Timmins and Sentry Find Balance for Future of Company

POSTED ON July 02, 2014 BY Travis McPherson
CATEGORY Stories, Timmins Gold,

Timmins' San Francisco mill (Photo: Timmins Gold Corp.)

This morning, after a month of battling, Timmins Gold (TMM:TSX) and their 17% dissident shareholder, Sentry Investments have come to an agreement on the composition of the company's Board of Directors. After Sentry proposed a new slate, the investment fund that manages over $14 billion in assets accepted Timmins' proposed Board of seven nominees as long as they could nominate one member themselves.

The Board of eight nominees now includes: George Brack, Bruce Bragagnolo, Bryan Coates, Stephen Lang, Luc Lessard, Paula Rogers, Jose Vizquerra Benavides (all from Timmins) and Anthony Hawkshaw (Sentry's nominee).

Kevin MacLean, Senior Vice-President and Senior Portfolio Manager at Sentry said, "Timmins Gold has assembled an excellent group of experienced and independent mining industry professionals to guide the Company. I congratulate the Company and the Special Committee for its efforts, the high quality of its nominees and its willingness to take Sentry's objectives and concerns into account."

Added Bruce Bragagnolo, Timmins Gold's CEO, "With this agreement we can move forward without the expense and distraction of a continuing proxy contest. We will continue to execute on and evaluate Timmins Gold's business strategy, which has delivered superior performance and shareholder return."

Timmins owns the San Francisco mine in Sonora, Mexico which has been in production since 2010 and has since expanded from 10,000tpd to 24,000tpd. It produced 120,000 ounces in 2013.

Despite increasing the mine life and production capacity, investors and analysts alike have applied a discounted multiple to the shares of the company owing to the fact it only operates one mine.

The meeting of Timmins' shareholders was set for July 31st, but clearly Sentry was happy with the changes Timmins made. The wake-up call the initial proxy battle provided has appeased their need for a proxy battle. Sentry was not pleased with Timmins' performance and their inability to find and execute an accretive deal(s).

Accusations came out that Timmins' Board was entrenched and unwilling to sell the company, despite such transactions being in the shareholders' best interests.

Argonaut Gold is rumored to be interested in acquiring Timmins.

Whatever happened with the company in the past, this shakeup looks to be the most positive outcome as it creates a fresh Board that has a lot of deal experience (George Brack was an investment banker at Macquarie for years, Bryan Coates was former CFO of Osisko and now President of royalty spinout, Anthony Hawkshaw is the founder of Rio Alto and former CFO of Pan American Silver, the world's largest pure play silver company).

Shares were lifted over 40% after Sentry announced its intentions, although they are down slightly today (despite gold remaining near the $1330/oz mark):

TMM data by YCharts

Read: Timmins Gold Announces Settlement With Sentry Investments

Travis McPherson

trav@ceo.ca

Travis McPherson

trav@ceo.ca

Disclaimer:

Readers are advised that the material contained herein is solely for information purposes. Readers are encouraged to conduct their own research and due diligence, and/or obtain professional advice. Nothing contained herein constitutes a representation by the publisher, nor a solicitation for the purchase or sale of securities. The information contained herein is based on sources which the publisher believes to be reliable, but is not guaranteed to be accurate, and does not purport to be a complete statement or summary of the available data. Any opinions expressed are subject to change without notice. The owner, editor, writer and publisher and their associates are not responsible for errors or omissions. They may from time to time have a position in the securities of the companies mentioned herein, and may change their positions without notice. (Any significant positions will be disclosed explicitly. This article is not intended to meet your specific individual investment needs and it is not tailored to your personal financial situation. Nothing contained herein constitutes, is intended, or deemed to be — either implied or otherwise — investment advice. Thomas Humphreys, Pacific Website Company Inc., and other entities in which he has an interest, employees, officers, family, and associates may from time to time have positions in the securities or commodities covered in these publications or web site. We reserve the right to buy and sell such securities or commodities without notice to readers. While the information herein is believed to be accurate and reliable it is not guaranteed or implied to be so. The information herein may not be complete or correct; it is provided in good faith but without any legal responsibility or obligation to provide future updates. Neither Thomas Humphreys, nor anyone else, accepts any responsibility, or assumes any liability, whatsoever, for any direct, indirect or consequential loss arising from the use of the information in these publications or web site.

Forward-Looking Statements: This article may include certain "forward-looking information" within the meaning of Canadian securities legislation. Forward-looking statements include predictions, projections and forecasts and are often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "forecast", "expect", "potential", "project", "target", "schedule", budget" and "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions and includes the negatives thereof. All statements other than statements of historical fact included in this release, including, without limitation, statements regarding the potential of the Company's properties are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are based on a number of material factors and assumptions. Important factors that could cause actual results to differ materially from Company's expectations include actual exploration results, changes in project parameters as plans continue to be refined, future metal prices, availability of capital and financing on acceptable terms, general economic, market or business conditions, uninsured risks, regulatory changes, delays or inability to receive required approvals, and other exploration or other risks detailed herein and from time to time in the filings made by the Company with securities regulators. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ from those described in forward-looking statements, there may be other factors that cause such actions, events or results to differ materially from those anticipated. There can be no assurance that forward-looking statements will prove to be accurate and accordingly readers are cautioned not to place undue reliance on forward-looking statements which speak only as of the date of this article. The Company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Always do your own due diligence. We seek safe harbor.