Timmins Gold has commenced drifting into the underground veins parallel to the south wall of the San Francisco pit.

The drift is part of a pilot phase designed to test the mining and processing of the underground ore in preparation for full scale underground mining.

As originally announced in the Company’s press release of February 12 2015, previous drilling had delineated three mineralized veins near the south wall of the San Francisco pit, which averaged approximately 4 m in width, with grades ranging between 2.5 and 5.0 g/t gold.

These veins are located within 50 to 100 m of the current south pit wall, dipping to the N-NE varying between 30 – 60 degrees. Veins extending along 300 m of strike and 200 m of dip have been delineated to date.

The pilot phase will involve drifting 90 meters into the south wall of the pit to access the veins followed by 200 meters of lateral drifting to extract 14,000 tonnes of ore. The pilot phase will allow the Company to test ground conditions, mining costs, grade and metallurgical recovery of the underground ore.

Additionally, the pilot phase will provide efficient platforms for further underground infill and exploration drilling. Previous drilling by Timmins Gold in 2011 below the planned pit bottom identified high grade structures as deep as 800 m from surface below the north wall of the pit.

These results support the theory of the Company’s geological team that the presently identified mineralized system may extend to greater depths. This is consistent in mesothermal systems, which have significant depth extent, and have the potential to yield high grade feeder systems at depth.

Timmins Gold plans to process ore recovered from the pilot phase through selective fine crushing and heap leaching. The effect of crush size and heap leach parameters on the metallurgical recovery of the underground ore is being investigated. Timmins Gold estimates the pilot phase will take 3-4 months to complete. There is no net cost budgeted for the pilot phase as the cost for the program is expected to be more than recouped by revenue derived from recovery of the gold contained in the bulk sample.

A highly experienced Mexican underground mining contractor has been selected to carry out the underground operations.