Purchase to lower capex for new mine project by US$40-60M
VANCOUVER—Timmins Gold Corp. has announced an agreement with a Mexican subsidiary of Goldcorp Inc. to acquire a process plant and auxiliary equipment the Vancouver-based company can use in the construction of its Ana Paula project.
Until the mine began its closure last year, GoldCorp’s process plant and equipment was used in the operation of its El Sauzal Mine in Chihuahua, Mexico.
Timmins Gold’s recently acquired Ana Paula project, which it is currently developing, is located in Guerrero, Mexico. The company said a preliminary economic assessment of the site indicates a high-margin, rapid payback project.
“The purchase of the El Sauzal Plant is projected to save in the range of US$40-60 million in initial capital expenditure when Timmins Gold constructs Ana Paula, not only in terms of equipment and infrastructure direct costs, but also indirect costs and EPCM costs,” Timmins Gold’s CEO Bruce Bragagnolo said.
“In addition, it will de-risk the project by reducing the risk of both equipment capex overruns and delays in scheduling equipment deliveries,” he added.
The total purchase price for Goldcorp’s plant and equipment is $8 million, made up of cash, share issuance and future cash. In addition, Goldcorp will make a $6 million investment in Timmins Gold by way of non-brokered private placement. The deal will bring Goldcorp’s share of Timmins to 9.9 per cent of outstanding common shares.
Timmins noted the El Sauzal process plant is a nominal 6,000 tonne per day milling and processing facility with a cyanide circuit and a carbon-in-pulp circuit.