Vancouver – Lake Shore Gold (LSG-T) has found a much needed boost with a round of encouraging step-out drill results from its Bell Creek gold mine in Timmins, Ontario.
Drilling to expand the resource both down plunge and along strike, Lake Shore has expanded known mineralization by roughly 400 metres deeper than the established resource.
Hole 11k hit 28.5 metres grading 5.62 grams gold per tonne from 1,646 metres downhole and 7.7 metres grading 6.71 grams gold a little shallower. Hole 11F cut 8.1 metres grading 7.71 grams gold from 1,849 metres downhole, and hole 11I returned 8.7 metres carrying 6.01 grams gold from 1790 metres.
The company reports that mineralization in the new holes is hosted largely within broad zones of hydrothermal alteration averaging greater than 20 metres in width. The zones contain local quartz veining with 5 to 15% pyrite and some visible gold, while the overall strike length of the new area is roughly 500 metres.
Meanwhile on the eastern limit of the current resource hole 07G returned 25 metres grading 3.11 grams gold from 1,237 metres downhole, hole 06D cut 2.4 metres grading 7.34 grams gold from 1,081 metres depth, and hole 03C hit 5.3 metres grading 4.62 from 742 metres downhole.
Lake Shore is also continuing infill drilling to prove up the continuity and grades of the established resource. The company is working to upgrade the large inferred resource that stands at 8.4 million tonnes grading 4.4 grams gold for 1.2 million oz. gold, while the measured and indicated resource stands at 1.8 million tonnes grading 4.36 grams gold for 251,000 oz. The system is still open to the west, east and at depth.
The drill results, which pushed Lake Shore’s share price up 22¢ or 11% to $2.17 on over 6 million shares traded, come after a rough second quarter that saw gold production from its Timmins Mine drop by 4,700 oz. to roughly 17,600 oz. gold. The decrease was mostly due to an unexpected drop of over a gram gold in the head grade, plus the use of low-grade stockpiled ore.
The issues led to a jump in cash costs from US$586 per oz. in the previous quarter to one analyst’s estimate of over US$1,000 per oz. The low production numbers follows a lengthy delay in the expansion of the Bell Creek mill.
These are great drilling results. I put SAS into the same camp as Lakeshore. This is the type of news what SAS needs.