Results prompt Lake Shore to spend $7M on drilling.
High-grade gold results have the Sudbury-based junior miner so encouraged, they have budgeted more than $7 million for exploration on their Timmins area projects, with plans to go underground on two properties.
Two applications are being completed for advance underground exploration for the 100 percent owned Timmins West Gold and Vogel-Schumacher properties, worth about $600,000.
CEO and president Brian Booth expects it will take approximately six months to receive approval for Timmins West Gold (TWG), which has had more environmental work completed on it, and up to 10 months for Vogel-Schumacher.
For the Timmins mining camp, it is a promising step toward developing more mines.
In the meantime, four drills are currently working on the TWG property. The company's work on the pre-feasibility study is ongoing, with plans to publish it in the fourth quarter.
"We have enough encouragement that we feel it's prudent to go to an advanced underground exploration program," Booth says.
This flagship property currently has an indicated resource (2004) of 1,369,000 tonnes at a cut grade of about 11.9 grams per tonne and an uncut grade of 16.45 g/t gold.
There has been in excess of 50,000 metres of resource expansion drilling and about $10 million spent in exploration on TWG since 2004, and approximately $5.5 million on other area projects, according to Booth.
Once the most recent drill-hole results are compiled and audited, a new and expanded resource for TWG will be made public by the end of the third quarter.
"We raised $20 million in February," Booth explains, "(allowing) plenty of cash to do all the exploration drilling. When we get to the advanced exploration program, we'll raise more funds."
Acquired in 2003 from Holmer Gold Mines Ltd., the company discovered a new deposit on the property in 2004. Booth describes the mineralization as "several lenses," plunging down below surface at about 60 to 70 degrees to the west. Mineralization has been intersected at 1,200 metres vertical depth.
The Footwall and Ultramafic zones have the greatest grade-times-width values and currently account for 80 per cent of the total tonnage in the indicated resource, according to the company's website. Drilling has successfully intersected both mineralized zones, establishing their continuity and predictability. To date, drilling has extended the mineralization by 450 m down plunge of the previously reported resource.
An aggressive drilling campaign has also occurred on the Vogel-Schumacher properties located near Goldcorp's Porcupine Joint Venture (PJV) gold mines.
The historic resource estimate is 642,999 tonnes at 12.7 g/t gold and the inferred resource is 933,800 tonnes at 12.7 g/t gold. Booth says the mineralization discovered is the same gold-bearing structure as the current-producing Hoyle Pond mine.
Eighteen shallow holes were drilled on the property in Dec. 2005, indicating the presence of flat veins with intersections bearing 28.80 g/t gold over 1.30 m, 208.85 g/t gold over 0.22 m and 166.79 g/t gold over 0.78 m, to name a few.
"The veins are pretty shallow, about 100 metres from surface, and they tend to be relatively narrow, high-grade veins like Hoyle Pond."
During that period, the company's acquisition of the neighbouring Schumacher property consolidated 1.6 km of the main mine stratigraphy between the Hoyle Pond mine to the east, and the former-producing Bell Creek mine to the west.
Booth adds that at this point, Lake Shore Gold is still planning to go ahead on its own, despite the close proximity to PJV and its 11,600 tonne/day gold processing mill.
Other area properties are the Desantis, Price, Blakelock, and Thundercreek.
The Desantis property is at an earlier stage of exploration. Located five km south of Timmins, it is comprised of 22 patented and two leased claims. Active before the Second World War, the mine was revamped by Noranda between the late 1980s and early '90s.
"We felt it was an opportunity to look for new deposits in and around an old mine," Booth says.
Four holes more than 2,000 m deep were drilled at the end of 2005, and more drilling has occurred throughout the first quarter of 2006. One drill remains on the property, where drilling will resume in the third quarter.
Southwest of Desantis is the Price property, which is in its grassroot stages. There are plans to drill several holes there as well.
The Thundercreek property, described as "very prospective," is located all around the TWG project and has the same geology. Lake Shore Gold is earning a 60 percent on that property from Band-Ore Resources Inc. A three-phase drill program has been completed during the last several years.
Seven holes were drilled to test for gold mineralization associated with an ultramafic intrusive body, similar to the Ultramafic Zone in the TWG property, states the website.
Surface exploration delineated a well-developed east-west shear zone that offsets the target ultramafic. It returned surface values of up to 73 g/t gold.
Booth says although early in its exploration, there is a good indication of gold mineralization. Two drills will be moved onto the property in the third quarter.
About 140 km to the northeast of Timmins is the Blakelock Gold property, a newer grassroots project. It consists of more than 45 claim units in Blakelock Township with new claims staked as recently as March 2006.
Its location may prove favourable as it is 58 km west of the three former producing Casa Berardi gold mines along the western extension of the Casa Berardi Fault. Aurizon Mines Ltd. is in the process of bringing one of those mines back into production.
Drilling was performed in early 2006, but no results have been announced. Lake Shore Gold plans an airborne geophysical survey to cover the ground staked around Blakelock property.
While gold prices remain high, Lake Shore Gold will continue to move forward and look for new opportunities.
"We always like to have a pipeline of projects," Booth says.
BY ADELLE LARMOUR
Northern Ontario Business
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|Title Annotation:||SPECIAL REPORT: TIMMINS|
|Publication:||Northern Ontario Business|
|Date:||Jul 1, 2006|
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