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Lake Shore Gold Announces Initial Resource at Bell Creek Mine, LargeDeposit Indentified (ccnm)
TORONTO, ONTARIO--(Marketwire - Dec.1, 2010) - Lake Shore Gold Corp. (TSX:LSG) ("Lake Shore Gold" or the"Company") today announced the completion of an initial resource estimate forthe Company's wholly owned Bell Creek Mine property located in Timmins, Ontario.The reported resource contains 8,427,000 tonnes with an average grade of 4.40grams per tonne Au ("gpt") for a total of 1,192,900 contained ounces in theinferred category and 1,790,000 tonnes at 4.36 gpt for 251,200 contained ouncesin the measured and indicated categories. The base case resource was estimatedassuming a long term gold price of US$1,125 per ounce of gold and a cut offgrade of 2.20 gpt. Approximately 80% of the base case measured and indicatedresources, and 50% of inferred resources, are contained in the North A Zone (seeTable 1), which has an estimated average horizontal width of 6.9 metres.
| Category |
Tonnes |
Capped Grade(g/t Au)* |
Oz Au |
| Measured |
410,000 |
4.51 |
59,300 |
| Indicated |
1,380,000 |
4.32 |
191,800 |
| M & I |
1,790,000 |
4.36 |
251,200 |
| Inferred |
8,427,000 |
4.40 |
1,192,900 |
*Resource estimation completed using InverseDistance to the power 2 (ID2) interpolation method with all gold assays cappedto 34 gpt. The resource estimate includes approximately 1.1 million tonnes ofinternal dilution.
Tony Makuch, President and CEO of Lake ShoreGold, commented: "The initial resource estimate at the Bell Creek Minehighlights the robust nature of this project with attractive grades and goodwidths that improve at depth. We are also encouraged by the sensitivity analysisdone, which highlights the increase in resource grades at lower gold prices andhigher cut-off grades. This initial resource estimate represents a strongstarting point as we continue to advance the Bell Creek deposit forward towardsproduction, with our expectation being that significant potential exists to addounces as more drill holes are included and more work is completed. Engineeringstudies are progressing for access design and mining of deeper thick zones aspart of a pre-feasibility study for the Bell Creek Complex. We fully expect thatas mine planning progresses, internal dilution can be reduced which we believewill allow us to improve the resource grades by at least 0.35 gpt."
The total resources reported are containedin six separate zones, namely the North A Zone, North A2 Zone, North A3 Zone,North A Extension Zone, North B Zone and the North B2 Zone with the bulk of theresources being contained with the North A, North A2 and North B Zones.Approximately 80 percent of the total measured and indicated ounces (204,000ounces) and 50 percent of the Inferred ounces (653,000 ounces) are containedwithin the North A Zone which has an estimated average horizontal width of 6.9metres. The North A Zone was previously the main source of feedstock for theBell Creek Mine. A detailed report of the estimated tonnages and grades for eachof these six zones is presented in Table 1.
Included within the mineral resourceestimate is a sensitivity analyses from the base case resource estimate usingvarious cut off grades between 2.50 and 5.00 gpt. Results from the sensitivityanalyses are summarized below with additional detail provided in Table 2 and onthe attached tonnage-grade curve (Figure 1). The analyses indicate the robustnature of the overall resource and potential to host substantially higher gradesat reduced gold prices and increased cut off grades.
| Cut-Off Grade (gpt) |
Gold Price (US$/oz) |
Tonnes |
Grade (gpt)* |
Contained Ounces |
| 2.2 (Base Case) |
1,125 |
10,217,000 |
4.40 |
1,443,900 |
| 2.5 |
1,019 |
9,447,000 |
4.58 |
1,392,500 |
| 3.0 |
849 |
8,385,000 |
4.84 |
1,305,800 |
| 4.0 |
637 |
6,412,000 |
5.40 |
1,113,400 |
| 5.0 |
510 |
4,457,000 |
6.05 |
892,200 |
*The sensitivity analysis is inclusive ofinternal dilution.
The base case resource estimate andsensitivity calculations were calculated using an assumed minimum mining widthof two metres, US$/C$ exchange rate of 0.95, average mining costs of $76.20 pertonne and average processing recoveries of 93%.
The reported resource extends from surfaceto a vertical depth of approximately 1,200 metres, with the deposit remainingopen to depth. Of importance, the average width and ounces per vertical metreare shown to be increasing with depth and averaging greater than 2,000 ouncesper vertical metre below the 925 metre level from surface to at least 1,215metres, with only limited testing below this level. No resources are reportedfor the Vogel or Marlhill Mine properties at this time, with resource estimatesfrom these properties to follow.
Qualified Person
Lake Shore Gold intends to file TechnicalReport that is in compliance with the requirements of National Instrument 43-101("NI43-101") within 45 days of the issue of this news release. The report isbeing prepared by Scott Wilson Roscoe Postle Associates under the directsupervision of Mr. Reno Pressacco, P. Geo. Mr. Pressacco is independent of LakeShore Gold and a Qualified Person according to the definitions of NI 43-101.
About Lake Shore Gold
Lake Shore Gold is a rapidly growing miningcompany with a vision is to become a mid-tier gold producer through thesuccessful exploration, development and operation of its properties in theAbitibi Greenstone belt in Northern Ontario and Quebec, starting with its strongbase in Timmins, Ontario. In Timmins, the Company is currently carrying outpre-production development at the Timmins Mine, where it is using both a shaftand ramp to mine the Timmins deposit, and has intersected mineralizationunderground at the adjacent Thunder Creek deposit, which is being developedusing the same infrastructure and as part of the Timmins Mine project. Progressis also being made with an underground advanced exploration program at its BellCreek Mine, located on the east side of the City of Timmins, which is movingforward to become the Company's second mining operation in the Timmins GoldCamp. The Company's wholly owned mill (located on the Bell Creek property) hasbeen refurbished and is currently operating at 2,000 tonnes per day. The Companycontinues to invest aggressively in exploration primarily in the Timmins GoldCamp and in its other properties in Northern Ontario and Quebec, and owns alarge land position in Mexico. The Company's common shares trade on the TSXunder the symbol LSG.
Forward-looking Statements
Certain statements in this press releaserelating to the Company's exploration activities, potential for increasingresources, project expenditures and business plans are "forward-lookingstatements" within the meaning of securities legislation. The Company does notintend, and does not assume any obligation, to update these forward-lookingstatements. These forward-looking statements represent management's bestjudgment based on current facts and assumptions that management considersreasonable, including that operating and capital plans will not be disrupted byissues such as mechanical failure, unavailability of parts, labour disturbances,interruption in transportation or utilities, or adverse weather conditions, thatthere are no material unanticipated variations in budgeted costs, thatcontractors will complete projects according to schedule, and that actualmineralization on properties will not be less than identified mineral reserves.The Company makes no representation that reasonable business people inpossession of the same information would reach the same conclusions.Forward-looking statements involve known and unknown risks, uncertainties andother factors which may cause the actual results, performance or achievements ofthe Company to be materially different from any future results, performance orachievements expressed or implied by the forward-looking statements. Inparticular, fluctuations in the price of gold or in currency markets couldprevent the Company from achieving its targets. Readers should not place unduereliance on forward-looking statements. More information about risks anduncertainties affecting the Company and its business is available in Lake ShoreGold's most recent Annual Information Form and other regulatory filings whichare posted on sedar at www.sedar.com.
TABLE 1 ESTIMATED BASE CASE MINERAL RESOURCE BYDOMAIN (NOVEMBER 2010)
Lake Shore Gold Corp. – Bell Creek MineDeposit
| Category |
Tonnes |
Capped Grade (g/t Au) |
Oz Au |
| North A Domain |
| Measured |
375,000 |
4.49 |
54,200 |
| Indicated |
960,000 |
4.86 |
149,800 |
| Inferred |
4,462,000 |
4.55 |
653,000 |
| North A2 Domain |
| Measured |
- |
0.00 |
- |
| Indicated |
44,000 |
2.95 |
4,200 |
| Inferred |
1,728,000 |
5.14 |
285,400 |
| North B Domain |
| Measured |
- |
0.00 |
- |
| Indicated |
229,000 |
3.05 |
22,500 |
| Inferred |
1,580,000 |
3.48 |
177,000 |
| North A3 Domain |
| Measured |
- |
0.00 |
- |
| Indicated |
147,000 |
3.24 |
15,300 |
| Inferred |
148,000 |
2.84 |
13,500 |
| North B2 Domain |
| Measured |
- |
0.00 |
- |
| Indicated |
- |
0.00 |
- |
| Inferred |
509,000 |
3.92 |
64,100 |
| North A Extension Domain |
| Measured |
34,000 |
4.65 |
5,100 |
| Indicated |
- |
0.00 |
- |
| Inferred |
- |
0.00 |
- |
| GRAND TOTAL |
| Measured |
410,000 |
4.51 |
59,300 |
| Indicated |
1,380,000 |
4.32 |
191,800 |
| M & I |
1,790,000 |
4.36 |
251,200 |
| Inferred |
8,427,000 |
4.40 |
1,192,900 |
Notes:
- CIM definitions were followed for classification of Mineral Resources.
- Mineral Resources are estimated at a cut-off grade of 2.2 g/t Au.
- Mineral Resources are estimated using an average long-term gold price of US$1,125 per ounce, and a US$/C$ exchange rate of 0.95.
- A minimum mining width of 2 metres was used.
- Capped gold grades are used in estimating the Mineral Resource average grade.
- Sums may not add due to rounding.
- There are no Mineral Reserves estimated for the Bell Creek property.
- Metallurgical recoveries are assumed to average 93%
- Mining costs are assumed to average $76.20/tonne
TABLE 2 CUT-OFF GRADE SENSITIVITY ANALYSIS(INCLUSIVE OF INTERNAL DILUTION)
Lake Shore Gold Corp. – Bell Creek MineDeposit
| Domain |
Gold Price (US$/oz) |
Tonnes |
Au Cap |
Contained Oz |
Tonnes |
Au No Cap |
Contained Oz |
| Cut-Off Grade: |
|
2.2 g/t Au |
2.2 g/t Au |
|
1,125 |
10,217,000 |
4.40 |
1,443,900 |
10,217,000 |
4.49 |
1,474,200 |
| Cut-Off Grade: |
|
2.5 g/t Au |
2.5 g/t Au |
|
1,019 |
9,447,000 |
4.58 |
1,392,500 |
9,447,000 |
4.68 |
1,422,400 |
| Cut-Off Grade: |
|
3.0 g/t Au |
3.0 g/t Au |
|
849 |
8,385,000 |
4.84 |
1,305,800 |
8,385,000 |
4.95 |
1,335,700 |
| Cut-Off Grade: |
|
3.5 g/t Au |
3.5 g/t Au |
|
728 |
7,299,000 |
5.11 |
1,198,800 |
7,299,000 |
5.23 |
1,227,000 |
| Cut-Off Grade: |
|
4.0 g/t Au |
4.0 g/t Au |
|
637 |
6,412,000 |
5.40 |
1,113,400 |
6,412,000 |
5.53 |
1,140,200 |
| Cut-Off Grade: |
|
4.5 g/t Au |
4.5 g/t Au |
|
566 |
5,052,000 |
5.82 |
945,300 |
5,052,000 |
5.98 |
970,800 |
| Cut-Off Grade: |
|
5.0 g/t Au |
5.0 g/t Au |
|
510 |
4,457,000 |
6.05 |
867,600 |
4,457,000 |
6.23 |
892,200 |
|
|
|
|
|
|
|
|
Notes:
- Capped grades are capped using 34 g/t Au capping grade
- Sums may not add due to rounding
- Tonnages and grades are reported on an unclassified basis for information purposes only
To view Figure 1 – Tonnage-Grade Graph: https://media3.marketwire.com/docs/lsg_12_01_2010_fig_1.pdf
To view Figure 2 – Ounces Per 25 MetreVertical Inverval: https://media3.marketwire.com/docs/MetreVertical.pdf