NYSE MKT: TGD • $0.39     TSX: TMM • $0.52     Gold: 1270.98

San Francisco Mine

Ownership: 100% Timmins Gold Corp.

Land Package: 1250 ha of land of which Timmins Gold is the registered owner.

Description: The San Francisco Mine in an open pit heap leach operation with a mineral reserve of 574,000 ounces of gold (32 M tonnes at 0.56 g/t). The deposit is still open along strike and at depth with exploration potential for high grade ore beneath the existing pit.

Location: The San Francisco Mine is situated in the north central portion of the state of Sonora, Mexico, approximately 150 km north of the state capital, Hermosillo. The project is located in the Arizona-Sonora desert and can be found 2 km west of the town of Estación Llano and approximately 120 km south of the US/Mexico border city of Nogales along Mexican State Highway 15 (the Pan American highway).

Access: The Mine is easily accessible and close to infrastructure. All materials and supplies needed for ongoing exploration and mining are transported by either truck or rail. Most materials are supplied by truck along Highway 15. For deliveries by rail, the Ferrocarril del Pacifico railway runs directly adjacent to the project through the town of Estación Llano located approximately 2km away. Highway 15 is an important arterial route for personal and commercial travel. It is a four lane, fully paved highway which is well maintained.

Climate: The climate ranges from semi-arid to arid and is ideally suited for a heap leach operation. The average temperature is 21°C, with minimum and maximum temperatures of -5 C and 50 C. The average annual rainfall for the area is 330 mm. The desert vegetation surrounding the project is composed of low lying scrub, thickets and various species of cacti. The Mine is located in a flat area of the desert with the topography ranging between 700-750 m above sea level.

Geology & Mineralization: The project is a gold occurrence with trace to small amounts of other metallic minerals. The gold occurs in granitic gneiss and the deposit mainly contains free gold and occasionally electrum. It is believed that the San Francisco deposits are roughly tabular with multiple phases of gold mineralization and documented geological studies suggest the deposits are of mesothermal origin. The deposits strike 60° to 65° west, dip to the northeast, range in thickness from 4 m to 50 m, extend over 1,500 m along strike and are open-ended in each direction and remain open at depth.

Mining Method: Standard truck-and-shovel open-pit.

Processing: Three-stage crushing; Heap leach; ADR plant.

Status: With a recently completed review of operations, management has revised its operating plan for the San Francisco Mine  extending operations into 2023.

Highlights:

UPDATED SAN FRANCISCO MINE PLAN

Table 1 summarizes the mine plan from 2016 - 2023 (Q1). Actuals for January to June 2016 are incorporated. 

Table 1 – San Francisco Gold Mine Plan Summary 2016 – 2023 (Q1)
San Francisco Gold Mine Plan Summary 2016 - 2023 (Q1)

Notes: [A] SF = San Francisco, LC = La Chicharra, SP = Stockpile.  [B] Strip ratio includes all waste stripping; equal to waste tonnes mined divided by ore processed tonnes. [C] Includes cost of all waste stripping, and includes 0.5% NSR environmental royalty. [D] includes all development and sustaining capital (i.e. leach pad expansions, on-going maintenance, and resource drilling).

The new mine plan incorporates over two years of new exploration, infill and production drilling data, a reinterpretation of certain phases of the deposits, and mining and process engineering optimizations. Processing rates were determined based on mining rate constraints as well as an optimization of the haul distances and unit processing costs. 

Although processing and production rates are lower from 2019 forward, the associated design and plan results in the lowest all-in costs and highest margin for the mine life.  The lower grades and higher strip in 2019 and 2020 are offset through reduced unit mining and unit processing costs, keeping cash costs favourable.  Unit mining costs starting in 2018 and forward benefit from significantly reduced haulage distances and, later on, backfilling scenarios.  Unit processing costs, 2019 forward, benefit from lower throughputs (≤ 16 ktpd) as a result of: (i) the use of grid power only versus a combination of grid power and diesel-generated power at higher throughputs; and (ii) the use of one ADR plant versus two at higher throughputs. Total annual capital (development and sustaining) remains low throughout the mine life resulting in consistently favourable all-in costs.

MINERAL RESERVES & RESOURCES

Table 2 - San Francisco Gold Mine - Mineral Reserves at $1,250/oz gold as of July 1, 2016

  Cut-off
(Au g/t)
Category
(Notes A-B)
 Tonnes
(x1000)
 Au
g/t
 Gold
Ounces (x1000)
San Francisco Pit 0.19 Proven 16,666 0.58 313
Probable 8,267 0.54 144
Total 24,934 0.57 457
La Chicharra Pit 0.21 Proven 6,596 0.51 109
Probable 579 0.45 8
Total 7,175 0.51 117
Total   Proven 23,262 0.56 421
Probable 8,846 0.54 153
Total 32,109 0.56 574
Low Grade
Stockpile

 

Total 7,371 0.26 61

Notes:  [A] Includes mining recovery (96% for San Francisco and 98% for La Chicharra) and dilution of up to 4%, varying based on pit phases. [B] Mine plan includes reserves and low-grade stockpile.

Table 3 - San Francisco Mine - Mineral Resources at $1,350/oz gold as of July 1, 2016

  Cut-off
(Au g/t)
Category
(Notes A - D)
 Tonnes
(x1000)
 Au
g/t
 Gold Ounces
(x1000)
San Francisco Pit 0.18 Measured 26,731 0.60 515
Indicated 15,239 0.61 299
Measured & Indicated 41,970 0.60 814
Inferred 246 0.72 6
La Chicharra Pit 0.17 Measured 9,902 0.50 160
Indicated 3,575 0.48 55
Measured & Indicated 13,477 0.50 215
Inferred 79 0.43 1
Total Resources   Measured 36,633 0.57 675
Indicated 18,814 0.58 354
Total Measured & Indicated 55,447 0.58 1,029
Inferred 324 0.65 7

Notes:  [A]  Inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.  [B] Mining recovery or dilution are not applied in this table. [C] Inferred resources in this table are pit-constrained.  Inferred Resources have the potential to become additional Reserves at a future stage; however, due to the uncertainty that is attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration. [D] No known environmental, permitting, legal, title, taxation, socio-economic, marketing or political issues exist which would adversely affect the mineral resources estimated above, at this time.


Technical Information and Qualified Persons and QA/QC

This disclosure was reviewed and approved by Mr. Taj Singh, M.Eng, P.Eng, a Vice-President of the Company, who is recognized as a Qualified Person (“QP”) under the guidelines of NI 43-101.

The NI 43-101, by Micon, describing the details of the updated Reserve and Resource estimates and associated mine plan was reviewed by Taj Singh, M.Eng, P.Eng, a Vice-President of the Company, who is recognized as a Qualified Person (“QP”) under the guidelines of NI 43-101. Mr. William Lewis, B.Sc, P.Geo, and Ing. Alan J. San Martin, MAusIMM(CP), both of Micon, both independent QPs, reviewed the Mineral Reserve and Mineral Resource Estimate. Mr. Mani M. Verma, M.Eng, P.Eng, of Micon, an independent QP, reviewed the mine plan and economics. Mr. Richard M. Gowans of Micon, an independent QP, reviewed the metallurgy section. Each of Mr. Lewis, Mr. San Martin, Mr. Verma, Mr. Gowans, and Mr. Singh have read and approved of this disclosure.

Mineral resources that are not mineral reserves do not have demonstrated economic viability.

For a discussion of verification, sampling and QA/QC protocols used by the Company, please see the Company’s technical report dated September 30, 2016 entitled "NI 43-101 F1 Technical Report, Updated Resources and Reserves and Mine Plan for the San Francisco Gold Mine, Sonora, Mexico", filed on SEDAR

 

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