Scotia Capital maintains $2.25 2014 Recent Update Text as of 30APR14
. Timmins reported Q1/14 adjusted EPS of $0.05, missing our estimate of $0.07 and
consensus of $0.06 largely due to higher operating costs.
. Cash costs for the quarter of $703/oz were 6% above our estimate of $663/oz on
higher mining, crushing, and gold recovery costs. The company reported AISC of
$790/oz in Q1/14, continuing the downward trend from $857/oz in Q4/13.
. Due to higher-than-expected capex (payment of payables related to 2013 capital
items) of $9.9M vs. our estimate of $6.3M, Timmins reported a slight $2.6M
decline (net of financing proceeds) in its cash position at quarter-end vs. our
estimate of a ~$5M increase. CFPS of $0.12 was a cent above our estimate of
$0.11. We will be looking for the company to add ~$6M to its cash balance in
Q2/14.
. Recall the company pre-released Q1/14 production of 35.4 koz. Guidance for 2014
is unchanged at 115 to 125 koz at a cash cost of about $800/oz. We model 2014
production of ~124 koz at $813/oz.
. Operationally, we expect slight QoQ sequential declines in production for the
balance of 2014 as the leach pad height increases (TMM began stacking on a new
pad in Q4/13) and as the average grade of the stacked material trends low