TORONTO, ONTARIO--(Marketwire - March 10, 2010) - Lake Shore GoldCorp. (TSX:LSG) ("Lake Shore Gold" or "the Company") today reportedfinancial and operating results for the fiscal year and fourth quarterended December 31, 2009. Key operating highlights of 2009 and to date2010 are provided below.
- Completed acquisition of West Timmins Mining ("West Timmins"),consolidating Thunder Creek and adding an additional 120 squarekilometers along western extension of Timmins mining camp, as well asattractive properties in Mexico. Also, acquired 28 square kilometers ofhighly prospective land around Bell Creek property.
- Sinking of the Timmins Mine shaft was completed to a depth of 710metres in March 2010. Initial development into the Ultramafic Zonemineralization from the 650 Level was completed in 2009. Work to dateincluding diamond drilling, sampling and drifting shows widths andgrades of mineralization to be consistent with resource estimatesderived from previous surface drilling. On February 18, 2010, diamonddrilling confirmed the extension of the Timmins Mine mineralization 130metres down plunge and 100 metres to the west within a newly emergingfold nose.
- Thunder Creek advanced underground exploration program commencedin October 2009. As of March 9, 2010, the drift to Thunder Creek fromTimmins Mine 200 Level was driven approximately 560 metres, and thedrift from 650 Level was driven 280 metres. The Company expects thedrifts to reach the Thunder Creek mineralization in June and September2010, respectively.
- Bell Creek Mill expanded to 1,500 tonnes per day capacity by endof third quarter 2009. A total of 7,700 ounces of gold was producedfrom 2009 advanced exploration activities at the Timmins Mine.
- Underground advanced exploration program commenced at the BellCreek Complex. As of March 9, 2010, the Bell Creek shaft and mineworkings were de-watered to a depth of 255 metres, and the Bell Creekramp from surface was advanced to a vertical depth of 180 metres.
- Encouraging exploration results from surface diamond drilling reported from both Thunder Creek and Bell Creek Complex.
-- At Thunder Creek, results included 12.75 gpt over 83.40 metresin TC09-68b. On January 26, 2010, mineralization extended a further 110metres to depth, presence of high-grade core confirmed and new westerlyplunging zone discovered. On February 18, 2010, Rusk Horizonintersected 1,700 metres below surface, 700 metres below previousdeepest intercept.
-- Surface diamond drilling at Bell Creek in 2009 discovered alarge new gold system at depth, and the potential to expand theexisting mineralization along strike. On January 18, 2010, the new goldsystem was extended to below 1,300 metres down plunge and by 70 metresto the west.
Project spending in 2009, including exploration expenditures of$18.7 million, was $95.2 million (net of $6.1 million gold sales in2009 and $2.8 million gold sales in 2010 related to 2009 advancedexploration activity, and excluding non-cash charges and changes inworking capital), compared to the budget of $89.0 million. At December31, 2009, Lake Shore Gold had cash and cash equivalents of $132.9million, excluding $4.8 million posted in letters of credit.
OUTLOOK
In 2010, Lake Shore Gold will continue to carry out advancedexploration programs at the Company's 100% owned Timmins Mine, ThunderCreek and Bell Creek Complex properties, with plans to achievecommercial production at the Timmins Mine during the fourth quarter andto access mineralization underground at the Thunder Creek and BellCreek projects in the second quarter.
The Company now expects to produce approximately 50,000 ounces atthe Timmins Mine, with an additional 15,000 ounces expected to comefrom the Thunder Creek and Bell Creek advanced exploration projects.The Company anticipates ending 2010 at a monthly production rate of10,000 ounces with further production growth throughout 2011.
The revised 2010 estimate for ounces derived from undergroundadvanced exploration reflects a change in priorities emphasizingincreased underground waste development, diamond drilling andinfrastructure plans necessary to support the preparation of 43-101compliant resource estimates at both Thunder Creek and Bell Creek. AtBell Creek, the Company confirmed the presence of a large new goldsystem at depth and will undertake an evaluation of the project todefine the resources and design a mine plan to reflect the larger scaleproject including the potential to develop a new shaft to depth. Theadditional development and infrastructure work will position theCompany to maximize and sustain annual gold production at both ThunderCreek and Bell Creek.
Gold production during 2010 will be weighted to the second half ofthe year as work at Timmins Mine is currently focused on drifting toThunder Creek and completing the shaft change over. Work at ThunderCreek continues to advance on schedule with high-grade mineralizationat the 295 Level expected to be intersected by the end of June 2010 andmineralization at the 680 Level expected to be reached by the end ofthe third quarter of 2010. Refurbishing of the Bell Creek mine workingswill be completed and the ramp driven to the 400 metre level by yearend, with exploration development along the main "North A" vein plannedin the fourth quarter. The Company has achieved considerableexploration success at Bell Creek, which is resulting in are-evaluation of the project to potentially become a larger-scaleoperation from that previously envisioned.
Exploration spending in 2010 is now expected to total $31.0 million,involving more than 250,000 metres of surface and underground drillingand an additional program for Mexican exploration. Project spending in2010, excluding exploration, is forecasted at $115.0 million (beforenet proceeds from anticipated gold sales). The capital program has beenreduced from $134 million as the Company undertakes a staged increasein milling capacity at Bell Creek to 2,000 tonnes per day and reducingcapital at Vogel to focus on maximizing production at Bell Creek.
Anthony (Tony) Makuch, President and CEO of Lake Shore Gold,commented: "We are excited about bringing the Timmins Mine intocommercial production in 2010. The revised plan to focus ourunderground exploration program on completing mineral resourceestimates for Thunder Creek and Bell Creek will result in less goldproduced in 2010 than previously anticipated. However, this establishesthe foundation for maximizing value and helps to fast track theseprojects to commercial production."
"On the exploration front, we continue to be very encouraged, havingrecently extended the Timmins Mine mineralization at depth and to thewest, and also discovered a newly emerging fold nose system. TheThunder Creek Rusk Horizon has been intersected at a 1,700 metre depthand a new westerly plunging mineralized system has been discovered atThunder Creek. We also continue to expand the new gold system at BellCreek, and have begun drilling along the Gold River Trend, whichrepresents the southern extension of the Timmins West Complex. At CasaBerardi, we will earn our 50% interest in the optioned property thisyear, and now plan to carry out preliminary exploration on the highlyprospective Mexican projects obtained through the West Timminstransaction."
Operations Review - 2009
Year ended December
Project and Exploration Spending ($'000) 31, 2009(i)
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Resource property and deferred exploration
Timmins Mine $53,888
Bell Creek Mill 11,634
Bell Creek mine and exploration properties 22,355
Thunder Creek (including advanced exploration) 4,501
Casa Berardi net 1,049
Other projects 354
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$93,781
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Property, Plant and equipment
Timmins Mine 6,017
Bell Creek Mill 1,220
Bell Creek Mine 3,086
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$10,323
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Project and Exploration Spending $104,104
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2009 gold sales ($6,095)
2010 gold sales, related to 2009 mining activities (2,813)
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Net Project and Exploration Spending $95,196
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(i) Net Project and Exploration Spending reported exclude values allocated
to resource properties on acquisition of West Timmins ($563.6 million)
and Bell Creek West properties ($21.9 million), noncash charges of
$4.1 million for resource property and deferred exploration and net
$7.1 million for property, plant and equipment and changes in working
capital.
Timmins Mine Project
During the year ended December 31, 2009, the Company spent $53.8million (net of $6.1 million in gold sales in 2009) on the Timmins Mineproject (including advanced exploration, ramp and ore development andexploration drilling expenditures as well as $6.0 million on property,plant and equipment) or $51.0 million factoring in 2010 gold salesrelated to 2009 mining activities are included.
During 2009, the Company's net spending on advanced exploration atTimmins totaled $22.6 million (including $3.5 million for property,plant and equipment). Work on the Timmins Mine 650 Level at the end of2009 included ramp development to the 630 level, drifting to ThunderCreek, definition diamond drilling, chip and muck sampling ofdevelopment faces and geologic mapping. Results from diamond drilling,sampling, mapping and development are still ongoing, but suggest thatthe overall trend for grades and widths of the mineralization in thisarea is similar to that predicted by the Resource and Reserve modelthat supports the most recent National Instrument 43-101 report.
The Timmins ramp advanced to a vertical depth of 200 metres, as ofthe end of 2009, in line with the Company's target for the year. So farin 2010, the ramp has advanced to a vertical depth of 230 metres (1,600metres of advance). Work in the ramp during 2009 focused on stopedevelopment and advanced exploration work to define and expose the veinsystems in the vein zones. Drilling in the ramp above 170 metres in2009 indicated that overall shapes for the zones are not as continuousas expected based on the original surface drilling resulting in lowertonnes and grades. Project net spending related to the ramp during 2009totalled $22.7 million (including $2.5 million for property, plant andequipment).
Bell Creek Mill
The Bell Creek Mill was made operational in December 2008 at acapacity of 800 tonnes per day and expanded to 1,500 tonnes per day inthe third quarter of 2009. Processing of low-grade material fromdevelopment and advanced exploration work in the Timmins Mine rampcommenced at the Bell Creek Mill near the end of the first quarter of2009. The Mill was initially operated in campaigns by processing ore asstockpiles were established. The Mill is now operating on a morecontinuous basis as deliveries from the Timmins Mine increase, bothfrom the ramp and shaft.
Spending at the Bell Creek Mill in the year ended December 31, 2009totaled $12.9 million (including $1.2 million on property, plant andequipment) including capitalized processing costs as well as newsurface buildings, the construction of a cyanide destruction plant andother mill improvements and repairs.
Bell Creek Mine, Vogel and Schumacher
The Company's project spending at the 100% owned Bell Creek Mine andcontiguous Vogel and Schumacher properties for 2009 were $25.4 million,of which $17.3 million is related to the Bell Creek Complex advancedexploration program (including $3.1 million for property, plant andequipment) and $8.1 million to exploration.
In May 2009, the Company commenced an advanced exploration programat the Bell Creek Complex. As of the end of February 2010, the BellCreek shaft and workings from previous mining had been de-watered to adepth of 255 meters with the remaining 37 meters to shaft bottom beingused as a sump. The ramp at Bell Creek had advanced a total of 1,200metres, to a vertical depth of 200 metres, and had accessed mineworkings at Bell Creek at the 180 metre Level.
Exploration Expenditures
Exploration spending for the year ended December 31, 2009 totaled$18.7 million (representing 128,016 metres of drilling) and included$5.7 million at the Timmins Mine project, $3.5 million at ThunderCreek, $8.1 million at the Bell Creek Complex, and $1.0 million at CasaBerardi, with the remainder at other projects.
During 2009, the Company announced results for a total of 124 drillholes, including wedge and extension holes, for a total of 58,388metres.
At Thunder Creek, the most encouraging results were released on June24, 2009 and included Hole TC09-68b, which intersected 12.75 gpt over83.40 metres. Results released on August 25, 2009 included 12.17 gptover 9.00 metres in TC09-68d with TC09-73 successfully extending themain porphyry structure, with gold mineralization, to a 1,125 metrevertical depth with potential existing for additional high-grade zonesat this depth and below.
Subsequent to year end, additional drill results were released forThunder Creek on January 26, 2010 which extended the mineralization atdepth and down plunge, confirmed the presence of a high-grade core tothe mineralization near the 650 Level and included the discovery of anew westerly trending zone. On February 18, 2010, the Company announcedthat Hole TM08-178f had intersected the Thunder Creek Rusk Horizon onthe Timmins Mine property at a depth of 1,700 metres below surface, 700metres below the previous deepest intercept.
At Bell Creek, results in 2009 included confirmation of a new goldsystem at depth and the significant potential along strike. Amongresults during the year were 5.13 gpt over 26.40 metres on November 5,3009; 12.67 gpt over 14.5 metres, including 16.73 gpt over 10.00 metreson October 1, 2009; and 12.63 gpt over 11.65 metres on July 21, 2009.On January 18, 2010, new intersections were reported which expanded thelarge new gold system at Bell Creek to a depth below 1,300 m downplunge and by 70 metres to the west.
Also important to the Company's 2009 drilling program was thecompletion of 31,053 metres of underground drilling at the TimminsMine. Results of this drilling were released on August 24, 2009 andOctober 29, 2009 and confirmed previous drilling, identified high-gradelenses outside the existing resource, and indicated that the overallsize and shape of the main Ultramafic Zone at Timmins Mine is similarto the existing resource model, with potential existing to add tonnesand ounces.
On February 18, 2010, results from surface drilling at Timmins Mineextended mineralization within a newly emerging fold nose by 130 metresdown plunge and 100 metres to the west of previous limit for drillingon the property, suggesting significant potential exists to add newresources at Timmins Mine.
In addition to ongoing drilling at Timmins Mine, Thunder Creek andthe Bell Creek Complex, the Company also recently initiated a drillprogram at the Thorne property along the Gold River Trend, representingthe Company's next significant exploration target in the Timmins Camp.
On February 16, 2010, the Company announced encouraging explorationresults on its Casa Berardi optioned property, where it is earning a50% interest from Aurizon Mines Ltd. Significant drilling results onthe East Block included 2.33 gpt over 7.30 metres, which tested theeast portion of the G Zone at a depth of 280 metres and 45 metres belowthe previously reported value of 8.58 gpt over 10.40 metres. Drillingon the West Block included 3.44 gpt over 3.91 metres at a verticaldepth of 375 metres below surface. This new intersection is the mostsignificant result from the limited drilling west of the Casa BerardiMine Claim boundary and highlights the exploration potential for newdiscoveries along the Casa Berardi Fault trend.
More information about Lake Shore Gold's full year 2009 and fourthquarter results and financial condition and liquidity is available inthe Company's consolidated financial statements and management'sdiscussion and analysis, which have been filed on sedar atwww.sedar.com and posted to the Company's website at www.lsgold.com.
Lake Shore Gold will also host a conference call and webcast onThursday, March 11, 2010 at 9:00 am EST to discuss the Company's 2009performance and operating, development and exploration activities in2010. Those wishing to access the call can do so using the telephonenumbers listed below. The call will also be webcast and available onthe Company's website.
Participant call-in: 416-340-2216 or 866-226-1792
Replay number: 416-695-5800 or 800-408-3053
Replay ID: 4013424
Available until: 11:59pm, March 25, 2010
About Lake Shore Gold
Lake Shore Gold is a rapidly growing mining company with large landpositions on the west and east sides of the Timmins Gold Camp. TheCompany is carrying out an underground advanced exploration program atits 100%-owned Timmins Mine project, where it has both a shaft and aramp, and is currently commencing advanced exploration work at theadjacent Thunder Creek property. The Bell Creek Mill, located on theeast side of Timmins, has been refurbished to a capacity of 1,500tonnes per day. The Company is also making progress with an undergroundadvanced exploration program at its Bell Creek Complex, including theBell Creek Mine, Schumacher and Vogel properties, which is movingforward to become the Company's second mining operation in the TimminsCamp. The Company continues to invest aggressively in explorationprimarily in Timmins and in select other areas of Northern Ontario andQuebec, and owns a large land position in Mexico. The Company's commonshares trade on the TSX under the symbol LSG.
Forward-looking Statements
All statements, other than statements of historical fact, containedor incorporated by reference in this Press Release including, but notlimited to, any information as to the future financial or operatingperformance of Lake Shore Gold Corp., constitute "forward-lookinginformation" or "forward-looking statements" within the meaning ofcertain securities laws, including the provisions of the Securities Act(Ontario) and the provisions for "safe harbour" under the United StatesPrivate Securities Litigation Reform Act of 1995, and are based onexpectations, estimates and projections as of the date of this PressRelease or, in the case of documents incorporated by reference herein,as of the date of such documents. Forward-looking statements areprovided for the purpose of providing information about management'sexpectations and plans relating to the future. All of theforward-looking statements made in this Press Release are qualified bythese cautionary statements and those made in our other filings withthe securities regulators of Canada.
Other than as specifically required by law, the Company does notintend, and does not assume any obligation, to explain any materialdifference between subsequent actual events and such forward-lookingstatements, or to update any forward-looking statement to reflectevents or circumstances after the date on which such statement is madeor to reflect the occurrence of unanticipated events, whether as aresult of new information, future events or results or otherwise. Theseforward-looking statements represent management's best judgment basedon facts and assumptions that management considers reasonable,including that: there are no significant disruptions affectingoperations, whether due to labour disruptions, supply disruptions,power disruptions, damage to equipment or otherwise; permitting,development, operations, expansion and acquisitions at the Timmins GoldComplex continue on a basis consistent with the Company's currentexpectations; permitting, development and operations at the Bell CreekComplex continue on a basis consistent with the Company's currentexpectations; the exchange rate between the Canadian dollar and theU.S. dollar stays approximately consistent with current levels; certainprice assumptions for gold and silver hold true; prices for fuel,electricity and other key supplies remains consistent with currentlevels; production and cost of sales forecasts meet expectations; theaccuracy of the Company's current mineral reserve and mineral resourceestimates hold true; and labour and materials costs increase on a basisconsistent with the Company's current expectations. The Company makesno representation that reasonable business people in possession of thesame information would reach the same conclusions.
Forward-looking statements include, but are not limited to, possibleevents, statements with respect to possible events, statements withrespect to the future price of gold and other metals, the estimation ofmineral resources and reserves, the realization of mineral reserve andresource estimates, the timing and amount of estimated futureproduction, costs of production, expected capital expenditures, costsand timing of the development of new deposits, success of explorationand development activities, permitting time lines, currencyfluctuations, requirements for additional capital, governmentregulation of exploration and mining operations, environmental risks,unanticipated reclamation expenses, title disputes or claims,completion of acquisitions and their potential impact on the Companyand its operations, limitations on insurance coverage and the timingand possible outcome of pending litigation. In certain cases,forward-looking statements can be identified by the use of words suchas "plans", "expects" or "does not expect", "is expected", "budget","scheduled", "estimates", "forecasts", "intends", "anticipates" or"does not anticipate", or "believes", or variations of such words andphrases or statements that certain actions, events or results "may","could", "would", "might" or "will be taken", "occur" or "be achieved".
Forward-looking statements involve known and unknown risks,uncertainties and other factors which may cause the actual results,performance or achievements of the Company to be materially differentfrom any future results, performance or achievements expressed orimplied by the forward-looking statements. As well as those factorsdiscussed in the section entitled "Risk Factors" in the Company'sMD&A and the Company's most recently filed AIF, known and unknownrisks which could cause actual results to differ materially fromprojections in forward-looking statements include, among others:fluctuations in the currency markets; fluctuations in the spot andforward price of gold or certain other commodities (such as diesel fueland electricity); changes in interest rates; changes in national andlocal government legislation, taxation, controls, regulations andpolitical or economic developments in Canada and Mexico or othercountries in which the Company may carry on business in the future;business opportunities that may be presented to, or pursued by, theCompany; the Company's ability to successfully integrate acquisitions;operating or technical difficulties in connection with mining ordevelopment activities; employee relations; the speculative nature ofgold exploration and development, including the risks of obtainingnecessary licenses and permits; diminishing quantities or grades ofreserves; and contests over title to properties, particularly title toundeveloped properties. In addition, there are risks and hazardsassociated with the business of gold exploration, development andmining, including environmental hazards, industrial accidents, unusualor unexpected formations, pressures, cave-ins, flooding and goldbullion losses (and the risk of inadequate insurance, or the inabilityto obtain insurance, to cover these risks).
Although the Company has attempted to identify important factors(which it believes are reasonable) that could cause actual actions,events or results to differ materially from those described inforward-looking statements, there may be other factors that causeactions, events or results not to be as anticipated, estimated orintended. There can be no assurance that forward-looking statementswill prove to be accurate, as actual results and future events coulddiffer materially from those anticipated in such statements.Accordingly, readers should not place undue reliance on forward-lookingstatements.
Except where National Instrument 43-101 reserves have beenestablished, there can be no guarantee that drill results reported inthis news release will lead to the identification of deposits that canbe mined economically.
FOR FURTHER INFORMATION PLEASE CONTACT:
Lake Shore Gold Corp.
Tony Makuch
President & CEO
(416) 703-6298
or
Lake Shore Gold Corp.
Mark Utting
Vice-President, Investor Relations
(416) 703-6298
(416) 703-7764 (FAX)
info@lsgold.com
www.lsgold.com