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TORONTO,
ONTARIO--(Marketwire - Aug. 5, 2009) - Lake Shore Gold Corp. (TSX:LSG)
("Lake Shore Gold" or "the Company") today reported
financial and operating results for the second quarter and first half
of 2009. Key operating highlights included:
- Sinking the Timmins shaft to the 650 Level, with the 650 shaft
station being completed and development towards the Ultramafic Zone
advancing by 71 metres to date with bulk sampling to commence by the
end of August;
- Advancing the Timmins ramp a total of 1,060 metres (approximate
vertical depth of 160 metres) as of June 30th (1,215 metres or 180
metre vertical depth currently) with work during the quarter largely
focused on development and advanced exploration work to better define
and expose the vein systems in the Veins 1 and Main zones on the 50,
60, 80 and 90 metre levels;
- Limited processing at the Bell Creek Mill, mainly related to testing
the circuit and "bedding" the Mill (457 ounces of gold poured
in July);
- Deliveries from Timmins Mine to the Bell Creek Mill to increase in
the third quarter as bulk sampling commences from both the ramp and the
650 Level in the shaft;
- Commencing the refurbishment of the secondary ball mill at the Bell
Creek Mill, which will increase the Mill's capacity to 1,500 tonnes per
day during the third quarter, with processing at the Bell Creek Mill to
ramp up in support of the Company's target of 30,000 ounces of gold by
year end;
- Undertaking an advanced exploration program at the Company's Bell
Creek Complex, including de-watering and rehabilitating the existing
Bell Creek shaft and collaring a ramp at Bell Creek to first be
connected to the Bell Creek Mine workings and then to be driven across
Bell Creek to the contiguous Schumacher to the Vogel properties;
- Reporting encouraging exploration results at Thunder Creek, including
Hole TC09-68b, which included 12.75 gpt Au over 83.40 metres and
encountered mineralization in a new, second porphyry unit near the
bottom of the hole; and,
- Subsequent to the end of the quarter, reporting encouraging drill
results at Bell Creek, including 12.63 gpt Au over 11.65 metres, with
the eastern plunging system identified at Bell Creek being extended to
a plunge length of 1,150 metres from surface and 500 metres along
strike and the system remaining open along strike and at depth.
Project spending in the first half of 2009, including exploration
expenditures of $5.9 million, totaled $40.5 million (excluding non-cash
charges and changes in working capital). Cash and cash equivalents at
March 31, 2009 totaled $93.8 million, excluding approximately $5.1
million in reclamation bonds. On March 5, 2009, the Company completed a
bought deal equity financing involving the issuance of 30,615,871
common shares at a price of $1.55 per share and 6,616,185 flow-through
common shares at a price of $2.00 per share for net proceeds of $57.0
million.
Anthony (Tony) Makuch, President and CEO of Lake Shore Gold, commented:
"We continue to advance our development plans on schedule and
budget. At our Timmins Mine, mill feed will increase as bulk sampling
commences from both the ramp and the 650 Level in the shaft. The Bell
Creek Mill circuit has performed very well during operating campaigns,
at times exceeding 900 tonnes per day. We are close to completing the
refurbishing of the secondary ball mill circuit at the Mill, as well as
construction of a cyanide destruction plant and improved sampling
system, which will allow the Mill to operate at a capacity of 1,500
tonnes per day and to increase throughput over the balance of the year.
At the Bell Creek Complex, we are progressing advanced exploration work
with the Bell Creek shaft de-watered down to 110 metres and the ramp
having advanced 330 metres. Also very significant is the exploration
success we continue to achieve at our properties, particularly Thunder
Creek and Bell Creek. We recently reported our best results to date from
both properties, which confirm our view that each contains a large gold
system with the potential to support profitable, long-life mining
operations."
Second Quarter and First Half 2009 Operations Review Six months ended Project and Exploration Spending ($'000) June 30, 2009 ---------------------------------------------------------------------------- Resource property and deferred exploration Timmins Mine $22,728 Bell Creek Mill 5,121 Bell Creek mine and exploration properties 6,821 Thunder Creek Joint Venture (Company's share) 1,366 Blakelock - Little Abitibi properties 62 Casa Berardi net 452 Ti-pa-haa-kaa-ning (Company's share) 82 Other projects 18 -------- $36,650 -------- -------- Property, Plant and equipment Timmins Mine $541 Bell Creek Mill 397 Bell Creek Mine 2,947 -------- $3,886 -------- -------- ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Total Project and Exploration Spending $40,536 ---------------------------------------------------------------------------- ----------------------------------------------------------------------------
Timmins
Mine Project
During the first half of 2009, the Company spent $23.3 million on the
Timmins Mine project (including advanced exploration, ramp development
and exploration drilling expenditures).
The Company is carrying out an advanced exploration program for
delineation of bulk sampling of the Footwall, Ultramafic and Main Zones
of the property, along with supporting an underground diamond drilling
program to both expand the currently identified probable reserve and
identify new resources. During the first half of 2009, the Company's
spending on advanced exploration at Timmins totaled $11.7 million.
On May 13, 2009, the Timmins shaft reached the 650 Level. The 650 Level
shaft station was completed as of June 2, 2009 and development from the
650 Level towards the ore in the Ultramafic Zone, representing
approximately 60% of the Timmins Mine deposit, commenced in July. Bulk
sampling is expected to begin by the end of August. The shaft has
currently been deepened to the 668 metre level in order to place the
shaft sinking structure below the 650 Level. The current work plan
envisions sinking the shaft to the 710 metre level by year end, with
consideration currently being given to continuing to deepen the shaft
to the 1200 metre level. A decision on deepening the shaft is
anticipated by the end of the year and will be assisted by results from
diamond drilling planned to be carried out in the third and fourth
quarters from surface and underground on the 650 Level. A favourable
decision to deepen the shaft is not expected to affect the Company's
production plans.
At June 30, 2009 the Timmins ramp had advanced approximately 1,060
metres and has currently been driven approximately 1,215 metres (to a
vertical depth of approximately 180 metres). Work in the ramp during
the second quarter largely focused on development and advanced
exploration work to better define and expose the vein systems in the
Veins 1 and Main zones on the 50, 60, 80 and 90 metre levels. This work
involved moving significant waste and development material. Project
spending related to the ramp during the first half of 2009 was $10.3
million.
Bell Creek Mill
The Bell Creek Mill, acquired in 2007 together with the Bell Creek
Mine, was made operational in December 2008 at a capacity of 800 tonnes
per day. Processing of low-grade material from development and advanced
exploration work at the Timmins Mine ramp commenced at the Bell Creek
Mill near the end of the first quarter. The Mill is initially running
in campaigns processing material as stockpiles are established. The
Mill will run on a more continuous basis during the second half of the
year as deliveries from the Timmins Mine increase, both from the ramp
and shaft. In addition, near the end of the second quarter work
commenced to refurbish the secondary ball mill at the Bell Creek Mill,
which is expected to increase the Mill's capacity to 1,500 tonnes per
day during the third quarter. In July, the Company poured 457 ounces of
gold at the Bell Creek Mill.
Spending at the Bell Creek Mill in the first half of 2009 totaled $5.5
million, mainly related to new surface buildings, the construction of a
cyanide destruction plant and other mill improvements and repairs.
Bell Creek Mine, Vogel and Schumacher
In May 2009, the Company commenced an advanced exploration program at
its 100% owned Bell Creek Complex following receipt of Closure Plan
approval and the completion of an Exploration Agreement with four First
Nations. The Bell Creek Complex advanced exploration program includes
de-watering and rehabilitating the existing Bell Creek Mine shaft and
workings and collaring a ramp at Bell Creek to be connected to the Bell
Creek Mine workings and then to be driven across the Bell Creek
property to the contiguous Schumacher and Vogel properties in order to
access known mineralization at Vogel. As at August 4, 2009, the Bell
Creek shaft had been de-watered to the 110 metre level and the ramp had
been advanced 330 metres. Project spending related to the Bell Creek
Complex advanced exploration program during the first half of 2009
totaled $7.1 million.
Exploration Expenditures
Exploration expenditures for the first half of 2009 totaled $5.9
million (representing 47,123 metres of drilling) and included $1.3
million at the Timmins Mine project, $1.4 million at Thunder Creek,
$2.7 million at Bell Creek, Vogel and Schumacher, $0.5 million at Casa
Berardi and the remainder at other projects.
On May 4, 2009, the Company announced encouraging results from 20 holes
(12,297 metres) at Bell Creek and Vogel, including holes at Bell Creek
confirming at least a 200 metre easterly extension of mineralization
from the Bell Creek mine workings; holes intersecting mineralization
350 metres below the Bell Creek mine workings; and holes intersecting
mineralization 225 metres south of the historic mine workings and near
the collar location for the new Vogel ramp.
On May 5, 2009, the Company announced results from Thunder Creek,
including hole TC09-68, with an intercept of 10.09 grams per tonne gold
over 4.70 metres, including 17.16 grams per tonne gold over 2.25 metres
and hole TC09-69a, which intersected 7.97 grams per tonne gold over
19.45 metres in the Rusk Horizon. Both of these holes intersected
multiple Porphyry horizons similar to those announced in an earlier
press release on March 31,2009.
On June 24, 2009, the Company announced the most encourage exploration
results to date from Thunder Creek, including Hole TC09-68b, which
intercepted 12.75 grams per tonne gold over 83.40 metres (13.73 grams
per tonne gold over 77.50 metres, including 24.68 grams per tonne gold
over 13.00 metres, 38.22 grams per tonne gold over 11.00 metres and
26.78 grams per tonne gold over 8.50 metres). The broad intercept in
TC09-68b spanned the full width of the Porphyry unit and also
intersected mineralization in the Rusk Zone as well as in a new, second
Porphyry unit discovered near the bottom of the hole.
Subsequent to the end of the second quarter, the Company announced
additional encouraging results from 16 holes and 7 wedge holes (12,593
metres) from the Bell Creek and Vogel properties on July 7, 2009. These
results included holes at Bell Creek which encountered attractive
grades and widths of gold mineralization below and to the east of the
historic resource. In addition, results at Vogel included intersecting
visible gold with assays of 22.50 grams per tonne gold over 1.00 metre,
8.39 grams per tonne gold over 1.60 metres and 7.06 grams per tonne
gold over 1.95 metres. The historic area of mineralization at Vogel has
been extended by 300 metres, to a total depth of 650 metres.
Additional results from Bell Creek were released on July 21, 2009 and
included 12.63 grams per tonne gold over 11.65 metres within a broader
intercept of 11.09 grams per tonne gold over 13.75 metres. Included
within the 12.63 grams per tonne gold intercept were 24.73 grams per
tonne gold over 2.20 metres and 23.16 grams per tonne gold over 1.50
metres. The July 21st results added a significant new dimension to the
Bell Creek project identifying a large gold system at depth where
drilling has demonstrated attractive grades and widths. The system,
which plunges eastward towards the Company's wholly owned Schumacher
property, where there is limited past drilling, has now been identified
to a total plunge length of 1,150 metres from surface and 500 metres
along strike and remains open both along strike and at depth.
Outlook
The year 2009 is critical for Lake Shore Gold as it progresses towards commercial
gold production, expected during the second half of 2010. Initial
processing of development material from the advanced exploration
program at the Timmins Mine project commenced near the end of the first
quarter 2009. A total of 30,000 ounces of gold is targeted for 2009
from bulk sample material and development ore mined from the Timmins
ramp and shaft and processed at the Bell Creek Mill, as part of the
ongoing advanced exploration program.
Near the end of the second quarter, the Company commenced work to
refurbish the secondary ball mill circuit at the Bell Creek Mill, which
is expected to increase the Mill's capacity to 1,500 tonnes per day
during the third quarter of 2009.
The Company commenced the Bell Creek Complex advanced exploration program
during the second quarter of 2009, which includes de-watering and
rehabilitating the existing Bell Creek Mine shaft and workings and
collaring a ramp at Bell Creek to be connected to the Bell Creek mine
workings and then to be driven across the Bell Creek property to the
contiguous Schumacher and Vogel properties. Work is expected to advance
on a schedule to allow bulk sampling at the Bell Creek Complex to
commence around the middle of 2010.
Project spending in 2009 is forecast at $89.0 million related to
advanced exploration work at the 100% owned Timmins Mine and Bell Creek
Complex, refurbishing and improvements at the Bell Creek Mill and
exploration progress. Based on its June 30, 2009 cash position of $93.8
million and the proceeds from planned gold sales in 2009 and 2010, Lake
Shore Gold is positioned to finance its currently planned activities
for 2009 and 2010, including bringing the Timmins Mine to commercial
production, advancing the Bell Creek and Vogel projects and completing
other planned operating, development and exploration activities.
More information about Lake Shore Gold's second quarter and first half
2009 results and financial condition and liquidity is available in the
Company's consolidated financial statements and management's discussion
and analysis, which have been filed on sedar at www.sedar.com and
posted to the Company's website at www.lsgold.com.
Lake Shore Gold will also host a conference call and webcast on
Thursday, August 6, 2009 at 10:00 am EST to discuss the Company's
second quarter 2009 performance. Those wishing to access the call can
do so using the telephone numbers listed below. The call will also be
webcast and available on the Company's website.
Participant call-in: 416-641-2140 or 800-766-6630 Replay number: 416-695-5800 or 800-408-3053 Replay ID: 6640704 Available until: 11:59pm, August 13, 2009
About Lake Shore Gold
Lake Shore Gold Corp. is a mineral development and exploration company
that is moving towards gold production through its 100%-owned Timmins
Mine project, where the Company is sinking a shaft and driving a ramp
to access shallow mineralization. The wholly owned Bell Creek Mill, located
on the east side of Timmins, was refurbished to a capacity of 800
tonnes per day as of the end of 2008, with the Mill's capacity
currently being increased to 1,500 tonnes per day. The Company recently
commenced an underground advanced exploration program at its Bell Creek
Complex, including the Bell Creek Mine, Schumacher and Vogel
properties, which have the potential to become the Company's second
mining project in the Timmins Camp, and is pursuing a number of other
highly prospective exploration properties in Northern Ontario and
Quebec. Lake Shore Gold's common shares trade on the TSX under the
symbol LSG.
Forward-looking Statements
Certain statements in this press release relating to the Company's
exploration activities, project expenditures, business plans and
financial and operating performance are "forward-looking
statements" within the meaning of securities legislation. The
Company does not intend, and does not assume any obligation, to update
these forward-looking statements. These forward-looking statements
represent management's best judgment based on current facts and
assumptions that management considers reasonable, including that
operating and capital plans will not be disrupted by issues such as
mechanical failure, unavailability of parts, labour disturbances,
interruption in transportation or utilities, or adverse weather
conditions, that there are no material unanticipated variations in
budgeted costs, that contractors will complete projects according to
schedule, and that actual mineralization on properties will not be less
than identified mineral reserves. The Company makes no representation
that reasonable business people in possession of the same information
would reach the same conclusions. Forward-looking statements involve
known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company to
be materially different from any future results, performance or
achievements expressed or implied by the forward-looking statements. In
particular, fluctuations in the price of gold or in currency markets
could prevent the Company from achieving its targets. Readers should
not place undue reliance on forward-looking statements. More
information about risks and uncertainties affecting the Company and its
business is available in Lake Shore Gold's most recent Annual
Information Form and other regulatory filings which are posted on sedar
at www.sedar.com.
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