Lake Shore triples Timmins Gold resource (September 20, 2004)

Vancouver — Since Lake Shore Gold (LSG-V) acquired an option on the Timmins Gold project in northeastern Ontario just over one year ago, the company has accelerated its exploration of the property, primarily through an aggressive drill program.

As a result of extensive drilling and data, the latest resource calculation for the project shows a 200% increase over the 2002 figures, based on an uncut basis, and is up 170% using cut grades.

The latest 2004 estimated indicated resource now stands at 1.4 million tonnes grading 11 grams gold per tonne using a 6-gram gold cutoff grade. There is also an inferred resource of 200,000 tonnes grading 8.7 grams gold using the same cutoff. An additional inferred resource of one million tonnes of 4.1 grams gold has also been identified in mineralization grading between 3-6 grams gold.

Lake Shore has conducted over 31,000 metres of drilling, primarily directed at expanding resources, but some drilling focused on near-surface definition and exploration.

Mineralization at the Timmins Gold project is typical for the area, and is located north of the Porcupine-Destor fault at the western end of the Timmins camp. Gold occurs in high-grade mineralized quartz veins and in disseminated sulphide zones in steeply dipping shoots associated with the fault. All mineralization discovered to date is within a 150-200-metre-wide altered, deformation zone and has been identified from surface to a depth of 850 metres.

The increase in resource is largely contained in the wide Footwall and Ultramafic zones between the depths of 350 to 900 metres. Both of these zones and the newly discovered Deep zone, hosted in sediments below the Ultramafic zone, remain open westward and are currently being drill-tested in a second-phase resource expansion program.

The quartz tourmaline veins and stockworks in the Main, Hanging Wall, V1, V2 and V3 zones, occur along the highly sheared and altered mafic volcanic-sedimentary contact. Gold mineralization in the Footwall zone is associated with disseminated pyrite in sheared, strongly albite-altered volcanics. In the Ultramafic zone, gold-mineralized quartz-tourmaline veins and disseminated sulphides occur in a multiphase mafic intrusive within a tight nose fold.

In May 2003, Lake Shore entered into an option to earn a 50% interest in the project from Holmer Gold Mines (hgm-v) by incurring exploration expenditures of $2.5 million, cash payments of $250,000 and the issuance of 150,000 shares over three years. Another requirement of the option was confirming an indicated mineral resource of 500,000 oz. gold on the property. The company has now fulfilled all the terms of the agreement and has vested its 50% interest. The company remains operator of the project.

Lake Shore has over 20 gold and base metal projects situated in the Abitibi Greenstone Belt area of northeastern Ontario and northwestern Quebec. The company is 38.6% owned by Aurora Platinum (ARP-V) with whom it shares common directors and officers.

As of the latest figures, Lake Shore Gold reports 34.5 million shares outstanding. The market valued the results and resource increase by adding a dime, on the news, to the share price pushing it up to 85 per share on moderate volume.