Lake Shore Gold
In Commercial Production - Achieving Rapid Growth Emerging Mid-Tier Gold Company - Timmins
Lake Shore Gold Announces 29% Increase in Ore Reserves1 hour ago by Marketwire
Lake Shore Gold Corp. (TSX: LSG)(NYSE MKT: LSG) ("Lake Shore Gold" or the "Company") today announced results of the Company's annual reserve update, which includes a 29% increase in total reserves to 773,300 ounces (5,483,000 tonnes at an average grade of 4.4 grams per tonne). The 29% increase in reserves from the previous year's estimate of 598,800 ounces (4,039,000 tonnes at an average grade of 4.6 grams per tonne) beat the Company's target of replacing reserves mined in 2014.
Reserves at Timmins West Mine grew 4% to 509,700 ounces (3,691,000 tonnes at an average grade of 4.3 grams per tonne) from the previous estimate of 492,200 ounces (3,332,000 tonnes at an average grade of 4.6 grams per tonne). Reserves at Bell Creek Mine more than doubled from the previous estimate, increasing to 263,600 ounces (1,792,000 tonnes at an average grade of 4.6 grams per tonne) from 106,600 ounces (706,900 tonnes at an average grade of 4.7 grams per tonne). The strong growth in reserves at Bell Creek Mine significantly extends the mine's reserve life and also provides the Company with an opportunity to increase production going forward.
A total of 122,000 metres of drilling was completed in 2014 at Timmins West and Bell Creek largely focused on converting resources to reserves. Following the new reserve update, the Company continues to have a large resource base to support future additions to reserves, and also has numerous opportunities to grow resources through drilling for extensions at the existing operations and for new discoveries. In 2014, exploration drilling to the southwest of Timmins West Mine resulted in an important new discovery within 500 metres of Thunder Creek. The 144 Gap Zone is a large zone covering 350 metres along strike and 350 metres down dip, which remains open for expansion.
Tony Makuch, President and CEO of Lake Shore Gold, commented: "The primary objective of drilling at both Timmins West Mine and Bell Creek Mine in 2014 was upgrading resource classifications and converting resources to reserves. We surpassed our goal of replacing reserves mined in the year by doubling total reserves at Bell Creek and adding to our reserves at Timmins West Mine. In 2015, our goals are to replace reserves mined during the year as well as increase our overall resource base to drive further reserve expansion. The 144 Gap discovery is the focus of our exploration program in 2015 with our target being to establish a first resource for the end of the year. Moving forward, our key priorities remain to consistently achieve safe and efficient operations, generate significant free cash flow, replace the reserves we mine and build resources in support of long-life production and long-term value creation.
"Looking at our performance, we are having a strong first quarter of 2015, with production, average grades and unit costs on track to beat expected levels. We have also continued to generate net free cash flow, with cash and bullion having increased more than $10 million so far this year, to approximately $72 million. We have also continued to reduce debt, with three payments remaining on our senior secured credit facility."
Proven and Probable Mineral Reserves
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As at December 31, 2014 Contained Metal
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Tonnes Grade Ounces
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Timmins Deposit
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Probable Reserve 1,517,000 4.4 214,300
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Thunder Creek
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Probable Reserve 2,174,000 4.2 295,400
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Total Timmins West Mine
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Total Probable Reserve 3,691,000 4.3 509,700
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As at December 31, 2014 Tonnes Grade Ounces
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Bell Creek Mine
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Proven Reserve 172,000 4.5 24,900
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Probable Reserve 1,620,000 4.6 238,700
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Total 1,792,000 4.6 263,600
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Tonnes Grade Ounces
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Total Proven and Probable Reserves 5,483,000 4.4 773,300
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1. The mineral reserve estimates are classified in accordance with the
Canadian Institute of Mining Metallurgy and Petroleum's "CIM Standards
on Mineral Resources and Reserves, Definition and Guidelines" as per
Canadian Securities Administrator's National Instrument 43-101
requirements.
2. Mineral resources are reported inclusive of reserves.
3. Mineral reserves are based on a long-term gold price of US$1,100 per
ounce and an exchange rate of $0.90 $US/$CAD.
4. Mineral reserves are supported by a mine plan that features variable
stope thicknesses, depending on zone, and expected cost levels,
depending on the mining methods utilized.
5. Mineral reserves at the Timmins West Mine incorporate a minimum cut-off
grade of 2.6 grams per tonne. The cut-off grade includes estimated
mining, site general and administrative ("G&A") and trucking costs of
$74 per tonne, milling cost of $22 per tonne, 2.25%- 3.25% royalties for
the Timmins Deposit and Thunder Creek Deposit, respectively, average
mining recovery of 96.4%, external dilution of 10-13% and a
metallurgical recovery rate of 97.0%.
6. Mineral reserves at the Bell Creek Mine incorporate a minimum cut-off
grade of 2.7 grams per tonne. The cut-off grade includes estimated
mining and site G&A costs of $77 per tonne, milling costs of $22 per
tonne, mining recovery of 95.0%, external dilution of 13% and a
metallurgical recovery rate of 94.5%.
7. The mineral reserves were prepared under the supervision of, and
verified by, Natasha Vaz, P.Eng., Vice-President, Technical Services,
Lake Shore Gold Corp., who is a qualified person under NI 43-101 and an
employee of Lake Shore Gold.
8. Tonnes information is rounded to the nearest thousand and gold ounces to
the nearest one hundred, as a result totals may not add exactly due to
rounding.
Mineral Resources
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As at December 31, 2014 Contained Metal
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Tonnes Grade Ounces
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Timmins Deposit
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Indicated 1,843,000 5.0 298,400
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Inferred 1,354,000 5.2 225,400
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Thunder Creek
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Indicated 2,696,000 4.6 396,200
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Inferred 277,000 3.8 34,200
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Total Timmins West Mine
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Indicated 4,539,000 4.8 694,600
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Inferred 1,631,000 5.0 259,700
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As at December 31, 2014 Contained Metal
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Tonnes Grade Ounces
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Total Bell Creek Mine
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Measured 331,000 5.3 55,900
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Indicated 4,573,000 4.3 630,800
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Inferred 4,399,000 4.8 685,000
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1. The mineral resource estimates have been classified according to CIM
Definitions and Guidelines.
2. Mineral resources are reported inclusive of reserves.
3. Mineral resources incorporate a minimum cut-off grade of 1.5 grams per
tonne gold for Timmins West Mine and 2.2 grams per tonne for the Bell
Creek Mine which includes dilution to maintain zone continuity.
4. Cut-off grade is determined using a weighted average gold price of
US$1,100 per ounce and an exchange rate of $0.90 $US/$CAD.
5. Cut-off grades assume mining, G&A and trucking costs of up to $74 per
tonne and/or processing costs of $22 per tonne at Timmins West Mine,
with assumed mining and G&A costs of up to $77 per tonne and/or
processing costs of $22 per tonne at Bell Creek Mine. Assumed
metallurgical recoveries for Timmins West Mine are 97.0% and 94.5% for
Bell Creek Mine.
6. Mineral resources have been estimated using the Inverse Distance Squared
estimation method and gold grades which have been capped between 25 and
120 grams per tonne based on statistical analysis of data in each zone.
7. Assumed minimum mining width is two metres.
8. The mineral resources were prepared under the supervision of, and
verified by, Eric Kallio, P.Geo., Senior Vice-President, Exploration,
Lake Shore Gold Corp., who is a qualified person under NI 43-101 and an
employee of Lake Shore Gold.
9. Tonnes information is rounded to the nearest thousand and gold ounces to
the nearest one hundred, as a result totals may not add exactly due to
rounding.
More information regarding the general parameters used in development of the block model mineral resource estimates for the Bell Creek Mine for the 2014 year end will be provided in the Bell Creek Mine 43-101 technical report and the Company's Annual Information Form, both of which will be filed on SEDAR at www.sedar.com on or before March 31, 2015.
The general parameters used in development of the block model mineral resource estimates for the Timmins West Mine are set out in a technical report entitled, "43-101 Technical Report, Updated Mineral Reserve Estimate for Timmins West Mine, Timmins, Ontario, Canada" dated March 31, 2014, filed on SEDAR, with additional information to be provided in the Company's Annual Information Form, which will be filed on SEDAR on or before March 31, 2015.
The calculation of mineral resources and mineral reserves has taken into account environmental, permitting, legal, title, taxation, socio-economic, marketing and political factors and constraints, none of which are considered to have the potential to affect materially the development of the Timmins West Mine or Bell Creek Mine. The mineral resource and mineral reserve estimates may be materially impacted by assumptions used for commodity prices, operating and capital costs, rock mechanics (geotechnical) constraints, constant underground access to all working areas, and metal recovery.
Qualified Person
Scientific and technical information contained in this press release related to reserves has been reviewed and approved by Natasha Vaz, P.Eng., Vice-President, Technical Services, who is an employee of Lake Shore Gold Corp., and a "qualified person" as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101").
Scientific and technical information related to resources contained in this press release, or source material for this press release, was reviewed and approved by Eric Kallio, P.Geo., Senior Vice-President, Exploration. Mr. Kallio is an employee of Lake Shore Gold Corp., and is a "qualified person" as defined by NI 43-101.
Quality Control
Lake Shore Gold has implemented a quality-control program to ensure best practice in the sampling and analysis of the drill core. Assays have been completed using a standard fire assay with a 30-gram aliquot. For samples that return a value greater than 10 grams per tonne gold, the sample is fire assayed with a gravimetric finish. Select zones with visible gold are tested by pulp metallic analysis. NQ size drill core is saw cut and half the drill core is sampled in standard intervals. The remaining half of the core is stored in a secure location. The drill core is transported in security sealed bags for preparation at ALS Canada Ltd., Activation Laboratories or the Bell Creek Mine Laboratory. Preparation for ALS Canada Ltd. is conducted at either Sudbury, ON, or Val d'Or, Quebec with the majority of the analysis being carried out at the the ALS Minerals assay laboratory facility in Val d'Or, Quebec with occasional analysis at a facility in North Vancouver, B.C. These ALS Minerals facilities are all registered ISO 9001-2008 (CERT-0051527). The Val d'Or assay laboratory is SCC ISO/IEC 17025:2005 Accredited (#689) and the North Vancouver, BC assay laboratory is also SCC ISO/IEC 17025:2005 Accredited (#579). All preparation and analysis for Activation Laboratories is completed at their facilities in Timmins, ON, which is ISO 9001 certified, and follows their Ancaster, ON, lab's corporate assaying procedures. All preparation and analysis is conducted at a facility on the Bell Creek Mine in Timmins, ON, The Bell Creek Mine Laboratory does not carry an ISO certification.
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Toronto
Rank
Vice President
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1032
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Your Rating
Date Joined
12/12/2014
Lake Shore Gold
Symbol
LSG
Exchange
TSX
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416.6 million
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Metals & Minerals
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