Timmins Gold Corp.

Timmins Gold Corp.

June 21, 2012 06:30 ET

Timmins Gold Announces Extension of Credit Facility With Sprott Resource Lending Partnership

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 21, 2012) - Timmins Gold Corp. (TSX:TMM)(NYSE Amex:TGD)(NYSE MKT:TGD) is pleased to report it has signed a term sheet with Sprott Resource Lending Partnership (the "Lender") extending the term of its existing $18 million credit facility. The extension is subject to final documentation.

The new credit agreement will have a term of 18 months from July 29, 2012. Interest will be payable at the rate of 8% per annum. Payment of the principal amount outstanding will be made at the end of the term. In consideration of the extension a bonus payment of 2% of the principal amount of the loan is payable in common shares of Timmins Gold at a price equal to a 10% discount to the 10 day weighted average closing price of the shares of Timmins Gold. In the event the loan has not been repaid by July 28, 2013, a further fee of 1% of the loan amount outstanding on that date will be paid to the Lender in shares priced at the same discount on that date. There is no prepayment fee.

"The extension and repricing of our credit agreement provides Timmins Gold with a strong financial base," stated Bruce Bragagnolo, CEO of Timmins Gold Corp. "With cash from operations being added to the balance sheet on a monthly basis even after paying for expansion and exploration, the extension provides the Company with operational flexibility. We are pleased to continue our excellent relationship with Sprott Lending."

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 an open pit heap leach operation. Timmins Gold has forecast production at a rate in excess of 100,000 ounces of gold per year. (Micon International NI 43-101F1 Technical Report dated November, 2011).

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Certain statements contained herein may constitute forward-looking statements and are made pursuant to the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995 and Canadian securities laws. Forward-looking statements are statements which relate to future events. Such statements include estimates, forecasts and statements as to management's expectations with respect to, among other things, business and financial prospects, financial multiples and accretion estimates, future trends, plans, strategies, objectives and expectations, including with respect to production, exploration drilling, reserves and resources, exploitation activities and events or future operations. Information inferred from the interpretation of drilling results and information concerning mineral resource estimates may also be deemed to be forward-looking statements, as it constitutes a prediction of what might be found to be present when, and if, a project is actually developed.

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