UPDATE: Jennings Capital Upgrades Timmins Gold

Jennings Capital upgraded Timmins Gold Corp TGD from Sell to Buy with a C$1.25 price target.

Analyst Stuart McDougall noted that "TMM released preliminary Q3 operating results, reporting production and sales of 26,671 oz gold and 18,600 oz silver. We were looking for 27,862 oz and 19,503 oz, respectively. The Company noted that heavy rains in September restricted access to the pit, necessitating the use of lower-grading stockpiles."

"TMM reiterated full year guidance for 115,000-125,000 oz, at a cash cost of $800/oz. Adjusting for the Q3 operating results, we expect the Company to achieve the higher end of that production guidance, at similar costs," according to McDougall.

"Operating CFPS for 2014 is now forecast at $0.27, down from $0.29, reflecting updates for the Q3 operating results, including lower gold prices ($1,284, versus our estimate for $1,300/oz).

"Our target remains based on an average of 6.0x estimated 2014 OCFPS and 1.0x NAV, which is now $1.66/share, down slightly from $1.72/share."

Timmins Gold Corp closed at $1.27 on Friday.