San Francisco Mine Gold Reserves Increased by 28% Timmins Gold is pleased to announce an increase in the MineralReserve and Mineral Resource estimate for its wholly owned San Franciscoopen pit gold mine located in northern Sonora, Mexico. Proven andProbable Reserves were increased from 611,000 ounces to 780,000 ounces,an increase of 28%. The increased reserve and resource estimate followsupon the commencement of commercial production in April, 2010.
The Mineral Reserve completed by the independent qualified person, Mr.Mani Verma, M.Eng., P.Eng., of Micon International Ltd, (Micon), ofToronto, Ontario, was prepared using CIM definitions for MineralReserves as required by National Instrument 43-101. An updated technicalreport will be filed on SEDAR shortly. The Mineral Reserve is found inTable 1 below.
Table 1- Mineral Reserve within the San Francisco Pit with Topography at August 31, 2010. | Ore Type | Metric Tonnes
(1,000) | Gold g/t | Contained Gold
Ounces |
| Proven | 17,194 | 0.756 | 418,000 |
| Probable | 17,738 | 0.635 | 362,000 |
| Total | 34,932 | 0.695 | 780,000 |
The Mineral Reserves are based on a gold price of US$900 per ounce. Thereserve includes a dilution factor of 12% according to the type ofmineralization and size of the blocks modeled. An internal cutoff gradeof 0.16 g/t gold was used. Weighted average gold recovery is estimatedat 70%.
Measured and Indicated Resources for the San Francisco mine haveincreased to 984,000 ounces of gold and the Inferred Resource hasincreased to 208,000 ounces of gold. This represents an increase of 10%to the combined Measured and Indicated resource estimate published inApril, 2010. The updated resource estimate is found in table 2 below:
Table 2 - Mineral Resource Estimate with Drill Data as of the end of May, 2010 (Inclusive of Mineral Reserve). | Resource Category | Metric Tonnes
(1000) | Gold g/t | Contained Gold
Ounces |
| Measured | 19,089 | 0.797 | 489,000 |
| Indicated | 23,442 | 0.658 | 495,000 |
Total Measured
and Indicated | 42,531 | 0.720 | 984,000 |
| Inferred | 10,308 | 0.628 | 208,000 |
Mineral Resources that are not Mineral Reserves do not have demonstratedeconomic viability. The Mineral Resource Estimate was completed by Mr.William Lewis, B.Sc., P.Geo. and Ing. Alan San Martin, MAusIMM of Micon,and was prepared using CIM definitions for Mineral Resources asrequired by National Instrument 43-101. The mineral resource estimatewas based on a gold price of US$1,100 per ounce and a 0.131 g/t goldcutoff grade.
The increase was obtained from a limited step-out drill program of 534holes of core and reverse circulation drilling totaling 51,174 meterscompleted between January and May of 2010.
The drilling was concentrated in three areas: 1) northwest of the mainorebody, 2) southeast of the orebody, and 3) along the southwest flankof the current pit. The Proven and Probable Reserve increases arelocated contiguous to the northwest, the southeast and the southwest ofthe currently defined pit limits.
The increased reserve and resource follows upon the commencement ofcommercial production in early April, 2010. The size of the goldmineralization zone, its presence within large shear zones and thecontinuous nature of the gold within the zones form the basis ofmanagement's expectation that planned additional drilling could lead to asignificant increase in the resource available to be mined at SanFrancisco and could potentially also lead to the discovery of additionalsatellite deposits within the existing land package.
The previous Proven and Probable Reserves were 611,000 ounces gold (22.6Mt grading 0.84 g/t Au), as reported in the March, 2008 PreliminaryFeasibility Study prepared by Micon.
This press release was reviewed and prepared by Lawrence A. Dick, Ph.D.,P.Geo, a director of the Company, who is recognized as a QualifiedPerson under the guidelines of National Instrument 43-101 and by MiguelSoto, P. Geo., a director and the COO of the Company. Pursuant toNational Instrument 43-101, Mr. William Lewis, B.Sc., P.Geo. and Mr.Mani Verma, M.Eng., P.Eng., both of Micon International Ltd, (Micon), ofToronto, Ontario are the independent Qualified Persons responsible forthe Mineral Reserve and Mineral Resource Estimate. Each of Mr. Lewis,Mr. Verma, Mr. Dick and Mr. Soto have read and approved the contents ofthis news release.