Production Results for Second QuarterLake Shore Gold Releases Production Results for Second Quarter and First Six-Months of 2011, Reviews 2011 Outlook
TORONTO, ONTARIO, Jul 19, 2011 (MARKETWIRE via COMTEX News Network) --
Lake Shore Gold Corp. (TSX:LSG) ("Lake Shore Gold" or the "Company") today reported production results for the second quarter and first six months of 2011.
For the second quarter of 2011, gold sales totaled 18,988 ounces while gold poured was 17,421 ounces. A total of 162,974 tonnes at an average grade of 3.55 grams per tonne were processed for 17,615 ounces of recovered gold. During the first six months of 2011, gold sales totaled 52,942 ounces while 43,321 ounces of gold were poured. A total of 311,374 tonnes at an average grade of 4.16 grams per tonne were processed for 39,942 ounces of recovered gold.
Mill throughput averaged 1,790 tonnes per day during the second quarter and in the month of June averaged 1,950 tonnes per day. During the first six months of 2011 mill throughput averaged 1,720 tonnes per day.
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Three Months Six Months
Ended June 30, 2011 Ended June 30, 2011
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Gold Sales
Timmins Mine 8,778 35,371
Bell Creek 5,797 13,158
Thunder Creek 4,413 4,413
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Total Gold Sales 18,988 52,942
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Gold Poured 17,421 43,321
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Gold Recovered
Timmins Mine 9,627 20,578
Bell Creek 5,666 14,301
Thunder Creek 2,323 5,064
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Total Gold Recovered 17,615 39,942
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Grade
Timmins Mine 3.36 3.92
Bell Creek 3.60 4.72
Thunder creek 3.82 3.78
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Average Grade 3.55 4.16
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Mill Throughput 162,974 311,358
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Tonnes Per Day 1,790 1,720
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Tony Makuch, President and CEO of Lake Shore Gold, commented, "Production in the second quarter of 2011 was lower than expected mainly due to a change in mining sequence in the higher grade UM1 Zone of the Timmins Mine caused by development and backfill delays, which caused the advancement of lower grade sources earlier than anticipated. This resulted in an overall head grade in the quarter of 60% of plan. The change in mine sequence shifted planned mining in the UM1 Zone initially to near the end of the second quarter and then into the second half of the year, with mining now planned to resume in July.
Grades during the second quarter of 2011 were also adversely affected by the milling of low-grade stockpiles from Bell Creek Mine, which had been accumulated as part of the advanced exploration program at the project.
Mining costs will be released with our financial results on August 9, 2011. We expect that cash operating costs for the second quarter 2011 will be significantly higher than in the first quarter given lower grades and production levels as well as the completion of considerable development and silling work for mining in the UM1 Zone."
Second Half 2011 Production Outlook
"We recently completed a detailed production re-forecast for the full year 2011. For the second half of the year, we expect that both our mining and processing rates will improve. However, we also have lowered our estimates for head grades as a result of less mining in the higher grade UM1 Zone than planned and a broader distribution of mineralization resulting in larger stopes and lower mining grades in other zones planned in 2011.
As we continue to build our understanding of the Timmins Mine orebody, we are recognizing that some of the mineralized zones are broader than previously understood. This will affect our average grades in 2011 as we mine more tonnes at lower grades, but in the longer term it may result in more overall ounces, although further work is required to confirm this.
In the re-forecast, we have deferred 130,000 tonnes of ore we had previously planned to mine from the UM1 Zone in 2011 until early 2012. This resulted from a change to stope planning and design to allow more time for additional development, to reduce backfill cycles, improve ground control and to minimize dilution.
As a result of lower head grades planned for the remainder of the year, reflecting mine sequencing and broader mineralized zones, we are revising our target production levels for the year, and now expect to pour 85,000 to 100,000 ounces of gold in 2011, down from our previous estimate of 125,000 ounces.
In terms of mill throughput, I am pleased to report that in the month of June we operated at an average rate of 1,950 tonnes per day. As the year progresses, we expect to continue to improve the reliability of the mill circuit and expect to nominally increase throughput in excess of 2,000 tonnes per day.
Progress continues on a number of fronts, including preparation of a new National Instrument 43-101 resource for Thunder Creek, targeted for completion in the 4th quarter, and a study for further expanding the Bell Creek Mill, which has been completed with the results to be released shortly."
Lake Shore Gold will also host a conference call and webcast on Tuesday, July 19, 2011 at 9:00 am EST to discuss the Company's second quarter and six month 2011 production results and 2011 outlook. Those wishing to access the call can do so using the telephone numbers that follow. The call will also be webcast and available on the Company's website.
Participant call-in: 416-340-2217 or 866-696-5910 Call-in ID: 1810650 Replay number: 905-694-9451 or 800-408-3053 Replay ID: 1136502 Available until: 11:59pm, August 2, 2011