1Q2 2011 numbers were restated. Please refer to the Q3 2011 financial statements for the restated Q2 2011 numbers.
Bruce Bragagnolo, CEO of the Company, in commenting on the results for the Company's third ever quarter of operations at the San Francisco Mine said "The Mine's performance during the three months ended December 31, 2010 continues to be on schedule. The achievement of quarterly gold sales of 20,030 ounces at an operating cost of US$439 per ounce speaks volumes for the hard work of the production team at the mine. We achieved or surpassed all our production targets and saw continuing increases in all operating metrics, including mine production, ore deposited on leach pads, gold recovery and gold and silver sales. We are also very pleased with the exploration efforts in the vicinity of the San Francisco Mine which resulted in a 28% increase in the measured and indicated resources at the San Francisco mine."
"We are restating our second quarter financial statements to correct an adjustment to the amortization of our strip ratio over the life of the mine. The net result of the restatement is a reduction in cash costs to US$515 per ounce for the second quarter ended September 30, 20101."
For the three months ended December 31, 2010, Timmins reported a net income after tax of $7,537,351 or $0.06 per share ($0.05 on a diluted basis) on revenue of $28.0 million. This compared to a net loss of $1,793,238 million or $(0.02) per share (basic and diluted) during the three months ended December 31, 2009, a period during which commercial operations at the San Francisco Mine had not yet commenced. The financial performance of the Company benefitted from continued strong gold prices and a successful and increasing operating performance at the San Francisco Mine. During the third quarter ended December 31, 2010, cost of sales was $8.9 million. General and administration costs were $687,589 in the third quarter of 2010 compared to $1,489,043 during the third quarter of 2009. Depreciation and amortization charges in this quarter were $2,117,888 compared to $16,321 in the comparable quarter last year. Other expenses during this quarter consisted primarily of the interest expense, mostly attributable to interest on the gold loan, of $4,341,617 and foreign exchange gains, net of interest income, of $774,085.
As a result of the foregoing factors, net income before taxes was $12,246,629 for the third quarter of 2010 compared to a loss of $1,793,238 for the third quarter of 2009. For the three months ended December 31, 2010, net income, after taxes, was $7,537,351 or $0.06 per share ($0.05 on a diluted basis) compared to a net loss of $1,793,238 or $(0.02) per share (basic and diluted) for the three month period ended December 31, 2009.
For the nine month period ended December 31, 2010, the company reported net income before taxes of $16,542,350 or $0.13 per share ($0.11 on a diluted basis), compared to a loss of $3,159,567 or $(0.03) per share (basic and diluted) for the nine month period ended December 31, 2009. For the same nine month period, net income, after taxes, was $7,623,020 or $0.06 per share ($0.05 on a diluted basis) on sales of $62.6 million. This compares to a loss of $3,159,567 for the comparable nine month period of the previous year with, proceeds from the sale of gold and silver were applied as a reduction to the construction and commissioning costs of the Mine.
The remaining third party long-term debt obligation of the Company is the gold loan which was used to complete the commissioning of the mine. During the quarter an additional three scheduled monthly repayments were made which totaled to the cash equivalent value of 5,001 ounces of gold with a gross value of US $6.95 million. As of the date of this press release, the Company has already made six out of twelve payments on the gold loan totaling US $13.43 million in payments. Six more monthly payments are due with the last one scheduled for August of 2011. At the end of the quarter the Company had $4.6 million cash on hand compared to cash on hand of $2.7 million on March 31, 2010.
THE SAN FRANCISCO MINE
The table below illustrates certain key operating statistics for the San Francisco Mine for the three quarters ended December 31, 2010. There were no comparable statistics to report for the three months ended December 31, 2009.
|Total material mined (000s mt)||4,983||4,969||5,777||15,729|
|Ore to leach pads (000s mt)||905||1,091||1,209||3,205|
|Ore grade (g/t Au)||0.718||0.817||0.939||0.835|
|Gold sold (Au oz)||11,290||15,690||20,030||47,010|
|Ore processed per day (mt)||9,948||11,856||13,430||13,282|
|Operating cost per ounce sold (US$)||US$697||US$5151||US$439||US$526|
Focused in Mexico, Timmins Gold Corp. became a gold producer in April 2010 with the commencement of commercial production at its wholly owned San Francisco Mine in Sonora, Mexico. In addition, the Company has a number of other properties in Mexico.
For more information, please contact:
Bruce Bragagnolo LLB
VP Corporate Development
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This News Release contains forward-looking statements. Forward-looking statements are statements which relate to future events. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", believes", "estimates", "predicts", "potential", or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, level of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements.
While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggestions herein. Except as required by applicable law, Timmins Gold does not intend to update any forward-looking statements to conform these statements to actual results.
Timmins filed a prospectus/offer to exchange and registration statement on Form F-4 with the SEC on February 10, 2011. In addition, Timmins has filed a preliminary proxy statement in connection with Capital Gold Corporation's special meeting of stockholders. Capital Gold Corporation's stockholders are urged to read these documents, all other applicable documents, and any amendments or supplements thereto when they become available, because each contains or will contain important information. Such documents are or will be available free of charge at the SEC's website (www.sec.gov) or by directing a request to Innisfree M&A Incorporated, 501 Madison Avenue, 20th Floor, New York, NY 10022, U.S.A., at 877-800-5182 (toll free for stockholders) or 212-750-5833 (collect for banks and brokers).
Timmins and its directors and executive officers and other persons may be deemed to be participants in any solicitation of Capital Gold Corporation's stockholders in connection with the proposed transaction. Information about the directors and executive officers of Timmins and other persons that are participants in such solicitation will be included in the proxy statement that will filed by Timmins in connection with Capital Gold Corporation's special meeting of stockholders. Investors may obtain additional information regarding the interests of such participants, which may be different from those of Capital Gold Corporation's stockholders generally, by reading the proxy statement and other documents filed with the SEC when they become available.