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Mexican miner Timmins Gold (TSX:TMM) has lost 22% for the year and hit a 52-week low of $1.58 after releasing its Q1 on Tuesday.
The company reported a 32% increase in profits of Can$12.7 million; however, the company also announced sharply higher cash cost per gold ounce of $759 compared t $516 a year ago due to recurring and non-recurring items.
“The recurring items include planned lower grade ore being extracted, additional cyanide and explosives consumption to aid in achieving higher gold recoveries and the industry-wide increases in key mining consumables prices such as cyanide and diesel,” wrote the company in a news release.
Non-recurring items were currency fluctuations, operational repairs and the strip ratio falling below the life-of-mine average during the current period.
“The company expects cash costs to be $700 per gold ounce for fiscal 2012 as economies of scale are realized as a result of expanded throughput.”
Commentator Peter Grandich said that the shares are at 200-day key support level.
Timmins Gold operates the San Francisco gold mine, an open pit heap leach operations in Sonora, Mexico.
