This news totally clears the way forward for TMM by removing the short term debt and allowing TMM to focus on optimizing San Fran and developing Ana Paula. This is clearly a milestone and watershed event for TMM as it removes the uncertainty shareholders have been dealing with for 9 months.
WIth the Gold price hoving between $1250 and $1280, TMM is now in a great position to be re-rated. SF is on the cusp of being mined well beyond 2016 and Ana Paula development has greater access to the FCF generated by SF and therefore may have a development timeline reduction than previously anticipated.
All in all, no one can minimize the importance of this news and how this impacts TMM going forward: A lean company with strict cost controls, a profitable producing mine at current gold prices - possible til 2022, debt no longer an issue, that has significant future prospects with Ana Paula - a low cost gem.
Timmins to sell Caballo Blanco for $12.5M (U.S.) cash
2016-05-12 00:48 ET - News Release
Mr. Mark Backens reports
TIMMINS GOLD TO SELL CABALLO BLANCO GOLD PROJECT
Timmins Gold Corp. has entered into a definitive agreement with Candelaria Mining Corp. to sell 100 per cent of its interest in the Caballo Blanco gold project in Veracruz, Mexico, for cash consideration of $12.5-million (U.S.) and the assumption of the $5.0-million (U.S.) contingent payment.
Under the terms of the definitive agreement, Timmins will sell its interest in Caballo Blanco for aggregate consideration of:
- $3.5-million (U.S.) in upfront execution payments ($1.25-million (U.S.) received upon signing, $2.25-million (U.S.) within 15 business days postsigning; the execution payments are non-refundable if counterparty fails to close);
- $6.5-million (U.S.) payment upon closing on or before June 24, 2016;
- $2.5-million (U.S.) payment at the earlier occurrence of Candelaria receiving permits or June 24, 2017;
- Candelaria assumes the $5.0-million (U.S.) contingent payment obligation to Goldgroup Mining Inc.
"The sale of the Caballo Blanco project for a total consideration of $17.5-million (U.S.) is a significant event for Timmins Gold," stated Mark Backens, interim chief executive officer. "The cash proceeds from this sale will strengthen our balance sheet, which will enable settlement of our secured debt."