Lake Shore Gold reports record intercept at Thunder Creek

Shares of Lake Shore Gold (LSG-T) surged 50¢ or 20.49% to $2.94 per share and those of its joint-venture partner West Timmins Mining (WTM-T) rose 55¢ or 53.92% to $1.57 per share after reports of a bonanza intercept at their Thunder Creek gold property in Timmins, Ontario.

Wedge hole TC09-68b intersected 12.75 grams gold per tonne over 83.40 metres, including 24.68 grams gold per tonne over 13 metres, 38.22 grams gold over 11 metres and 26.78 grams gold over 8.5 metres.

“That’s one of those holes that you sit awake at night dreaming about,” says Darin Wagner, West Timmins Mining’s president and chief executive. “It’s absolutely phenomenal. The only place in the Timmins camp in 100 years and 75 million ounces that you have been able to pull drill holes out like this, were the Dome and the Hollinger-MacIntyre systems.”

The wedge hole also intersected mineralization in the Rusk zone, with an intercept of 5.62 grams gold per tonne over 4.90 metres, including 9.50 grams gold per tonne over 2.20 metres. It also intercepted 1.01 grams gold over 6 metres in a new, second porphyry unit discovered near the bottom of the hole, the companies say.

TC09-68b was drilled about 50 metres above a previous wedge hole TC09-68a drilled in March, which included an intercept of 10.09 grams gold per tonne over 4.70 metres, including 17.16 grams gold per tonne over 2.25 metres.

Wagner credits Lake Shore Gold’s project geologist, Jacques Samson. “He recognized what he had in that lower hole – that he had a broad zone – and decided to come back up about 50 metres and see where he was in that system and low and behold we have a wonderful result,” Wagner says.

Lake Shore Gold is the project operator and owns 60% of the joint venture property while West Timmins Mining holds the remaining 40%.

The Thunder Creek property is immediately adjacent to Lake Shore Gold’s 100%-owned Timmins mine project, which has probable reserves of 826,000 oz. gold grading 7.6 grams gold per tonne. Currently Lakeshore Gold is sinking a shaft and driving a ramp to access shallow mineralization. The company is targeting production of 30,000 ounces of gold this year and is looking at commercial production in the latter half of next year.

Thunder Creek’s Hole TC09-68b is about 800 metres from the Timmins mine shaft, which will be capable of hoisting about 5,000 tonnes per day from a depth of 750 metres. (The shaft has currently been built to a depth of 650 metres.)

“We built a very large infrastructure [at the Timmins mine] both because we think the project will grow – it’s open at depth and a number of areas on the property – but also because we’re very excited about the potential of Thunder Creek and the potential of drifting over from Timmins to Thunder Creek,” says Mark Utting, vice president of investor relations at Lake Shore Gold.

“Some of the best intercepts are within 750 metres of our shaft so that creates the potential to draw on the existing infrastructure at our Timmins mine which could make this one very large mining complex.”

Four drills are currently operating at Thunder Creek and so far have drilled 15,000 metres of the 22,000-metre program.

Three of the most recent holes did not encounter any mineralization. (They were 100-plus-metre lateral stepouts.)

The remaining two holes cut 2.82 grams gold per tonne over 1 metre and 1.23 grams gold over 1 metre respectively.

Wagner says the wedge hole was at a vertical depth of 750 metres – less than a third of the way down in terms of mining depths in the camp. He explained that Dome was operating at a vertical depth of about 1,600 metres, while the Hollinger-MacIntyre system was mined to over 2,000 metres.

“These deposits tend to be fairly steep shoots and will run to very considerable depths,” he says, “and when you’re into one you’re usually into it for awhile.”

Wagner also noted that the combination of grade and thickness in Hole TC09-68b is unheard of in the Timmins Camp outside of the Dome and Hollinger-MacIntyre systems.

“It ranks up there with the holes you would have got with Aurelian (at the Fruta del Norte deposit) in Ecuador and it puts it in there with Meikle and Getchell in Nevada and Porgera in Papua New Guinea,” he said. “It’s a fairly rare beast to see this kind of grade over 80-plus metres.”

Utting of Lake Shore Gold also noted that Thunder Creek and its Timmins mine lie to the west of Timmins where there hasn’t been as much mining activity. “All of the historic mines were more on the east side of Timmins and are all running along the Porcupine-Destor fault,” he says.

“But when you get to the west side people didn’t really know what happened to the fault…On the west side there isn’t much outcrop and you have to drill at depth. It was finding out that you need to drill deeper that was the big breakthrough.”

Lake Shore Gold “theorized that the fault downshifted,” Utting explains. “Using their theories they discovered the Timmins deposit in 2004 and the Rusk zone at Thunder Creek in 2007.”

“Now that this whole geological structure we think has been figured out, this could be a whole new chapter to the Timmins mining camp.”