Timmins Gold Corp – More acquisitions

by Sam Kiri

Mine expansion drive continues at Canadian venture listed Timmins Gold Corp (TSX.V: TMM). The company has acquired, by staking, a 40,000 hectare land package in the Penasquito area of Mexico. The claims are contiguous to Goldcorp's Penasquito Gold Deposit and are approximately 20 km to the northwest of the Camino Rojo project of Canplats Resources.

The area certainly is prolific. As of June 2007, Goldcorp reported proven and probable gold reserves at Penasquito of 13.0 million ounces. More recently Canplats Resources has reported drill intercepts of up to 224 metres averaging 1.50 grams of gold and 24.45 grams of silver per tonne from its Camino Rojo project.

The company acquired the claims due to their proximity and geological similarity to the Penasquito Gold Deposit. Concepcion del Oro lies within the Mexico Geosyncline, a 2.5 km thick series of marine sediments. Mineralisation in the region is characterized by carbonate replacement bodies along the contact between intrusive and limestone packages. Ore deposits are formed in skarns and chimneys, and mineralized breccias developed in clastic and permeable rocks of the Caracol formation affected by intermediate intrusions.

TMM claims show evidence of such intrusive and limestone packages and the geologists have identified a sandstone unit within a synclinal structure in the eastern portion of the property believed to be a unit within the Caracol formation, the host of the Penasquito mineralization. Assays from selected grab samples taken by TMM geologists have returned anomalous gold values in excess of 1gram of gold per tonne.

TMM this ambitious yet realisable target of being in production by 1Q2009. The management envisages an annual production of 80,000 ounces of gold for five years.

Flush with cash after its recent $19 million financing through a private placement, such lofty hopes are indeed a reality. Having realised the potential of TMM and its impressive project in San Francisco gold mine, Pacific Road Resources Funds, an Australian private equity manager investing in the global mining industry, has stepped in to support the company. Mr. Lee Graber of Pacific Road Resources Funds was subsequently appointed as a director.

In the face of rising market uncertainties investors are keener on mining companies that have advanced stage, close to production projects preferably in North America. With assets in considerably mining friendly Mexico together with near-production asset in San Francisco Mine, TMM therefore presents an interesting investment proposition. Clearly, TMM has friends in local, state, and federal authorities, who have shown irrefutable cooperation to grant full permitting to develop the San Francisco mine.


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