Mr. Tony Makuch reports
LAKE SHORE GOLD ANNOUNCES LARGE INCREASE IN MEASURED AND INDICATED RESOURCES AT BELL CREEK MINE
Lake Shore Gold Corp. has provided an updated resource estimate for the company's Bell Creek mine which is located in Timmins, Ont. The reported resource contains 4,249,451 tonnes at an average grade of 4.73 grams per tonne for a total of 646,431 ounces in the measured an indicated categories and 6,088,506 tonnes grading 4.87 g/t for 953,845 ounces in the inferred category. The above totals reflect the conversion of approximately 425,000 ounces of inferred resources from the previous resource estimate, released in the December, 2010, to the measured and indicated categories, and the addition of approximately 185,000 ounces of new resources to the inferred category. The totals also reflect the impact of depletion due to mining and other activities since the previous resource estimate. The base case resource was estimated assuming a long-term gold price of $1,200 (U.S.) per ounce of gold and a cut-off grade of 2.20 g/t.
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Bell Creek measured and indicated resources increase over 150 per cent to
646,431 ounces (4,249,451 tonnes at 4.73 g/t),
inferred resources total 953,845 ounces (6,088,506 tonnes at 4.87 g/t)
(using base case 2.2 g/t cut-off grade);
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Average resource grade increases approximately 10 per cent based on inclusion of
new exploration and infill drilling results;
-
Potential for significant new resources, including additional measured
and indicated resources, through continuing drilling from surface and
underground.
A summary of resources at the Bell Creek mine is provided in the attached table.
Capped grade
Category Tonnes (g/t Au)(i) Oz Au
Measured 224,466 4.20 30,320
Indicated 4,024,986 4.76 616,111
M and I 4,249,451 4.73 646,431
Inferred 6,088,506 4.87 953,845
(i) Grams per tonne
Note: The resource estimate for Bell Creek mine deposit was estimated using
the inverse distance to the power two (ID2) interpolation method with all gold
assays capped to 75 g/t for the North A zones and 50 g/t for the North B
zones. An assumed long-term gold price of $1,200 (U.S.) per ounce was used for
both deposits. The base case estimate assumes a cut-off grade of 2.20 g/t.
Sums may not add due to rounding.
Tony Makuch, president and chief executive officer of Lake Shore Gold, commented: "The updated resource estimate at the Bell Creek mine highlights the robust nature of this project with attractive grades and good widths that improve at depth. We are encouraged by the conversion rate of inferred resources to the measured and indicated categories, and our ability to continue to both add more total ounces and improve grades with additional drilling. As we continue evaluating the project, an important priority of ours will be to optimize grades for mining, and the sensitivity analysis shows that excellent potential exists to increase grades using higher cut-off levels. We are continuing drilling at Bell Creek and plan to complete a preliminary economic assessment, which will assist us in establishing long-term capital and operating plans as we continue to evaluate the project's feasibility."
The new resource replaces the previous estimate, released in December, 2010, which included 251,200 ounces (1.79 million tonnes grading 4.36 g/t) in the measured and indicated categories and 1,192,900 ounces (8,427,500 tonnes grading 4.40 g/t) in the inferred category. The new resource was estimated using an updated and expanded geological model extending to 1,700 metres below surface and 330 holes (70,874 metres) of new drilling. Of the new holes, 273 (38,749 metres) were drilled from underground platforms and focused on infill and conversion of inferred resources between the 300- and the 500-metre levels. The remaining 57 new holes (32,125 metres) were drilled from surface and designed mainly to explore the down-plunge extension of the deposit below the 1,250-metre level, the limit of the December, 2010, resource estimate.
The total resources reported are contained in eight separate zones, namely the North A zone, North A2 zone, North A3 zone, North A Extension zone, North B zone, North B2 zone, North A FW zone and North A HW zone, with the bulk of the resources being contained with the North A, North A2 and North B zones. Approximately 57 per cent of the total measured and indicated ounces (368,701 ounces) and 33 per cent of the inferred ounces (321,260 ounces) are contained within the North A zone which has an estimated average width of approximately 7.0 metres. The North A zone was previously the main source of feedstock for the Bell Creek mine. A detailed review of the estimated tonnes and grades for each of these eight zones is presented in the table entitled, "Resource summary by zone (2.20 g/t cut-off grade)."
Included within the mineral resource estimate is a sensitivity analysis from the base case resource estimate using various cut-off grades between 2.2 and 5.00 g/t. Results from the sensitivity analyses are summarized in the tables with additional detail provided. The analysis indicates the robust nature of the overall resource and potential to host substantially higher grades at reduced gold prices and increased cut-off grades.
Cut-off grade Grade Contained
(g/t) Tonnes (g/t)(i) ounces
2.2 (base case) 10,337,958 4.82 1,600,276
2.5 9,450,430 5.05 1,533,167
3.0 8,014,550 5.46 1,405,885
4.0 5,534,171 6.35 1,129,319
5.0 3,774,657 7.21 875,116
(i) The sensitivity analysis utilizes resources from the measured, indicated
and inferred categories and is for information purposes only.
The base case resource estimate and sensitivity calculations were determined using an assumed minimum mining width of 2.0 metres, average mining costs of $82 per tonne and average processing recoveries of 96.5 per cent.
The reported resource extends from surface to a vertical depth of approximately 1,700 metres, with the deposit remaining open to depth and along strike. Drilling is continuing at the property with four diamond drills on surface and two drills underground with a prime focus of converting additional inferred resources to the measured and indicated categories.
In addition to the updated resources at Bell Creek mine, resources at the company's Bell Creek complex also include the initial resources at the adjacent Marlhill and Vogel properties, released on May 2, 2011. A review of total resources at the Bell Creek complex is provided in the tables.
Resources (Vogel(i)/Marlhill) (May 2, 2011)
Capped grade
Category Tonnes (g/t Au) Oz Au
Measured - - -
Indicated 2,614,000 2.17 182,400
M and I 2,614,000 2.17 182,400
Inferred 1,459,000 3.60 168,800
Resources (Bell Creek mine) (March 30, 2012)
Capped grade
Category Tonnes (g/t Au) Oz Au
Measured 224,466 4.20 30,320
Indicated 4,024,986 4.76 616,111
M and I 4,249,451 4.73 646,431
Inferred 6,088,506 4.87 953,845
Total resources (Bell Creek complex)
Capped grade
Category Tonnes (g/t Au) Oz Au
Measured 224,466 4.20 30,320
Indicated 6,638,986 3.74 798,511
M and I 6,863,451 3.76 828,831
Inferred 7,547,506 4.63 1,122,645
(i) Resources at Vogel include a combination of open pit and underground
resources (see press release dated May 2, 2011).
Qualified persons
The company's qualified person (QP) for the updated resource estimate at Bell Creek mine is Ralph Koch, PGeo, chief mine resource geologist. Mr. Koch is considered a qualified person according to the definitions of NI 43-101 and is an employee of Lake Shore Gold. As QP, he has prepared or supervised the preparation of the scientific or technical work and has verified the data disclosed in this press release.
RESOURCE SUMMARY BY ZONE
(2.20 g/t cut-off grade)
Grade
Category Zone Tonnes (g/t) Ounces
Measured North A 182,296 4.15 24,323
North B 22,738 4.00 2,926
North B2 10,987 3.46 1,223
North A FW 8,129 6.88 1,799
North A HW 316 4.81 49
Total 224,466 4.20 30,320
Indicated North A 2,281,131 4.70 344,379
North A2 677,950 6.17 134,392
North A3 62,623 4.10 8,263
North A Extension 23,492 5.80 4,381
North B 564,612 3.82 69,298
North B2 338,841 3.98 43,384
North A FW 56,923 5.15 9,432
North A HW 19,413 4.14 2,583
Total 4,024,986 4.76 616,111
Measured and indicated total 4,249,451 4.73 646,431
Inferred North A 2,033,010 4.92 321,260
North A2 1,658,945 5.19 276,739
North B 1,952,471 4.67 293,183
North B2 444,080 4.39 62,664
Inferred Total 6,088,506 4.87 953,845
Notes:
1. CIMM definitions were used for classification of mineral resources.
2. Mineral resources for the Bell Creek mine are estimated using a gold price
of $1,200 (U.S.) per ounce and mineral resources at Marlhill and Vogel with
a gold price of $1,125 (U.S.) per ounce.
3. Mineral resources at Vogel include a combination of open pit and underground
resources.
4. A minimum mining width of two metres was assumed for all underground
resources.
5. Capped gold grades are used in estimating the mineral resource average grade.
6. Sums may not add up due to rounding
7. There are no mineral reserves estimated for the Bell Creek property.
8. Metallurgical recoveries are assumed to average 96.5 per cent.
9. Mining costs are assumed to average $82 per tonne.
We seek Safe Harbor.
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