Promising assays from Lake Shore Gold‘s (LSG-T) Thorne gold property in Timmins, Ont., did little to lift the company’s shares. The junior has been trading near its 52-week low of $1.91 on Aug. 15, 2011, since releasing dismal second-quarter production numbers showing lower gold grades.
On the assay news, Lake Shore was up 2.2% to $2.29 per share. It posted 45 holes with 6 abandoned totalling 18,965 metres at Thorne, which runs along the Gold River trend 3 km south of its Thunder Creek deposit.
The results came from an ongoing $30-million, 27-rig program planned for the year. The two drills at Thorne are focused on the Gold River East area and on infilling and expanding the current zones to update the National Instrument 43-101 compliant resource. The revised estimate is due in early 2012.
The wholly owned project hosts 4 million tonnes grading 3 grams gold for 400,000 oz. gold.
“As a result of recent drilling, the mineralization has been confirmed near surface, with widths and grades which are similar or better than obtained by previous operators,” Tony Makuch, Lake Shore’s president and CEO, says in a press release.
He adds that mineralization has been extended along strike and to a depth of 850 metres, and remains open.
Of the holes released, Lake Shore drilled 24 on the North Porphyry/4800 zone. Ten of these holes targeted a 350-metre strike length between 400 and 840 metres depth, at 450 metres below the current resource.
Some notable hits include: 16 metres of 4.22 grams gold per tonne; 2 metres carrying 72.84 grams gold; and 6 metres averaging 8.8 grams gold.
Lake Shore drilled another 14 holes in the zone to infill and expand mineralization near surface and between existing resource blocks.
The standout hole carried 254 grams gold over 2 metres, including 1,350 grams gold over 0.3 metre.
It also drilled eight exploratory holes to the east of the current resource, an area with little previous drilling. Lake Shore says the results from these holes were “very positive” and extended mineralization by 300 metres from the current resource limit. It notes the structure remains open to the east, and could extend another 1.8 km. Highlight intercepts include 1.87 grams gold over 18 metres and 2.04 grams gold over 20 metres.
Of the six holes drilled at the Kapika zone and Fold Nose areas, some intersected broad mineralized zones up to 350 metres northwest of the current resource.
One such intercept was 20 metres grading 2.34 grams, including 8 metres of 4.1 grams gold at the Kapika zone.
“Based on drill results to date, we have excellent potential to add new open-pit and shallow-depth underground resources, which will greatly enhance our growth strategy in the Timmins area,” Makuch states.
Analyst Kerry Smith of Haywood Securities says that with more drilling success, he sees the company reaching the 1.2-million-oz. resource level at Thorne.
Smith outlines in an Aug. 30 note that while the drill results were good, investors are more carefully watching the company’s operational performance, which “has so far been disappointing.”
He has a target price of $3.15 on the stock.
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