Vancouver, BC - Timmins Gold Corp. (TSX:TMM) is pleased to announce the Company has restructured and replaced its prior gold-linked notes with Sprott Asset Management, LP on behalf of certain funds or managed accounts, with an C$18 million credit agreement with Sprott Resource Lending Partnership.
The new credit agreement has allowed the Company to repay the existing requirement to deliver 8,335 ounces of gold and has provided a further C$5.6 million in working capital. The new credit agreement provides for a lump sum payment of principal on maturity in 14 months, with interest paid at the rate of 1% per month.
"The new credit agreement allows us to freely realize current gold prices on our production, and provides a strong financial base for further exploration and production expansion programs at San Francisco," stated Bruce Bragagnolo, CEO of Timmins Gold Corp. "The Company is focused on increasing production with the completion of the expansion of the existing crusher system to 18,000 tonnes per day by the end of July, 2011. Our drill program is ongoing and will lead to an updated NI 43-101 resource calculation in the near future."
Timmins Gold will not be proceeding with the $15 million credit facility announced on March 15, 2011. Timmins Gold has issued 301,933 common shares to Sprott Resource Lending Partnership in connection with the above transactions and the cancellation of the $15 million credit facility. The shares are subject to a four month hold period.
Caution Regarding Forward-Looking Statements
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.
Neither the TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this release.
About Timmins Gold
Focused solely in Mexico, Timmins Gold Corp is in commercial gold production at its wholly owned San Francisco gold mine in Sonora, Mexico. The mine is a past-producing open pit heap leach operation. Timmins Gold has forecast production at a rate in excess of 100,000 ounces of gold per year at a life of mine cash cost of approximately U.S. $489 per ounce. (Micon International NI 43-101F1 Technical Report dated November, 2010).
Timmins Gold Corp.
CEO and Director