| ||August 17, 2006|
Completes Initial Public Offering Commences Drill Program
| ||Timmins Gold Corp. (the "Company") is pleased to announce that it has completed its initial public offering ("IPO") and has raised gross proceeds of $3,150,000. The Company's agent for the IPO was Bolder Investment Partners, Ltd. ("Bolder") of Vancouver, British Columbia. The IPO was fully subscribed for 9,000,000 Units at a price of $0.35 per Unit. Each Unit consisted of one common share and one non-transferable share purchase warrant which entitles the holder to acquire one additional common share at a price of $0.50 per share for a period of 1 year from the closing. |
The Company's initial project is the San Francisco Mine in Sonora Mexico, approximately 120 kms south of Nogales, Mexico. The mine is approximately 1km from a major highway, and has power, water and an existing infrastructure. Approximately $1,155,830 from the IPO proceeds has been earmarked for an 8,000 metre drill program consisting of 4,000 metres of core drilling and 4,000 metres of reverse circulation drilling. The Company commenced drilling immediately after its IPO and has to date completed a total of 3,400 metres of drilling including 2,200 metres of diamond drilling and 1,200 metres of reverse circulation drilling.
It is anticipated that the current drill program will be completed by the middle of September. Assays are being performed by ALS Chemex of Hermosillo, Mexico.
The San Francisco Mine is a past producing open pit heap leach operation. Operations were terminated in 2001 due to the low price of gold. A total of 110,310 meters of previous drilling including 1,114 drill holes led to a historical resource of 683,000 ounces of gold at a cutoff grade of 0.5 g/t Au. The Company's current drill program is designed to bring the resource estimate into compliance with National Instrument 43-101 (NI 43-101) since the historical resource was not prepared in accordance with that Instrument. The project is the subject of a technical report dated December, 2005 prepared in compliance with NI 43-101 by Micon International Limited of Toronto, Ontario.
The results from the drill program will be combined with historical data in order to prepare a resource estimate that is compliant with NI 43-101. Independent Mining Consultants of Tucson, Arizona has been commissioned to prepare the resource estimate. In addition, there are numerous exploration targets inside the boundaries of the property which are in the process of being reviewed.
The Company has the option to earn a 50% interest in the mine by spending USD$2,500,000 on exploration and development of the mine over a two year period, of which USD$1,000,000 will have been spent by September 1, 2006. After the Company has earned its interest, the mine will be operated as a joint venture with the Company acting as operator. The joint venture has the option to acquire the crusher, heap leach equipment and other equipment currently on site for its appraised value at any time over the next year.
The Company has its corporate office in Vancouver and has administrative offices in Hermosillo, Sonora, Mexico and a field office in Magdalena, Sonora, Mexico. For information about the Company or to view pictures of the San Francisco Mine please visit the Company's website at www.timminsgold.com.
In consideration of their services, the Company paid Bolder a cash commission of 8% of the aggregate proceeds of the offering, and issued agent's warrants in an amount equal to 12% of the number of units sold under the IPO. Bolder was also paid a corporate finance fee of 75,000 Units.
The Company thanks Ian Gordon and his team at Bolder Investment Partners, Ltd. for their assistance during the IPO process.
On behalf of the Board of Directors
TIMMINS GOLD CORP.
Per: "Arturo Bonillas"
President and CEO
This release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We use words such as "anticipate," "believe," "expect," "future," "intend," "plan," and similar expressions to identify forward-looking statements. These statements are only predictions and are subject to certain risks, uncertainties and assumptions, which are identified and described in the Company's public filings. Investors are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made.
The TSX Venture Exchange has not reviewed and does not accept responsibility for
the adequacy or accuracy of this release.
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