Mexican Gold Explorer Poised for Production

SEAN BRODRICK, Weiss Research (12/16/2008)
"I recently went through a part of Mexico where the streets are literally paved with gold. The San Francisco Mine is owned by Timmins Gold Corp (TMM on the TSX-Venture Exchange) and is located in Sonora State, Mexico.

The mine first operated from 1996 to 2001, producing between 300,000 and 400,000 ounces. Now, years after the mine closed down, it's being brought back into production by Timmins.

The company is focusing on the existing 611,000 ounces in reserves that it has already located. At current prices the resource (which includes the reserve) would be in excess of 1 million ounces.

Here are five things I really like about this company:
  1. Great Team. The team can be the most important thing about any miner. Bruce, Frank and Arturo know what they're doing and should be able to shepherd their company into production.

  2. Right place – right time. Timmins is going into production at a time when other new projects have been delayed or canceled. If gold heads higher – and I think it's going to trend higher – Timmins' timing could be excellent.

  3. Discovery potential. The company has large areas yet to be drilled on the 42,000 hectares of property they own around the San Francisco Mine. They also have other projects in the works – the Tequila Project in Jalisco State; Trincheras and Patricia, two claims to the west of San Francisco; Cocula, a Jalisco project that shows real potential, and others.

  4. Great plant and set-up for operations. The company has 100% of the equipment it needs to restart an open-pit, heap-leach mine. It has spent $12 million on new plant and equipment, including new crushers that are specifically designed to deal with the hard rock of the area. And Timmins even has potentially another 120,000 ounces of recoverable gold in the old heap-leach pad from the last time the mine was operating.

  5. Potential for growth. The interesting thing to watch is what happens in the next couple years. Will Timmins use their cash flow from the current mine to put together deals on other projects? I think they could make money, and what they do with that money will be interesting."

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