Timmins Gold Corp.: San Francisco Mine Gold Reserves Increased by 28%

VANCOUVER, BRITISH COLUMBIA--(Marketwire - 11/16/10) - Timmins Gold (TSX-V:TMM - News) is pleased to announce an increase in the Mineral Reserve and Mineral Resource estimate for its wholly owned San Francisco open pit gold mine located in northern Sonora, Mexico. Proven and Probable Reserves were increased from 611,000 ounces to 780,000 ounces, an increase of 28%. The increased reserve and resource estimate follows upon 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), of Toronto, Ontario, was prepared using CIM definitions for Mineral Reserves as required by National Instrument 43-101. An updated technical report will be filed on SEDAR shortly. The Mineral Reserve is found in Table 1 below.

Table 1 - Mineral Reserve within the San Francisco Pit with Topography at August 31, 2010.

 

------------------------------------------------------------------------
                       Metric Tonnes                           Contained
Ore Type                      (1,000)         Gold g/t       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. The reserve includes a dilution factor of 12% according to the type of mineralization and size of the blocks modeled. An internal cutoff grade of 0.16 g/t gold was used. Weighted average gold recovery is estimated at 70%.

Measured and Indicated Resources for the San Francisco mine have increased to 984,000 ounces of gold and the Inferred Resource has increased to 208,000 ounces of gold. This represents an increase of 10% to the combined Measured and Indicated resource estimate published in April, 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).

 

------------------------------------------------------------------------
                       Metric Tonnes                           Contained
Resource Category              (1000)         Gold g/t       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 demonstrated economic 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 as required by National Instrument 43-101. The mineral resource estimate was based on a gold price of US$1,100 per ounce and a 0.131 g/t gold cutoff grade.

The increase was obtained from a limited step-out drill program of 534 holes of core and reverse circulation drilling totaling 51,174 meters completed between January and May of 2010.

The drilling was concentrated in three areas: 1) northwest of the main orebody, 2) southeast of the orebody, and 3) along the southwest flank of the current pit. The Proven and Probable Reserve increases are located contiguous to the northwest, the southeast and the southwest of the currently defined pit limits.

The increased reserve and resource follows upon the commencement of commercial production in early April, 2010. The size of the gold mineralization zone, its presence within large shear zones and the continuous nature of the gold within the zones form the basis of management's expectation that planned additional drilling could lead to a significant increase in the resource available to be mined at San Francisco and could potentially also lead to the discovery of additional satellite deposits within the existing land package.

The previous Proven and Probable Reserves were 611,000 ounces gold (22.6 Mt grading 0.84 g/t Au), as reported in the March, 2008 Preliminary Feasibility 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 Qualified Person under the guidelines of National Instrument 43-101 and by Miguel Soto, P. Geo., a director and the COO of the Company. Pursuant to National Instrument 43-101, Mr. William Lewis, B.Sc., P.Geo. and Mr. Mani Verma, M.Eng., P.Eng., both of Micon International Ltd, (Micon), of Toronto, Ontario are the independent Qualified Persons responsible for the Mineral Reserve and Mineral Resource Estimate. Each of Mr. Lewis, Mr. Verma, Mr. Dick and Mr. Soto have read and approved the contents of this news release.

About Timmins Gold

Focused solely in Mexico, Timmins Gold Corp is in commercial gold production at its wholly owned San Francisco gold mine in Sonora, Mexico. The mine is a past-producing open pit heap leach operation. Timmins Gold has forecast production at a rate in excess of 80,000 ounces of gold per year at a life of mine cash cost of approximately $410 per ounce (Micon International Preliminary Feasibility Study, March 2008).

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 our 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 suggestions herein. Except as required by applicable law, Timmins Gold does not intend to update any forward-looking statements to conform these statements to actual results.

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