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TEQUILA PROPERTY, Jalisco, Mexico During the first quarter of fiscal 2008, the Company entered into an option to acquire a 100% interest in the Tequila Property located approximately 30 kilometres north of Tequila, Jalisco, Mexico. The Tequila property consists of 4 strategically located concessions covering approximately 564 hectares in the northern portion of the State of Jalisco approximately 1 ½ hours north of Timmins Gold's regional field office in Guadalajara. The project was acquired to assess the high grade gold veins hosted in a belt of rhyolitic breccias and the bulk tonnage potential of the mineralized zones. During the second quarter the Company completed a first phase surface and underground sampling and exploration program. The Company was encouraged by initial results obtained from sampling of the Veta Grande Vein system as several bonanza grade results have been returned. Specifically assay results from 27 samples on the vein system returned grades ranging from 25 ppb to 48.30 g/t gold with 13 of the samples returning grades greater than 8 g/t gold (average grade of all 27 samples = 9.268 g/t Au). The main areas sampled were the Veta Grande vein, the Grano de Oro vein, the Guadalupe vein and the Veta Grande breccia zone. Significant mineralized intervals encountered during the current sampling program include: Veta Grande Vein: Samples VG 01 -- 09 15.91 g/t Au across 3.0 m Samples VG 001 -- 048 13.71 g/t Au, 119 g/t Ag across 10.0 m Samples VG 049 -- 094 14.01 g/t Au across 10.0 m Guadalupe Vein: Samples GPE7A 5.72 g/t Au, 320.0 Ag across 1.0 m Samples GPE7A 121.56 g/t Au, 280.0 g/t Ag (chip sample) Grano de Oro Vein: Samples GO front 662.40 g/t Au across 2.5 m Samples GO floor 13.88 g/t Au across 2.0 m Samples GO floor 5.91 g/t Au across 2.0 m Samples GO roof 1.01 g/t Au across 1.5 m Veta Grande Breccia Zone: Samples TEE 101 -- 117 0.72 g/t Au across 28.0 m Samples TEE 150 -- 164 1.67 g/t Au across 30.0 m Samples TEE 118 -- 122 1.80 g/t Au across 10.0 m Samples TEE 130 -- 149 1.13 g/t Au across 40.0 m Samples TEE 300 -- 313 0.04 g/t Au across 26.0 m. While the Company believes the above widths approximate true widths, this is subject to verification by the proposed drill program. Precious metal mineralization on the Tequila Property is associated with a sequence of rhyolitic tuffs and basalts hosting high grade epithermal gold veins in a breccia zone. The principal mineralized zone on the Tequila Property is the Veta Grande vein which has been traced along strike for over 700 metres and a vertical extent of over 300 metres. The down dip extent of the mineralized structure below the valley floor is not known but is being tested by the current drill program. Samples of the Veta Grande vein average 13.71 g/t gold and 119 g/t silver across 10 metres in exposures in the underground workings. Locally the Veta Grande vein has returned bonanza grades of up to 118.46 g/t gold and 469 g/t silver across 1.0 metre grab samples of mineralized material from the old workings averaging 23 g/t gold. The Veta Grande vein is hosted in a brecciated shear zone that has been traced along strike for over 1 km. This breccia zone varies from 20 to 60 metres in width and averages 40 metres. Sampling of the breccia zone, which is exposed on both sides of the Santiago River, returned an average grade of 1.13 g/t gold across 40 metres. The underground exposures of the breccia are highly oxidized suggesting the possibility of a higher grade zone of primary mineralization existing at depth. The Veta Grande system also has several high to bonanza grade veins that cross cut the primary system. These include the Guadalupe, Grano de Oro and La Lupita veins. These veins, while generally narrower, are often higher grade. The remnants of several small scale operations are evident on the property. Current small scale mining activities and our own sampling program have confirmed the presence of bonanza grade gold from the Veta Grande and related veins. Specifically the Guadalupe vein has been traced along strike for over 500 metres and a vertical extent of over 300 metres. Sampling across the 1.5 metre width returned an average of 5 to 6 g/t gold with selective grab samples from the old workings returning 121 g/t gold and 280 g/t silver. The Grano de Oro vein, which has been largely inaccessible to date because of high water levels, averages 2.0 metres wide and is exposed along strike for approximately 100 metres in underground workings. A single sample at the portal returned 662.40 g/t gold across 2.5 metres. The Lupita vein, while largely unexplored, is exposed for approximately 15 metres in underground workings. The Lupita vein returned 2.14 g/t gold across a 2.0 metre width. Selective samples returned 16 g/t gold. Technical staff are confident additional related veins and/or breccias zones will be identified by this exploration program. On February 21, 2008 Timmins Gold announced that the first diamond drill hole of an on-going, first phase drill program on the Tequila Gold Project, had returned a 24.3 meter interval grading an average of 5.88 grams per ton (g/t)gold (Au) and 29.9 g/t silver (Ag). The intersection included higher grade intervals including 15.14 g/t Au across 5.5 meters. The highest grade interval graded 40.4 g/t Au across 1.55 meters. The second zone intersected at 94.5 meters by drill No. 1 does not outcrop and was a blind discovery. Sampling by Timmins Gold throughout the property has identified several other high grade veins and zones and these will be drilled during this program.. The table below details the most significant mineralized intervals from BDVG-1 hole:
Hole BDVG-1 intersected the Veta Grande vein between 23 and 33 meters prior to encountering a transition zone of highly altered (siliceous and propylitic) and brecciated rhyolitic volcanic rocks with quartz veinlets and stockworks between 34 and 75 meters. Fault gouge was penetrated between 75 and 78 meters before encountering the highly-altered and brecciated rhyolitic unit once again. Between 95.5 and 122.8 meters four vein/zones with significant gold values were intersected. The hole was terminated at 188 meters. Timmins geological staff are highly encouraged by the results of the first hole of the program as it supports the Company's theory that additional parallel and intersecting high-grade zones exist within the system and that precious metal mineralization extends beyond the Veta Grande vein. Historical records available to the Company indicate mining in the immediate area was restricted to the Veta Grande vein, and that the average, recovered grade was between 10-15 g/t gold. The Company is awaiting the results from Hole BDVG-2 which was drilled to intersect the Veta Grande vein approximately 60 meters down dip. Timmins Gold is currently drilling Hole BDVG-3 approximately 100 meters upslope from the BDVG-1 drill site. This hole has been located to intersect the Veta Grande vein approximately 50 meters along strike and 50 meters updip from the BDVG-1 intersection. In addition to extending the strike length of the Veta Grande vein to the north, other holes planned from this station will test a series of parallel veins that outcrop to the east. A second larger diamond drill will shortly be arriving at the Property shortly to begin holes planned on the east side of the Rio Santiago. Additional holes are also planned to test the Grano de Oro, Lupita and Guadalupe veins. As a result of the positive results encountered in the first drill hole, the current drill program has been expanded from 1,500 to 5,000 meters.
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