|
 |
|
|
March 28, 2008
|
|
Lake Shore Gold Announces 2007 Year End Results and Provides 2008 Outlook
|
TORONTO, ONTARIO--(Marketwire - March 28, 2008) - Lake Shore Gold Corp. (TSX:LSG) ("Lake Shore" or "the Company") is pleased to provide a summary of the progress on its exploration projects in Ontario and Quebec as part of its yearend reporting, and to give an outlook for the Company's activities in 2008. The complete Management's Discussion and Analysis and 2007 year-end Financial Statements have been filed on SEDAR at www.sedar.com and are also available on the Company's website at www.lsgold.com.
Timmins West
Drilling at Timmins West during 2007 focused on testing stratigraphy in the vicinity of the exploration shaft and exploring for potential mineralization at depth within the ultramafic body which lies along the volcanic-sediment contact zone. A total of 10,958 metres was drilled in 2007, and gold mineralization has now been delineated to a depth of more than 1,400 metres down plunge (1,200 metres below surface).
A pre-feasibility study was completed for the Timmins West deposit in the third quarter, and successfully converted more than 90% of the previously identified mineral resources into probable mineral reserves, and showed positive economics to provide the basis for a decision to begin an advanced underground exploration program and bulk sample of the deposit. (For details refer to Lake Shore's press release dated August 28, 2007, available on the Company's website at www.lsgold.com.) The advanced underground exploration program was started in the fourth quarter, and involves development of an exploration shaft and level development to provide a platform for further in-fill drilling of the current reserves, to explore prospective areas outside of the current reserve envelope and to extract a representative bulk sample from several of the major mineralized zones. The advanced underground exploration program is expected to be complete by the end of 2009.
Bell Creek Complex (Bell Creek, Vogel and Schumacher)
In December 2007 Lake Shore completed the acquisition of the Bell Creek mine and mill from the Porcupine Joint Venture. The acquisition is an important component of Lake Shore's strategy to transform itself from a junior exploration company into a gold producer. Lake Shore plans to have the mill operational by the fourth quarter of 2008. A number of opportunities to provide ore material to the mill and generate cash flow in early 2009 are being assessed, including from the Company's own resources at the Timmins West vein and main zones, high-grade gold veins on the Vogel property, and third party toll milling opportunities.
Lake Shore is also developing a strategy for the Bell Creek Complex, which includes the Bell Creek Mine and adjacent Vogel and Schumacher properties. The study will include a proposed underground exploration program of the Vogel and Schumacher mineralization via a surface ramp, and through the Bell Creek mine shaft for the resources at Bell Creek.
Thunder Creek
In the fourth quarter of 2007 Lake Shore completed the requirements to earn a 60% interest in the Thunder Creek property which is contiguous to Timmins West. As part of the Company's earn-in right, a joint venture will be established with West Timmins Mining Inc., with Lake Shore as the operator. All future work will be funded on a 60/40 pro-rata basis.
During 2007 Lake Shore completed 10,861 metres of drilling in 20 holes and extended holes at Thunder Creek, systematically testing the Rusk Zone as well as other exploration targets on the property. New high-grade gold mineralization was identified late in the year, (" Lake Shore intersects 24.61 grams gold per tonne over 7.0 metres at the Thunder Creek property in Ontario", press release dated December 4th, 2007), showing character similar to the Ultramafic Zone that hosts the majority of the gold mineralization at Timmins West. This discovery opens up a new target for expansion of the Timmins West resource base.
Tipahaakaaning (Canopener)
During the second half of 2007, encouraging gold grain data was encountered from an overburden sampling program on the Tipahaakaaning property (formerly known as Canopener), a 50/50 joint venture with Superior Diamonds Inc. The gold grain data included a significant number of pristine gold grains, implying that these grains have not moved far in the overburden soil cover and suggesting a local bedrock source for the gold believed to be associated with a six-kilometre long structural zone.
The land position at Tipahaakaaning has been increased through the addition of 85 claims or 18,976 hectares, extending the favourable horizon to a strike length of approximately 22 kilometres. This latest staking includes a claim hosting an overburden gold grain anomaly located northwest of the original claim block, along an interpreted extension of the geology hosting gold mineralization.
Casa Berardi
During the third quarter of 2007, Lake Shore entered into a joint venture agreement with Aurizon Mines Ltd. ("Aurizon") to earn an undivided 50% interest in the Casa Berardi Exploration Property, located outside of Aurizon's existing mining leases and outside of its 100%-owned Casa Berardi Mine. The joint venture property covers a 30-kilometre strike length of the Casa Berardi deformation zone within a few kilometres to the east and west of the existing Casa Berardi gold mines and mill. Historical exploration data was received and a detailed compilation was conducted in the fourth quarter. The work program started in the first quarter of 2008 and will initially focus on the claim block located east of the Casa Berardi mines where Diamond drill and reverse circulation targets have been identified in the Lac Germain area.
Financing
On February 25, 2008 Lake Shore completed a private placement financing with Hochschild Mining Holdings Ltd., a subsidiary of Hochschild Mining plc. ("Hochschild") by issuing 28,172,302 Lake Shore common shares at $2.30 per share for total consideration of $64.7 million. The funds will be used for general corporate purposes including development of the Timmins West deposit and re-commissioning of the Bell Creek mill. The private placement resulted in Hochschild holding 19.99% of Lake Shore's issued and outstanding shares.
As part of the private placement financing, Lake Shore entered into a strategic alliance with Hochschild, whereby the Company has agreed, subject to approval of shareholders and the TSX, to issue additional common shares to Hochschild that will result in Hochschild owning approximately 35% of the issued and outstanding shares of Lake Shore. A shareholder vote will be held at the Company's Annual and Special Meeting on May 15, 2008. All shareholders of record on March 18, 2008 will be entitled to receive notice of and to vote at the Annual and Special Meeting.
Financial Results
Lake Shore is not in commercial production on any of its resource properties, and accordingly does not generate cash from operations. For 2007, the Company recorded a net loss of $1.1 million or $0.01 per share, compared with a net loss of $2.3 million or $0.02 per share in 2006.
Cash used in operating activities in 2007 was $2.7 million (2006-$1 million). Cash used in resource properties and deferred exploration activities for 2007 was $14.8 million compared to $10.3 million in 2006. In addition, in 2007, the Company spent $8.2 cash on the acquisition of the Bell Creek mine and mill. The Company incurred $7.6 million on advanced exploration, $2.3 million on construction in progress, $1.4 million on drilling and $1.3 million on geology on the Timmins West property.
As at December 31, 2007 Lake Shore had $11.9 million in cash. The Company does not have any Asset backed commercial paper and is thus not directly affected by the financial market fluctuations in the US.
2008 Outlook
In 2008 Lake Shore will continue to pursue its strategy to transition from a gold exploration company to a gold producer. The Company is building a strong team in the Toronto Corporate office and Timmins with expertise in mine development and operations.
At Timmins West, Lake Shore will continue to progress with the advanced exploration program to delineate bulk sampling of the Footwall, Ultramafic and Main Zones, and support an underground drill program to both expand the currently identified probable reserve and identify new resources. This work will involve shaft sinking and collaring of the 400 metre and 600 metre levels from the shaft. From the 600 metre level, development is planned to proceed to intersect the mineralized ore zones and provide Diamond drill platforms on the level. This work will continue throughout 2008 and the first half of 2009, leading to the start of pre-production development of the mine in the second half of 2009.
In addition, the pre-feasibility study for the Timmins West property which was completed in the third quarter of 2007 will be re-evaluated to assess the potential of the mine, including identifying the scope of work required, mining methods, production rates, mine life, capital cost and operating costs.
Also at Timmins West, a surface Diamond drilling program will be carried out to more fully delineate and identify the original Vein Zones to support efforts toward advancing an underground exploration ramp to the veins in 2008.
At Bell Creek, re-commissioning of the mill is under way and the Company expects the mill to be operational by the fourth quarter of 2008. Lake Shore is evaluating a number of opportunities to provide material to the mill and generate cash flow early in 2009, including mining shallow high-grade gold at one or more of its existing properties, through new joint ventures and/or through third party custom feeds. In support of the first of these opportunities, the Company has initiated engineering and planning studies to access high-grade gold mineralization via ramps at the Timmins West property vein zones and the Vogel and Schumacher properties.
Also at Bell Creek, Lake Shore will explore the Bell Creek mine and Vogel/Schumacher properties via surface Diamond drilling and will also review the potential for an underground exploration program, including a surface ramp to the Vogel mineralization, and rehabilitation of the Bell Creek shaft and hoisting facilities. Surface exploration drilling of the Bell Creek properties will focus on deep targets defined during the compilation process.
At Thunder Creek, surface Diamond drilling and other exploration programs will be carried out throughout the year to drill test the new discovery below the Rusk zone and other targets on the property.
At Tipahaakaaning, a winter Diamond drill program was initiated in early 2008 to test targets believed to be the source of the previously reported strong gold grain dispersal train and builds on the geological data derived from the previous drill program. Two drills have been contracted to complete 30 to 40 holes totaling 6,000 to 8,000 metres, which is expected to be complete in the second quarter of 2008.
At Casa Berardi, Diamond drill and reverse circulation drill programs will be carried out in 2008.
About Lake Shore
Lake Shore is a mineral exploration and development company focused on the acquisition, exploration and development of mineral properties with prospects for hosting economic gold deposits in the Canadian Shield in Ontario and Quebec. The Company holds a number of 100% owned and joint ventured gold properties in Ontario and Quebec, including the Bell Creek Mine and Mill Complex and has commenced sinking a shaft on its 100%-owned Timmins West gold deposit near Timmins, Ontario. Lake Shore is a reporting issuer in British Columbia, Alberta, Manitoba, Ontario and Quebec, and trades on the Toronto Stock Exchange under the symbol LSG.
Forward-looking Statements
Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the Company's periodic filings with Canadian securities regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not assume the obligation to update any forward-looking statements.
|
|
|
CONTACT INFORMATION:
Lake Shore Gold Corp.
Meghan Brown
Manager, Investor Relations
(604) 685-4644 or (778) 899-1605
Email: mbrown@lsgold.com
or
Lake Shore Gold Corp.
Anthony Makuch
President and CEO
(416) 703-6298
Email: info@lsgold.com
Website: www.lsgold.com
|
|
INDUSTRY: Manufacturing and Production - Mining and Metals
|
|
|
|
 |
|