Shares of Lake Shore Gold (LSG-T, LSG-X) rose 8¢ or 8% to $1.04 with more than three million shares changing hands after the company released high-grade drill results from 26 holes at its Fenn-Gib project, 60 km east of Timmins.
The assay results came from holes drilled in the western portion of the current open-pit resource that confirmed there is potential to expand the resource to both the north and west; holes below the current resource that confirmed the down plunge extension of the main zone by at least 200 metres; and holes in the eastern portion of the resource that extended mineralization in the main zone by 200 metres to the east.
Highlights from drilling in the western portion of the resource included 1.26 grams gold over 324 metres in hole FG-12-05; 1.93 grams gold per tonne over 241.20 metres in FG-12-15; 0.73 gram gold over 284.0 metres in hole FG-12-14 and 0.89 gram gold over 260.5 metres in hole FG-12-07.
Intercepts below the current resource included 1.02 grams gold over 190.50 metres in hole FG-12-19, 0.70 gram gold over 183.50 metres in FG-12-33, and 0.68 gram gold over 177.10 metres in FG-12-34.
Drilling in the eastern portion of the resource returned intercepts of 1.01 grams gold over 52.50 metres in hole FG-12-31, 1.66 grams gold over 41.0 metres in FG-12-29, 0.87 gram gold over 71.80 metres in hole FG-12-22 and 1.74 grams gold over 6.0 metres in hole FG-12-17.
Currently the Fenn-Gib project has 40.8 million tonnes grading 0.99 gram gold for 1.30 million ounces of contained gold in the indicated category and 24.5 million tonnes averaging 0.95 gram gold for 0.75 million ounces of contained gold in the inferred category.
The company acquired a 100% stake in the project along the eastern extension of the Destor Porcupine and Pipestone Fault zones in August 2011 and believes it has the potential to host both open-pit and underground resources.
President and Chief Executive Tony Makuch noted in a prepared statement that there are opportunities to establish a low strip ratio starter pit and to apply high silver values to the existing resource, which would enhance the project’s economics.
Lake Shore Gold also reported that it has found additional exploration targets within 1.5 km of the current resource. Key targets to the west include the area surrounding the historic Talisman shaft and the G-101 zone. The Talisman shaft is about 500 metres west of the current resource and the G-101 Zone is about 1.5 km to the southwest on what the company believes could be a new structure.
Targets to the east include the direct eastern extension of the Main Zone from the current resource as well as a series of felsic intrusives about 1.5 km to the southeast called the Central Syenite target.
Apart from the Finn-Gib project, Lake Shore is in commercial production at the Timmins West and Bell Creek mines in the Timmins gold camp and says it will complete the expansion of its Bell Creek mill to 3,000 tonnes per day, an increase of 50%, by late 2012.
The Toronto-based company has about 410 million shares outstanding and has traded within a 52-week range of 74¢ and $4.07 per share.
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