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TORONTO, ONTARIO--(Marketwire - March 9, 2011) - Lake Shore Gold Corp.
(TSX:LSG) ("Lake Shore Gold" or
"the Company") today reported financial and operating results
for the fourth quarter and full year 2010. Among highlights of the
results:
-- Progress in 2010 leads to commercial production effective January 1, 2011, positions Company to nearly triple production in 2011 to 125,000 ounces -- Target production rates at Timmins Mine achieved in fourth quarter 2010 -- Mill expansion completed in November, recoveries exceed 95% target level; -- 29,900 ounces of gold produced during fourth quarter 2010 (43,500 ounces for full year); -- Company drifts into mineralization at Thunder Creek on the 300 and 730 metre levels, development progressing; -- Total resources doubled in December through release of initial National Instrument ("NI") 43-101 resource at Bell Creek Mine (8,427,000 tonnes at 4.40 grams per tonne ("gpt") for 1,192,900 ounces of inferred and 1,790,000 tonnes at 4.36 gpt for 251,200 ounces of measured and indicated); -- Excellent exploration results achieved in support of continued strong growth in production and resources, drilling success leads to increase in planned exploration spending to $31 million in 2011 from $26.6 million in 2010 -- Timmins Mine - Infill drilling supports excellent grade reconciliation in Ultramafic Zone, Main Zone extended 400 metres to depth -- Thunder Creek - Underground drilling confirms presence of large mineralized envelope containing multiple high-grade sections -- Gold River Trend - Drilling confirms open-pit potential and the extension of mineralization to depth -- 144 - Initial drilling late in 2010 leads to new discovery early in 2011 -- Bell Creek - New gold system extended to at least 1,400 metre depth, high-grade core identified -- Wetmore - First six holes into Wetmore all intersect structure and grade; -- Development expenditures total $103 million compared to target of $115 million, expenditures lead to successful development of Timmins Mine, access to mineralization at Thunder Creek, development into North A Zone at Bell Creek and completion of Bell Creek Mill expansion; -- Company exits 2010 well capitalized to fund future growth including $108 million of cash resources and no debt.
First Quarter 2011 Update
The strong momentum established late in 2010 has carried over into 2011
with a number of key accomplishments being recorded. Highlights of
progress to date in 2011, and the Company's expectations going forward,
are provided in the discussion that follows.
-- Production of 18,500 ounces during the first two months of 2011, in line with Company expectations for period. -- Mill throughput of 96,000 tonnes in first two months at an average grade of 5.50 grams per tonne and recoveries of approximately 96%. Mill throughput expected to average approximately 2,000 tonnes per day for the full year. -- Drilling at Thunder Creek confirms and expands wide, high-grade mineralization in Rusk and Porphyry zones with recent results including 75.14 gpt over 18.60m, including 284.19 gpt over 4.60m, and 3.30 gpt over 76.70m within broader intercept of 11.53 gpt over 147.30m. -- New gold zone discovered at 144 property with strong similarities to Thunder Creek and grades and widths above 200 metre level that compare favourably to Thunder Creek at similar elevations. -- Wide, high-grade intercepts recorded near surface at Gold River Trend, highlight potential for open-pit and/or shallow underground mining, with drilling also extending mineralization to at least 750 metre depth. -- Resource updates at Timmins Mine, Gold River Trend and Bell Creek expected by early 2012. Planned updates, combined with initial resource at Thunder Creek targeted for second half of 2011, provide potential to double resources over next 12 months. -- Project spending of $75.0 million expected in 2011, excluding exploration expenditures, capitalized operating costs and gold sales from development assets, as well as costs related to a potential mill expansion. Exploration spending expected to total $31 million. Company expects to remain well funded through 2011. -- Company currently studying options for staged expansion of Bell Creek Mill initially to 3,500 tonnes per day and then 5,500 tonnes per day. Decision on expanding Bell Creek Mill expected before the end of the second quarter 2011. Plans also being developed for new mill on site of Timmins West Complex. -- On February 28, 2011, Company announced completion of US$50 million, three-year corporate revolving credit facility. The cost of the facility, including structuring fees, is expected to average between 5.0% to 6.0% on drawn amounts based on current interest rates with there being no hedging requirement.
Tony Makuch,
President and CEO of Lake Shore Gold, commented: "Looking at our
performance in 2010, it is fair to say Lake Shore Gold finished strong.
We achieved the target rate of 1,500 tpd at
Timmins Mine in late October, completed our mill expansion in November,
doubled our total resources with an initial resource at Bell Creek in
December and produced close to 30,000 ounces of gold during the fourth
quarter. We also accessed the mineralization underground at Thunder
Creek during the year, reaching the Porphyry Zone on the 730 Level in
November, and continued to have very encouraging drill results at
Thunder Creek as well as at Timmins Mine, Gold River Trend, Bell Creek
and Wetmore.
"In 2011, we have continued to build momentum. Production is on
track to nearly triple to 125,000 ounces and we will work towards
doubling our resource base again over the next 12 months. On the
exploration front, we continue to achieve significant success. Thunder
Creek keeps getting better with recent results from underground drilling
demonstrating the potential for the Rusk and Porphyry zones to
represent a very large gold deposit with significant potential for
extensions at depth and along strike. We are also very encouraged by
the new gold zone we recently discovered at the 144 property,
immediately to the west of Thunder Creek, as well as recent results
showing shallow high-grade mineralization and depth extensions at the
Gold River Trend. The success we are having at the Timmins West Complex
supports our belief that we have put together a land position
representing the western extension of the Timmins Gold Camp which
provides us with significant potential to establish and grow a highly
profitable, long-life gold producer."
Detailed information about Lake Shore Gold's fourth quarter and full
year 2010 results and financial condition and liquidity is provided 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, March 10, 2011 at 11:00 am EST to discuss the Company's performance
and operating, development and exploration activities during the fourth
quarter and full year 2010 as well as the Company's activities and
plans in 2011. 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: 416-340-2218 or 866-226-1793 Replay number: 905-694-9451 or 800-408-3053 Replay ID: 3772882 Available until: 11:59 pm, March 24, 2011
About Lake Shore Gold
Lake Shore Gold is a rapidly growing mining company that is
transitioning into a mid-tier gold producer by successfully exploring
and developing a number of projects in Timmins, Ontario. The Company's
first mine, Timmins Mine, achieved commercial production effective
January 1, 2011, with the Thunder Creek and Bell Creek projects being
developed over the next two to three years. Properties such as 144,
Gold River Trend, Marlhill Mine and Vogel
provide the Company with significant potential for additional discoveries
in the Timmins Camp in support of future growth. The Company's
production in Timmins is delivered to its wholly owned milling
facility, located on the east side of Timmins, which has a current
operating capacity of 2,000 tonnes per day.
Lake Shore Gold also owns extensive land positions throughout other
parts of the Abitibi Greenstone belt in Northern Ontario and Quebec, as
well as in Mexico, which provide attractive longer-term exploration
potential. The Company's common shares trade on the TSX under the
symbol LSG.
Forward-looking Statements
All statements, other than statements of historical fact, contained or
incorporated by reference in this Press Release including, but not
limited to, any information as to the future financial or operating performance
of Lake Shore Gold Corp., constitute "forward-looking
information" or "forward-looking statements" within the
meaning of certain securities laws, including the provisions of the
Securities Act (Ontario) and the provisions for "safe harbour" under the United States Private
Securities Litigation Reform Act of 1995, and are based on
expectations, estimates and projections as of the date of this Press
Release or, in the case of documents incorporated by reference herein,
as of the date of such documents. Forward-looking statements are
provided for the purpose of providing information about management's
expectations and plans relating to the future. All of the
forward-looking statements made in this Press Release are qualified by
these cautionary statements and those made in our other filings with
the securities regulators of Canada.
Other than as specifically required by law, the Company does not
intend, and does not assume any obligation, to explain any material
difference between subsequent actual events and such forward-looking
statements, or to update any forward-looking statement to reflect
events or circumstances after the date on which such statement is made
or to reflect the occurrence of unanticipated events, whether as a
result of new information, future events or results or otherwise. These
forward-looking statements represent management's best judgment based
on facts and assumptions that management considers reasonable,
including that: there are no significant disruptions affecting operations,
whether due to labour disruptions, supply
disruptions, power disruptions, damage to equipment or otherwise;
permitting, development, operations, expansion and acquisitions at the
Timmins Gold Complex continue on a basis consistent with the Company's
current expectations; permitting, development and operations at the
Bell Creek Complex continue on a basis consistent with the Company's
current expectations; the exchange rate between the Canadian dollar and
the U.S. dollar stays approximately consistent with current levels;
certain price assumptions for gold and silver hold true; prices for
fuel, electricity and other key supplies remains consistent with
current levels; production and cost of sales forecasts meet
expectations; the accuracy of the Company's current mineral reserve and
mineral resource estimates hold true; and labour
and materials costs increase on a basis consistent with the Company's
current expectations. The Company makes no representation that
reasonable business people in possession of the same information would
reach the same conclusions.
Forward-looking statements include, but are not limited to, possible
events, statements with respect to possible events, statements with
respect to the future price of gold and other metals, the estimation of
mineral resources and reserves, the realization of mineral reserve and
resource estimates, the timing and amount of estimated future
production, costs of production, expected capital expenditures, costs
and timing of the development of new deposits, success of exploration
and development activities, permitting time lines, currency
fluctuations, requirements for additional capital, government
regulation of exploration and mining operations, environmental risks,
unanticipated reclamation expenses, title disputes or claims,
completion of acquisitions and their potential impact on the Company
and its operations, limitations on insurance coverage and the timing
and possible outcome of pending litigation. In certain cases,
forward-looking statements can be identified by the use of words such
as "plans", "expects" or "does not
expect", "is expected", "budget",
"scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not
anticipate", or "believes", or variations of such words
and phrases or statements that certain actions, events or results
"may", "could", "would",
"might" or "will be taken", "occur" or
"be achieved".
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. As well as those factors
discussed in the section entitled "Risk Factors" in the
Company's MD&A and the Company's most recently filed AIF, known and
unknown risks which could cause actual results to differ materially
from projections in forward-looking statements include, among others:
fluctuations in the currency markets; fluctuations in the spot and
forward price of gold or certain other commodities (such as diesel fuel
and electricity); changes in interest rates; changes in national and
local government legislation, taxation, controls, regulations and
political or economic developments in Canada and Mexico or other
countries in which the Company may carry on business in the future;
business opportunities that may be presented to, or pursued by, the
Company; the Company's ability to successfully integrate acquisitions;
operating or technical difficulties in connection with mining or
development activities; employee relations; the speculative nature of
gold exploration and development, including the risks of obtaining
necessary licenses and permits; diminishing quantities or grades of
reserves; and contests over title to properties, particularly title to
undeveloped properties. In addition, there are risks and hazards
associated with the business of gold exploration, development and
mining, including environmental hazards, industrial accidents, unusual
or unexpected formations, pressures, cave-ins, flooding and gold
bullion losses (and the risk of inadequate insurance, or inability to
get insurance, to cover these risks).
Although the Company has attempted to identify important factors that
could cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other
factors that cause them not to be as anticipated, estimated or
intended. There can be no assurance that forward-looking statements
will prove to be accurate, as actual results and future events could
differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking
statements.
Except where NI 43-101 reserves have been established, there can be no
guarantee that drill results reported in this news release will lead to
the identification of deposits that can be mined economically.
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