Capital markets firm Stonecap Securities Tuesday said it was maintaining its “outperform” rating and target price for Timmins Gold Corp. (TSE:TMM) after the miner announced new drill results from its San Francisco mine in Sonora, Mexico.

Timmins Gold announced results from 8,852 metres of new drilling, which included both drilling at the San Francisco mine and the La Chicharra deposit located 1.5 kilometres to the west of the company’s current mining operations.

Drill highlights at San Francisco included hole TF-2001, which hit 10.5 grams per tonne (g/t) gold over 9.1 metres; hole TF-2011, which returned 2.3 g/t gold over 12.1 metres; and hole TF-2042, which intercepted 3.0 g/t gold over 6.1 metres.

Notable results from La Chicharra included hole TF-1825, which hit 2.6 g/t gold over 6.0 metres; hole TF-1899, that intercepted 1.6 g/t gold over 21.3 metres; and hole TF-1878, which returned 1.2 g/t gold over 13.7 metres.

“We also highlight that all of the new drilling is primarily shallow drilling,” said Stonecap analyst Brian Szeto.

“Overall, drilling at San Francisco confirms that the pit is open to the south and southwest and drilling at La Chicharra also shows that this satellite deposit is growing in size.”

Stonecap noted that Timmins Gold is currently drilling with five rigs on site and continues to expect to drill heavily into 2013.

“We continue to rate the shares with an “outperform” rating and a target price of $3.20, which is based on a 1.1x multiple to our [net asset value] NAV estimate of $2.90 per share,” said Szeto.

Stonecap said although some drill results are encouraging and continue to demonstrate the exploration upside of the project, “these results don’t impact our valuation at this time as this is very much a production story”.

The firm said the next major catalyst for Timmins Gold is the new mine plan, which is expected to be due out shortly.

Timmins Gold is focused solely in Mexico and has begun production at the San Francisco gold mine. Its aim is to expand the current reserves and the lifespan of the San Francisco mine, and advance its other gold exploration projects.

The San Francisco gold mine is an open pit heap leach operation that has forecast production at a rate in excess of 100,000 ounces of gold per year - for which the company in August said it is on target to meet. Adding a pre-screening system and other planned equipment will take the mine to in excess of 130,000 ounces a year in 2013.

The 50,000-metre drill program for the San Francisco gold project began in the company’s second quarter, and a 5,000-metre core drill program at its San Onesimo project in Zacatecas, Mexico, began in July.