Holmer, Lake Shore firm up resource (July 20, 2004)

Holmer Gold Mines (HGM-V) and Lake Shore Gold (LSG-V) have expanded the resource at their jointly held 3.7-sq.-km project, 18 km west of Timmins, Ont.

The most recent drilling occurred along the western section of the resource. The deepest and most westerly hole intersected a new zone in the nose of a fold. This so-called Deep zone graded 1.99 grams gold over 51.1 metres, including a 5.85-metre wide section of 12.19 grams gold.

The Main, Footwall and Ultramafic zones were all intersected in recent drilling, the highlight being 6.24 grams gold over 9.45 metres. Also, eight intercepts in five holes graded from 6.2 to 12.6 grams gold over widths of 1.5-9.45 metres. These will be incorporated into a new resource estimate.

Watts Griffis & McOuat estimated in 2002 that the indicated resource totalled 422,000 tonnes grading 13.68 grams gold, or 185,600 oz. (with gold cut to 50 grams per tonne and using a 6-gram-per-tonne cutoff). The inferred resource stood at 890,000 tonnes grading 6.4 grams gold, or 183,000 oz.

In 2003, 16,000 metres of resource expansion drilling resulted in 27 intersections that have a minimum grade of 6 grams gold per tonne over a minimum width of 1.2 metres. This is the minimum requirement for the values to be added to the indicated resource. In the western part of the deposit, the average gold grade of 15 new intersections was 10 grams gold over 9.3 metres.

Six distinct lenses have been identified to date. They strike west, dip steeply north, and plunge to the west at 60. Gold mineralization is associated with a 150-to-200-metre-wide deformation zone, traversing sedimentary, volcanic and ultramafic rock.

The ultramafic unit is overlain by mafic volcanic rock, and the footwall zone sometimes occurs at the contact between the two, or tens of metres from the contact. The sediment-volcanic contact is tightly folded; the nose of the folds plunge about 60 to the west. Gold is associated with shoots that plunge in a similar manner. Visible gold is found in quartz tourmaline veins containing up to 5% disseminated pyrite.

In 2003, in addition to the aforementioned drilling, 2,500 metres of exploration drilling tested various targets and 2,500 metres were drilled to evaluate the open-pit potential of the Main zone area. An open-pit resource estimate is being calculated.

An in-house resource update has been completed, and Watts Griffis & McOuat has been contracted to perform a National-Instrument-43-101-compliant resource audit.

Lake Shore optioned the property in May 2003 and can earn a half-interest by spending $2.5 million on exploration over three years, paying $250,000 in cash, and issuing 150,000 shares to Holmer Gold. It must also produce an independent 43-101-compliant indicated mineral resource of at least 500,000 oz. gold.