Lake Shore Gold boosts its Timmins footprint

Vancouver – A 20-year lease on the Schumacher Estate property expands Lake Shore Gold’s (LSG-T, LSGGF-O) coverage of mineralization at its Vogel project near Timmins, Ontario.

The agreement gives Lake Shore full control of the 64 ha. lease for $150,000, payable over two years, and exploration expenditures totaling $500,000 over three years. The company will also pay advance annual royalties of $25,000 in years 4-6 and $50,000 in years 7-9. There is a 2% net smelter return royalty on any production from the patented lot.

Historic exploration on the Schumacher lease led to a non-NI43-101 compliant measured and indicated resource of 156,000 tonnes grading 6 grams gold per tonne on its eastern portion, which is a continuation of the mineralization on the adjoining Vogel property.

Across on Lake Shore’s Vogel ground, a non-NI43-101 compliant measured and indicated resource of 642,000 tonnes grading 12.7 grams gold was calculated in 1999. An additional 934,000 tonnes of inferred resource at the same grade was also estimated. Mineralization on both properties occurs in the main mine stratigraphy between the current and past producing Hoyle Pond-Bell Creek-Owl Creek deposits. The deposits hosted very high-grade gold zones associated with flat veins and northeast structures, which Lake Shore is targeting at Vogel in an initial 4,000-metre drill program. The lease acquisition essentially doubles the company’s coverage of the mineralized horizon to about 1.6 km.

Lake Shore acquired Vogel earlier this year, from Glencairn Gold (GGG-T, GLE-X) subsidiary Black Hawk Mining, for a payment of $3 million and the issuance of 100,000 shares. A further $500,000 is due following confirmation of an indicated resource of at least 600,000 oz. of gold. Vogel is situated one km west of Hoyle Pond, one of the highest grade producers in the Timmins gold camp. The past producing Bell Creek deposit is located about 1.4 km to the west.

With 79.6 million shares outstanding, Lake Shore posts a $128 million market capitalization at its recent $1.60 per share trading price, a new high for the company.