"There is something to be said about a company that can do what most can't. Timmins Gold has successfully made the leap from being an exploration company to being a producing company. Timmins managed to acquire the past-producing San Francisco Mine several years ago, and in a very short time has brought the mine back into production. The plant has a capacity of over 100,000 ounces per year, and to this point has been fully refurbished and made operational.

Based on the current studies that have been conducted, the mine will operate at a $412/oz. cost. With today's gold prices of $1,200/oz., that means $100M earnings (before tax). This is a very robust project. The current market cap is somewhere around $170M. So the company is trading at about 1.7 times 2011 earnings. This is quite discounted. Most producers should be trading in the 8–10 times earning range. Based on that, there is significant, low-risk upside associated with this company. The risk is based on market movement, and even that is very low because gold producers are insulated against market down turns.

I would not be surprised to see the share price of the company have an initial move to $3–$4 on its way to $8–$10 per share."