resource approaching 1.0 million ounces of gold, which should allow the company to expand the mine life by 3–4 years.”

– Canaccord Capital, Morning Coffee, Canaccord Capital (04/09/10)



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