Vancouver, BC - Timmins Gold Corp. (TSX:TMM, NYSE.A:TGD) is pleased to report it has signed a term sheet with Sprott Resource Lending Partnership (the "Lender") extending the term of its existing $18 million credit facility. The extension is subject to final documentation.
The new credit agreement will have a term of 18 months from July 29, 2012. Interest will be payable at the rate of 8% per annum. Payment of the principal amount outstanding will be made at the end of the term. In consideration of the extension a bonus payment of 2% of the principal amount of the loan is payable in common shares of Timmins Gold at a price equal to a 10% discount to the 10 day weighted average closing price of the shares of Timmins Gold. In the event the loan has not been repaid by July 28, 2013, a further fee of 1% of the loan amount outstanding on that date will be paid to the Lender in shares priced at the same discount on that date. There is no prepayment fee.
"The extension and repricing of our credit agreement provides Timmins Gold with a strong financial base," stated Bruce Bragagnolo, CEO of Timmins Gold Corp. "With cash from operations being added to the balance sheet on a monthly basis even after paying for expansion and exploration, the extension provides the Company with operational flexibility. We are pleased to continue our excellent relationship with Sprott Lending."
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 an open pit heap leach operation. Timmins Gold has forecast production at a rate in excess of 100,000 ounces of gold per year. (Micon International NI 43-101F1 Technical Report dated November, 2011).
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