Lake Shore boosts Timmins West resource

Vancouver – Lake Shore Gold (LSG-T, LSGGF-O) delivered a significant resource increase at its Timmins West project located about 18 km west of Timmins.

Indicated resources in the Main-Vein, Footwall and Ultramafic zones grew 78% over the September 204 estimate to now stand at 3.27 million tonnes grading 12.3 grams gold per tonne for about 1.29 million contained ozs. The average indicated grade was 8.6 grams gold when cut to 3 grams minimum grade and capped at a 50 grams gold maximum grade, equating to about 905,000 contained ozs. of gold.

Inferred resources now stand at 968,000 tonnes of 5.79 grams gold (uncut) for about 207,000 contained ozs.

Additionally, a higher-grade core zone of 2.29 million tonnes averaging 15.76 grams gold (10.5 grams gold cut) was modeled using a plus-6 gram gold cutoff grade, containing about 1.16 million ozs. (uncut) or 775,000 ozs. (cut).

“These new ounces were added at a cost of just $12 per oz.” said Lake Shore president and CEO Brian Booth. “All of the zones remain open down plunge to the west. Our next step will be to complete the pre-feasibility study and obtain an advanced underground exploration permit in 2007.”

The resource boost over the 2004 estimate came primarily from drilling of the Ultramafic and Footwall zones between the 800 and 1,200-metre levels. Although the Vein zone was not targeted during 2005-2006 it will be the focus of resource expansion below the 400-metre level in 2007 along with ongoing drilling down plunge on the Main zone.

Timmins West gold mineralization occurs in high-grade quartz veins and disseminated sulphides zones associated with shear structure. The steeply dipping ore shoots occur within a 150-to-200 metre wide deformation zone.

Lake Shore Gold initially began exploration on Timmins West in 2003 and subsequently acquired Holmer Gold Mines at year-end 2004 to consolidate and gain full title to the project. It has drilled more than 50,000 metres testing mineralized zones over a vertical depth of more than 1,200 metres.

The project is subject to a 1.5% net smelter return (NSR) royalty, reduced to 0.75% once $2.5 million is paid. One claim has an additional 1.5% NSR that can be purchased for $1 million.

Shares of Lake Shore rallied on the new resource estimate to close up 21, 13.5%, at $1.77 apiece on volume of 489,000. The stock has a 52-week trading range of $1.25-to-$2.65.