San Francisco Gold Mine Operations Extended Into 2023

VANCOUVER - Timmins Gold Corp. reported results of a recently completed National Instrument 43-101 Technical Report for the San Francisco Gold Mine in Sonora State, Mexico, prepared by Micon International Limited.  Highlights: 2016 production between 90,000 and 100,000 gold ounces at cash costs of $750 to $800 per gold ounce and total capital expenditures of $4 million; 2017 production between 65,000 and 70,000 gold ounces at cash costs of $900 to $950 per gold ounce and total capital expenditures of $4 million; 2018 production between 80,000 and 85,000 gold ounces at cash costs of $1,000 to $1,050 per gold ounce and total capital expenditures of $2 million; Life-of-mine production between 450,000 and 500,000 gold ounces at cash costs of $900 to $950 per gold ounce and total capital expenditures of approximately $18 million ($38 per ounce); Updated Reserves (after mining recovery and dilution) of 574,000 gold ounces grading 0.56 g/t at $1,250 per gold ounce; additionally, Stockpiled Ore of 61,000 gold ounces of grading 0.26 g/t; and Updated Measured & Indicated Resources of 1.0 million gold ounces grading 0.58 g/t at $1,350 per gold ounce.

President Arturo Bonillas said, “We are very pleased to provide guidance for the continued operations at San Francisco which will generate significant free cash flow and offers the Company continued exposure to the rising gold price environment. Over the course of the past year, we made significant reductions in costs and increased operating efficiencies, which contribute greatly to the estimated profitability of the new life of mine plan.  Additionally, the low capital requirements throughout the mine life result in very attractive all-in costs.  The Company has employed a $1,250 gold price for Reserves, but the potential for significant upside optionality is noteworthy.  Based on a $1,350 gold price pit, the number of Resources increases by almost 70% compared to a $1,250 gold price pit.”

Mark Backens, Interim CEO added, “Expected cash flow from operations will comfortably fund the pre-construction work program at Ana Paula while meaningfully contributing to the Company’s treasury. Gold production at San Francisco should continue well through the expected start of production at Ana Paula. Further, the cash flow from operations will be an important source of funding for Ana Paula construction.”

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.