Lake Shore Gold sees expansion potential at Timmins mine

Drill results from Lake Shore Gold‘s (LGS-T) Timmins mine in Timmins, Ont., are showing new high grade gold intercepts in a previously untested area.

The company is doing some definition and exploratory drilling as it works toward reaching commercial production at the mine by the fourth quarter of 2010. Lake Shore aims to produce 50,000 oz. gold from the Timmins mine this year increasing to 350,000 oz. from all of its mines in the Timmins camp within three years.

The previously untested area is between the Ultramafic and Footwall zones below the 650 level and demonstrates the potential for resource expansion.

Hole 650-127 is the one the company is most excited about. It returned a 50.8-metre intercept grading 13.55 grams gold per tonne. Very little drilling has been done to the east, west or at depth of this hole.

“Today’s results are very encouraging as they include excellent grades and widths which highlight the potential to greatly expand resources and increase resource grades,” said Tony Makuch, Lake Shore president and CEO, in a statement.

The results show high grades and good widths above the 650 level suggesting potential for increased grades as the company proceeds upward toward the 525 level.

Hole 650-126 returned 15 metres grading 61.35 grams gold per tonne, including 6.7 metres grading 122.65 grams per tonne.

Hole 650-094 intersected 14.5 metres grading 20.34 grams gold per tonne and hole 650-096 cut 22.23 metres grading 18.84 grams gold per tonne.

Lake Shore has three significant deposits in Timmins and it’s been working on all of them in its effort to become a mid-tier gold producer.

The Thunder Creek deposit is just 800 metres from the Timmins mine and the company is connecting the two via an access ramp while it works on an initial resource estimate.

The Timmins mine has probable reserves of 3.4 million tonnes grading 7.52 grams gold per tonne 812,000 oz. gold and indicated resources of 3.2 million tonnes grading 8.56 grams gold per tonne for 893,000 oz. gold.

The Bell Creek complex includes a past-producing mine and a 1,500-tonne-per day mill that’s being upgraded to 3,000 tonnes per day. There are also two other deposits in the complex — the Schumacher and Vogel deposits. A resource estimate is due out for Bell Creek at the end of the year.

Current indicated resources at Bell Creek stand at 190,000 tonnes grading 8.3 grams gold per tonne for 51,000 oz. gold. Schumacher has measured and indicated resources of 156,000 tonnes grading 6 grams gold per tonne for 30,000 oz. gold and Vogel has measured and indicated resources of 642,000 tonnes grading 12.2 grams gold per tonne for 261,000 oz. gold.

Lake Shore Gold shares were up nearly 4% today, or 13 cents, to $3.48 apiece on a trading volume of .14 million sharse. The stock has a 52-week trading range between $2.48 and $4.37 and nearly 350 million shares outstanding.