In an August 28, 2015 article, SmallCapPower wrote about six gold juniors that Goldcorp Inc. (TSX: G) might be thinking about acquiring for the potential synergies based on location and/or cost of production. Just three weeks later, Goldcorp had taken a 10% stake in Timmins Gold and recent developments could pave the way for a much larger percentage.
Timmins Gold was already a profitable Mexico-focused gold miner before announcing the acquisition of Newstrike Capital in February 2015. Acquiring Newstrike’s Ana Paula project is expected increase Timmins Gold’s total Measured & Indicated gold resource by 75% along with a 34% jump in the gold grade. When all its projects are put into production, the company is expected to produce more than 300,000 ounces of gold annually at all-in-sustaining cash costs of less than US$780 per ounce.
Just three weeks later, on September 18, 2015, Timmins announced a private placement and process plant acquisition, the result of which being Goldcorp owning about 10% of Timmins Gold’s issued and outstanding common shares on an undiluted basis. TMM stock surged 26% on the news.
While this is far from an outright buyout, recent developments involving Timmins could change that in the near future. On October 6, the company reported that it had parted ways with its CEO and co-founder Bruce Bragagnolo. According to a recent Globe and Mail report, last year Timmins Gold got into a proxy fight with Toronto-based asset manager Sentry Investments Inc., a major investor. Sentry alleged that Timmins was not receptive enough to interest shown by potential buyers.
Could this mean Timmins Gold will soon be shopped?
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