|May 5, 2009 |
|Lake Shore Gold Continues to Advance Projects on Schedule and Budget and to Achieve Exploration Success in First Quarter of 2009 |
|TORONTO, ONTARIO--(Marketwire - May 5, 2009) - Lake Shore Gold Corp. (TSX:LSG) ("Lake Shore Gold" or "the Company") today reported financial and operating results for the first quarter of 2009. Key operating highlights of the quarter included:|
- Commencing the processing of development ore from the Timmins Mine advanced exploration program at the Bell Creek Mill with the Company continuing to target a total of 30,000 ounces of gold in 2009, to be produced largely in the latter part of the year;
- Advancing the Timmins Mine ramp to a total of 715 metres as of March 31, 2009 and, as of the date of this release, reaching a total advance of 830 metres (to approximately the 115 metre vertical level);
- Sinking the Timmins shaft ahead of schedule with the shaft being sunk to the 525 Level as of the end of the first quarter and currently being sunk to a depth of 620 metres, with the 525 Level shaft station having been completed in early April and the Company now on track to reach the 650 Level by mid-May; and,
- Reporting results from six additional holes at the Company's 60% owned Thunder Creek joint venture property, including 8.86 grams per tonne gold (gpt Au) over 24.85 metres (m), including 10.88 gpt Au over 4.05 m, 19.55 gpt Au over 6.00 m and 7.95 gpt Au over 5.25 m in Hole TC09-69, and 7.41 gpt Au over 3.00 m, 5.80 gpt Au over 13.65 m and 5.29 gpt Au over 12.85 m in Hole TC09-68.
Project spending in the first quarter of 2009, including exploration expenditures of $2.1 million, totaled $17.8 million. Cash and cash equivalents at March 31, 2009 totaled $117.9 million. 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.
Subsequent to the end of the first quarter, the Company announced the commencement of the Bell Creek Complex Advanced Exploration Program following receipt of Closure Plan approval. The 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 Bell Creek to the contiguous Schumacher and Vogel properties.
On May 4, 2009, Lake Shore Gold announced the continued expansion of high-grade mineralization at Bell Creek and the extension of mineralization at depth at Vogel, including confirming the extension of mineralization at Bell Creek by at least 200 metres to the east of the mine workings, intercepting 10.40 gpt Au over 0.60 m, 4.08 gpt over 3.45 m, 7.44 gpt over 0.50 m and 5.57 gpt over 1.50 m, and intersecting 8.89 gpt Au over 0.70 m 300 metres below the historic area of mineralization at Vogel. Earlier today (May 5, 2009), the Company reported additional encouraging exploration results at Thunder Creek, including new high-grade intercepts such as 10.09 gpt Au over 4.70 m (including 17.16 gpt over 2.25 m) and 7.97 gpt over 19.45 m (including 9.88 gpt over 6.90 m and 11.44 gpt over 6.00 m).
Anthony (Tony) Makuch, President and CEO of Lake Shore Gold, commented: "We are very pleased with the progress that was made during the first quarter of 2009 and that we continue to achieve as the year progresses. Near the end of March, we commenced operations at our Bell Creek Mill, and will ramp up throughput as the year progresses. Both the Timmins ramp and shaft have progressed ahead of schedule and we expect to complete the shaft to the 710 metre level and to complete a bulk sample of the ore off the 650 Level by the end of 2009. We are also moving forward with the Bell Creek Complex advanced exploration program and are very encouraged by the latest drill results from Bell Creek, Vogel and Thunder Creek, which clearly support our view that these properties are among the most highly prospective and exciting exploration targets in the industry."
First Quarter 2009 Operations Review
Resource Property and Deferred Exploration Expenditures Three months ended
($'000) March 31, 2009(i)
Timmins Mine $11,584
Bell Creek Mill 2,714
Bell Creek mine and exploration properties 849
Thunder Creek Joint Venture (Company's share) 412
Blakelock - Little Abitibi properties 62
Casa Berardi 325
Ti-pa-haa-kaa-ning (Company's share) 46
Other projects 14
Total expenditures $16,006
(i)Resource property expenditures represent the change in the carrying value
of the resource properties and deferred exploration for the three months
ended March 31, 2009.
In addition to the above expenditures, the Company spent $1.8 million on
equipment for the Timmins Mine, recorded as property, plant and equipment.
Expenditures in the first quarter include $1.3 million of non-cash charges.
Timmins Mine Project
During the first quarter of 2009, the Company incurred $13.0 million of expenditures on the Timmins Mine project (including advanced exploration, ramp development and exploration drilling expenditures), of which $1.4 million was for property, plant and equipment.
The shaft sinking program at the Timmins Mine commenced at the end of July 2008 and continued through the first quarter of 2009. At March 31, 2009, the shaft had been sunk to the 525 Level and, since that time, has advanced to the 620 metre level with the 525 Level shaft station having been completed in early April 2009. The Company expects to reach the 650 Level by mid-May at which time it will complete the 650 shaft station and then begin driving from the 650 Level to the ore for the purpose of commencing bulk sampling, with the ore expected to be reached during the third quarter of 2009. By the end of the year, the Company expects to sink the Timmins shaft to the 710 metre level, complete a bulk sample and conduct underground diamond drilling.
As of the end of the first quarter, the Timmins ramp had advanced approximately 715 metres and has currently been driven approximately 830 metres (to a vertical depth of 115 metres). Processing of development ore mined from the Timmins ramp commenced near the end of the first quarter of 2009.
Bell Creek Mill
As at December 31, 2008, the Bell Creek Mill had been refurbished to a capacity of 800 tonnes per day. Processing of development ore from the Timmins Mine advanced exploration program at the Bell Creek Mill commenced near the end of the first quarter. The Mill is initially running in campaigns processing stockpiles of development ore, and will begin running on a more continuous basis as the year progresses and deliveries from the Timmins Mine increase with the Company continuing to target 30,000 ounces of gold to be produced largely in the latter part of the year.
Expenditures for Mill improvements and repairs in the first quarter of 2009 totaled $2.7 million, largely related to such areas as the carbon columns, the HP300 cone crusher and C100 jaw crusher, the cleaning of CIP tanks, work on the cyanide tanks and structural work on the generator building and gatehouse.
Bell Creek Mine, Vogel and Schumacher
The Company incurred expenditures of approximately $0.7 million on exploration at the Bell Creek Complex during the first quarter of 2009.
Exploration expenditures for the first quarter of 2009 totaled $2.1 million and included $0.6 million at the Timmins Mine project, $0.4 million at Thunder Creek, $0.7 million at Bell Creek, Vogel and Schumacher, $0.3 million at Casa Berardi and the remaining at other projects.
On March 31, 2009, the Company announced the release of new, high-grade intercepts from six additional holes (4,093 metres) as part of its ongoing 22,000 metre diamond drill program on the Company's 60% owned Thunder Creek property, which is located immediately adjacent to the Timmins Mine project. The results include an intercept of 8.86 grams per tonne gold over 24.85 metres, including 10.88 grams per tonne gold over 4.05 metres, 19.55 grams per tonne gold over 6.00 metres and 7.95 grams per tonne gold over 5.25 metres in Hole TC09-69, and 7.41 grams per tonne gold over 3.00 metres, 5.80 grams per tonne gold over 13.65 metres and 5.29 grams per tonne gold over 12.85 metres in Hole TC09-68. These intercepts extend the Rusk and Porphyry zones at Thunder Creek by 200 metres at depth and 100 metres along strike, for a total depth of approximately 775 metres. They also indicate the presence of a second significant mineralized horizon within the Porphyry zone. The zones remain open at depth and along strike.
On May 4, 2009, the Company announced encouraging results from 20 holes (12,297 metres) from the Company's 100% owned Bell Creek and Vogel properties. Included in the results were holes confirming at least a 200 metre easterly extension of mineralization from the Bell Creek mine workings including intercepts of 10.40 gpt over 0.60 m and 4.08 gpt over 3.45 m in wedge hole BC08-23a, 7.44 gpt over over 0.50 m within a broader intercept of 4.46 gpt over 2.00 m in Hole BC08-23 and 5.57 gpt over 1.5 m in BC09-03. These holes were drilled above discovery Hole BC08-09 (7.76 gpt over 1.50 m, 7.60 gpt over 6.3 m and 6.06 gpt over 4.65 m), which was reported on December 10, 2008, and indicate a minimum 300 metre vertical height for the mineralized zone in this area.
Earlier today (May 5, 2009), results were announced for the Thunder Creek property, including wedge Hole TC09-68a with an intercept of 10.09 gpt over 4.70 m, including 17.16 gpt over 2.25 m, and wedge Hole TC09-69a, which intersected 7.97 gpt over 19.45 m in the Rusk Horizon, including 9.88 gpt over 6.90 m and 11.44 gpt over 6.00 m. Both wedge holes, plus step out Hole TC09-70, also intersected multiple Porphyry horizons similar to those previously announced in holes TC09-68 and TC09-69, confirming a minimum 175 metre strike length for these Porphyry zones and the Rusk zone along a north-northeasterly trend.
The year 2009 is expected to be an important year for Lake Shore Gold as the Company progresses towards commercial gold production. Initial processing of development ore 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 ore deliveries from the Timmins Mine to the Bell Creek Mill, to come from bulk sampling and advanced exploration work at both the Timmins ramp and shaft.
The Company expects to sink the Timmins shaft to the 710 metre level, complete initial bulk sampling and conduct underground diamond drilling before the end of the year. The Mill's processing capacity, currently 800 tonnes per day, is expected to expand to 1,500 tonnes per day when the secondary ball mill is commissioned by the end of 2009 or early 2010 as additional feed becomes available.
The Company plans to commence the Bell Creek Complex Advanced Exploration Program during the second quarter of 2009, including 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 Bell Creek to the contiguous Schumacher and Vogel properties. Work is expected to advance on a schedule to allow bulk sampling at Bell Creek to begin during the second quarter of next year, with bulk sampling at Vogel anticipated during the fourth quarter of 2010.
Project spending in 2009 is forecast at $89.0 million, including approximately $14.0 million for exploration. Based on its March 31, 2009 cash position of $117.9 million and the proceeds from planned gold sales in 2009, 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 first quarter 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 Wednesday, May 6, 2009 at 11:00 am EST to discuss the Company's first 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: 3648717
Available until: 11:59pm, May 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 just east of Timmins, has been refurbished to a capacity of 800 tonnes per day. The Company is also commencing an 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 also pursuing a number of prospective exploration properties in the Timmins area and in other parts of Northern Ontario and Quebec. Lake Shore Gold's common shares trade on the Toronto Stock Exchange under the symbol LSG.
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.
Lake Shore Gold Corp.
President & CEO
Lake Shore Gold Corp.
Vice-President, Investor Relations
|INDUSTRY: Manufacturing and Production - Mining and Metals |