|
Lake Shore Gold Corp.
(TSX:LSG) -
-- Company targeting 140,000 ounces gold mined from all sources in 2011, including commercial production at Timmins Mine and material from advanced exploration programs at Thunder Creek and Bell Creek -- Mill production expected to total 125,000 ounces with additional 35,000 ounces expected in inventory stockpiles at year end -- Operating cash costs at Timmins Mine estimated at US$575 per ounce in first year of commercial production, cash costs from all sources to improve to approximately US$400 per ounce over next three years -- Capital expenditures in 2011 estimated at $75.0 million -- $31.0 million exploration program planned with continued focus on expanding resources and new discoveries in Timmins -- Resources to grow significantly with initial resource from Thunder Creek during second half of 2011, plus updated resources for Gold River Trend, Timmins Mine and Bell Creek by early 2012 -- Engineering studies initiated for staged expansion of Bell Creek Mill (to between 3,500 and 5,500 tonnes per day), with new mill also being planned for west side of Timmins.
Lake Shore Gold Corp. ("Lake Shore
Gold" or the "Company") today announced production and
expenditure guidance for 2011 including 140,000 ounces of gold mined
from all sources and mill production targeted at 125,000 ounces, with
an additional 35,000 ounces of gold expected to be in inventory
stockpiles at year end. Capital expenditures for the year are projected
at $75.0 million, excluding exploration expenditures, capitalized operating
costs and gold sales from development assets, with costs largely
related to development work at Thunder Creek and Timmins Mine.
Material for processing will come from commercial production at Timmins
Mine as well as from ongoing advanced exploration work at Thunder Creek
and Bell Creek. Priority will be given to processing material from
Timmins Mine, where cash operating costs are estimated at US$575 per
ounce during the Mine's first year of commercial production. As Timmins
Mine reaches full production and Thunder Creek and Bell Creek achieve
commercial production, cash operating costs are expected to improve to
around US$400 per ounce over the next three years.
Exploration will remain an important focus of the Company in 2011, with
an increased budget of $31.0 million. Surface drilling during the year
will be focused at Bell Creek, Thunder Creek, 144 and the Gold River
Trend, with continued significant underground drilling at Thunder
Creek, Timmins Mine and Bell Creek. During 2011, the Company expects to
announce an initial National Instrument ("NI") 43-101
resource at Thunder Creek, with updated and expanded NI 43-101
resources for Gold River Trend, Timmins Mine and Bell Creek anticipated
by early in 2012.
Tony Makuch, President and CEO of Lake Shore
Gold, commented: "We are very pleased where we find ourselves
entering 2011. We are on track to nearly triple production from the
2010 level of 43,500 ounces. Timmins Mine is in commercial production
and our Bell Creek Mill continues to perform very well with average
recoveries exceeding target levels. Our operating costs this year will
be very competitive and, as we continue to grow production from all
sources, we will drive costs down to around US$400 per ounce. We are
also moving towards a staged expansion of the Bell Creek Mill to
between 3,500 and 5,500 tonnes per day and,
based on the significant exploration success we are achieving,
also see a need for a new mill at Timmins West. We plan to remain very
aggressive explorers in 2011, and in fact will increase exploration
spending this year with our focus largely being directed at Thunder
Creek, 144, Gold River Trend, Bell Creek and Timmins Mine. Based on our
opening cash balance of $92.0 million (plus approximately 12,000 ounces
of gold bullion inventory sold for $16.0 million early in 2011), as
well as our planned expenditures and expected production this year, we
expect to remain well funded through 2011.
"Longer term, we remain on track to significantly grow production
in 2012 and 2013 with excellent potential for further growth given the
game-changing potential of projects such as Gold River Trend and 144.
Our intermediate plans include continuing to grow production and lower
operating costs at Timmins Mine, completing advanced exploration and
pre-production development at Thunder Creek and bringing this very
exciting project into commercial production and carrying out the needed
advanced exploration and feasibility work to develop the new, deeper
deposits at Bell Creek."
Not included in the Company's current business plan and projected costs
are expenditures related to increasing milling capacity. The Company is
currently studying options for a staged expansion of the Bell Creek
Mill, located on the east side of Timmins, to between 3,500 and 5,500 tonnes per day from the current level of 2,000 tonnes per day. The Company is also planning to
construct a new mill on the site of the Timmins West Complex with the
permitting process underway and the ultimate size of the mill to be
determined based upon the optimal mining of tonnes
and grade from Thunder Creek and continued exploration success in the
area. A decision on expanding the Bell Creek Mill is expected before
the end of the second quarter.
About Lake Shore Gold
Lake Shore Gold is a rapidly growing mining company with a vision to
become a mid-tier gold producer through the successful exploration,
development and operation of its properties in the Abitibi Greenstone
belt in Northern Ontario and Quebec, starting with its strong base in
Timmins, Ontario. In Timmins, the Company is in commercial production
at the Timmins Mine, has intersected underground, and is developing
along, mineralization at the adjacent Thunder Creek deposit and is
advancing an underground advanced exploration program at its Bell Creek
Mine. Mine production is delivered to the Company's wholly owned mill
(located on the Bell Creek Property east of Timmins) which has been
refurbished and currently has an operating capacity of 2,000 tonnes per day. The Company continues to invest
aggressively in exploration in the Timmins Camp and in its other
properties in Northern Ontario and Quebec, and owns a large land
position in Mexico. The Company'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
production growth, exploration activities, potential for increasing
resources, project expenditures and business plans 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.
|