VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 3, 2007) - Timmins Gold Corp. (the "Company") (TSX VENTURE:TMM) announces that it has closed its brokered private placement of 12,627,000 units at a price of $0.50 per Unit (the "Unit") for total gross proceeds of $6,313,500. Bolder Investment Partners, Ltd. acted as the agent with selling group participation from Raymond James, Canaccord Capital Corp. and Haywood Securities Ltd. (together the "Agent"). 12,437,000 of the Units were sold on a brokered basis. Each Unit consists of one common share and one-half non-transferable share purchase warrant. Each whole warrant entitles the holder to purchase one additional common share of the Company at a price of $0.70 for a period expiring on October 31, 2007. Lead placees were Sprott Asset Management Ltd. with 4,000,000 units and Macquarie Resource Capital Canada Ltd. with 1,000,000 units. Sprott Asset Management Ltd. currently owns 11.9% of the current issued and outstanding shares of the Company and would own 16.9% of shares of the Company in the event only the Sprott warrants are exercised.
The Agent's compensation was paid by way of a cash commission of 7.5% of the gross proceeds of the Offering, which it elected to be paid partially by the issuance of 180,414 Units. A total of 1,207,000 broker warrants were also issued. Each broker warrant entitles the holder to purchase one additional common share of the Company at a price of $0.70 for a period expiring on October 31, 2007. A finder's fee of $11,250 was also paid. The securities issued pursuant to the private placement and the Agent's compensation are subject to restrictive legends expiring on August 29, 2007.
US$2.5 million of the proceeds will be used to fund the acquisition of the remaining 50% interest in the San Francisco property located in Sonora, Mexico, which the Company had yet to earn pursuant to its original option agreement with Geomaque, Mexico. All necessary documents regarding transfer of title for 100% of the property have been executed and the Company is presently waiting for formal approval of the transaction from the TSX Venture Exchange prior to closing the acquisition.
The remaining proceeds will be used to fund completion of the pre-feasibility study, resource expansion and step out exploration on the San Francisco property and for general corporate purposes. A portion of the proceeds may also be used to help fund the acquisition of new projects. Metallurgical testing, consisting of bottle roll and column leach tests of the various ore types are nearing completion and the Company expects these results to be incorporated into the final study within the next six to eight weeks. These metallurgical tests constitute the last significant, outstanding element required to complete the pre-feasibility study.
As previously announced the pre-feasibility study is focused on evaluating the viability of resuming production on the property and exploiting the 716,800 ounce measured and indicated and 63,500 ounce inferred gold mineral resource on the property. Management is also confident it can expand the resource both in the immediate area of the pit, along strike of the pit and in other satellite deposits and targets on the 40,000 hectare property.
This News Release contains forward-looking statements. Forward-looking statements are statements which relate to future events. In some cases, you can identify forward-looking statements by terminology such as "may", "should", "expects", "plans", "anticipates", believes", "estimates", "predicts", "potential", or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and other factors that may cause our or our industry's actual results, level of activity, performance or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements.
While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect out current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggests herein. Except as required by applicable law the Company does not intend to update any forward-looking statements to conform these statements to actual results.
FOR FURTHER INFORMATION PLEASE CONTACT:
Timmins Gold Corp.: Hermosillo, Sonora, Mexico
Arturo Bonillas, B.Sc.(Eng)
Timmins Gold Corp.
Darcy Krohman, P.Geo., C.A.
Senior Vice-President & CFO
(604) 682-4003 (FAX)
Timmins Gold Corp.: Investor Relations