ovais.habib@scotiabank.com > reports on TMM > target $.25It behoves me to agree with Ovais, so will Sell @ a loss & may if possible try to trade in the & $.18 > $,22 range
GLTA
Company Profile Timmins Gold Corp. (Timmins) is a Vancouver-based gold producer with the operating San Francisco open-pit heap leach gold mine in Sonora, Mexico, the Caballo Blanco gold development project in Veracruz, Mexico and the Ana Paula gold development project in Guerrero, Mexico. The company plans to continue building shareholder value through optimization of gold production at San Francisco in addition to exploration and development of existing projects. Business Mix (Based on revenues unless otherwise noted) 100% Gold Comparable Companies (TSX unless otherwise noted) AGI, AR, ASR, P, RIO Recent Update Text as of 3NOV15 . Timmins reported Q3/15 production of 23.4 koz Au, which was 18% below our 28.6 koz estimate. EPS and CFPS were also below estimates. . The production shortfall was largely due to lower-than-expected grade (0.51 g/t Au act. vs. 0.58 g/t est.). The production shortfall and a higher strip rate led to total cash cost (TCC) of $1,026/oz (vs. $860/oz est.). . With the lower gold price environment, TMM announced a revised mine plan at San Francisco. Where previously mining was to continue until 2022, under the new plan mining is to cease in mid-2016, followed by residual leaching until early 2017. As a consequence, TMM recorded a $227M impairment charge with the latest financial results. . 2015E production guidance was reduced to ~90koz (vs. 100-110 koz old) at TCC of $1,000-$1,050/oz (vs. $875-$925/oz old). TMM also provided 2016E guidance of 65-70 koz at TCC of $700-750/oz. . After incorporating the new shortened mine plan, cost reductions, and less exploration value into our valuation, our NAVPS estimate declines to C$0.26 (vs. C$0.45 old). . The reduction in our NAVPS estimate prompts a reduction in our target price to C$0.25/sh (vs. $0.50 old). While we believe the latest mine plan revisions to be a prudent course of action, we expect investor interest in Timmins to remain muted in the absence of a gold price recovery or demonstrable progress on strategic financing initiatives. Ovais Habib (Scotia Capital Inc. - Canada) It / (416) 863-7141 EDGE Scotiabank GBM F