Sunday 25th September 2016

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The Romance of Mining

Bruce Bragagnolo of Timmins Gold Explains His Success in Mexico

By Kevin Michael Grace
2010 Vancouver Mining Forum Special

Bruce Bragagnolo, CEO of Timmins Gold Corp, is understandably proud of his company’s rapid progress: “From going public in 2006 to our first gold pour was three years—and one of those years was the worst market in history.”

Timmins, Ontario, calls itself “the city with the heart of gold.” And a piece of Bragagnolo’s heart remains there, even though he lives in Vancouver, and his company’s operations are located in Mexico. “I grew up in Timmins, and that’s why it’s called Timmins Gold,” he explains. “We all worked in the mines as students, and when you grow up in a mining town, you get a sense of the culture and romance of mining.”

Timmins Gold Corp

The Timmins Gold story began in 2003 when Bragagnolo, a securities lawyer, met an engineer and mining veteran called Arturo Bonillas, now Timmins’ President. He recounts, “I realized he had the expertise to find contacts and to both find properties and manage them. Mexico has a highly-talented group of miners and explorers that requires funding from the North American capital markets; so it’s a great marriage.”

You have to know Mexico. You can’t just waltz into it —Bruce Bragagnolo

Bragagnolo stresses that success for Canadian junior miners in Mexico is dependent on partnership and sensitivity. “You have to know Mexico. You can’t just waltz into it and say, ‘Here we are,’” he declares. “You have to have a working relationship, and I think that’s what some of the other companies who go down there just don’t quite get. What really works down there is building relationships with people and keeping them intact—going for dinner, telling jokes, having a few drinks—they’ve got to feel they’re part of your social circle.”

Business in Mexico is more than merely contractual, according to Bragagnolo. “I think some people ignore the social aspect of the Latino character, and they get legalistic,” he says. “Trying to push here is not a good thing.” And neither is affecting airs of North American superiority. “Having a Mexican operating team and management goes a long way in that country.” Timmins Gold is based on a division of responsibility: “Arturo looks after the Mexican side, and I look after things in Canada.”

Timmins’ first gold pour at its San Francisco mine, a historic producer bought in 2007, was last December, and it looks to produce 100,000 ounces a year for five years, based on a 2007 NI 43-101 estimate. But Bragagnolo reports that a new estimate is expected shortly. His “focus for next year” is expanding reserves and resources in the San Francisco area, as well as at the company’s other Mexican projects. The good news about that is that “In Mexico, most of the deposits are traceable on surface. So you don’t have to go deep, and it’s real inexpensive to explore and work there.”

Timmins recently suffered some bad news, when its merger proposal to Capital Gold Corporation was rejected by management, which elected to sign a merger agreement with Gammon Gold Inc. But Bragagnolo remains confident. He points out that the Timmins offer was more lucrative and that Capital’s Mexican operations are only 60 kilometres away from his, which means a merger would allow them to “control the entire district.” In any event, he says, Timmins’ bid has received “overwhelming” support from Capital shareholders. He fully expects Capital’s management to “reach out” to Timmins. Failing that, he advises, “We’re going to start taking affirmative action.”

Timmins Gold is one of the featured companies at Canaccord’s 2010 Vancouver Mining Forum, October 14. When asked what it is that separates the best junior miners from the rest, he replies, “Three things. The level of competence and expertise of management–bad management can screw up a good project. The production profile. And the potential for adding resources and reserves.” He adds that for investors there is no substitute for technical analysis, while admitting, “I know that’s difficult, because you get inundated by information from so many companies.”

That said, Bragagnolo likes the prospects for the junior mining sector as a whole. He believes that the near-disaster of the 2008 crisis has made clear the difference between an economy that works and one that doesn’t. He concludes, “I had a conversation with my family a while ago, and I told them we’re going back to doing things the old fashioned way, to looking at things, like commodities, that are tangible. All the paper manipulation and financial wizardry is going out the door because it doesn’t generate wealth; it just sucks wealth out of the system.”


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