Lake Shore Gold Corp.
TSX : LSG
NYSE Amex : LSG

Lake Shore Gold Corp.

May 01, 2012 08:56 ET

Lake Shore Gold Reports Significant New Drill Intercepts at Fenn-Gib Open-Pit Project Including 1.93 gpt Gold Over 241.20 Metres, Results Highlight Potential for Major Resource Expansion

TORONTO, ONTARIO--(Marketwire - May 1, 2012) - Lake Shore Gold Corp. (TSX:LSG)(NYSE Amex:LSG) -

  • Drilling in west portion of current open-pit resource intersects thick, high-grade intercepts in untested gaps and confirms expansion potential to north and west

    • Key intercepts include 1.93 grams per tonne ("gpt") gold ("Au") over 241.20 metres ("m"), 1.26 gpt Au over 324.00 m, 0.89 gpt Au over 260.50 m and 0.73 gpt Au over 284.0 m

  • Drilling to depth expands mineralization up to 200 metres below current lower limit of resource

    • Intercepts include 1.02 gpt Au over 190.50 m, 2;48 gpt Au over 50.10 m, 0.70 gpt Au over 183.50 m, including 2.48 gpt Au over 50.10 m, and 0.68 gpt Au over 177.10 m

  • Drilling in east portion of resource extends Main Zone mineralization minimum of 200 metres eastwards

    • Intercepts include 1.01 gpt Au over 52.50 m, 1.66 gpt au over 41.0 m, 0.87 gpt Au over 71.8 m, 0.73 gpt Au over 68.80 m and 1.74 gpt Au over 6.00 m

  • Additional exploration targets identified (G-101 zone, Talisman shaft and Central Syenite Zone), highlight potential for significant new discoveries within 1.5 kms of current resource

  • Silver assaying indicates overall average grade of 1 to 2 gpt silver and gold to silver ratio of around 1:1 (silver values not included in current resource).

Lake Shore Gold Corp. ("Lake Shore Gold" or the "Company") today reported the results of 26 holes (15,846 metres) at the Company's wholly owned Fenn-Gib project. The Fenn-Gib project, which is located approximately 60 kms east of Timmins along the eastern extension of the Destor Porcupine ("DPFZ") and Pipestone Fault Zones ("PFZ"), has the potential to host significant open-pit and underground resources. The current drill program is being conducted to expand and infill the existing mineralized structure with a goal of increasing the total resources at the project from the current level of 1.30 million ounces Au (40.8 million tonnes grading 0.99 gpt) in the Indicated category and 0.75 million ounces Au (24.5 million tonnes at 0.95 gpt) in the Inferred category.

Tony Makuch, President and CEO of Lake Shore Gold, commented: "We are extremely pleased with the most recent drill results which, when factored into new pit optimization studies, highlight the potential to substantially grow resources at the Fenn-Gib project. Based on the drilling we have completed since acquiring Fenn-Gib last August, we have now expanded the known mineralization by 200 metres to the north, to the east and to depth, with the deposit remaining open. We have also identified a number of new exploration targets, all within 1.5 kms of the current resource. Also encouraging are the opportunities that exist to establish a low strip ratio starter pit and to apply high silver values to the existing resource, both of which could significantly enhance the economics of the project. Based on what we have seen so far, we are delighted to have Fenn-Gib in our portfolio and believe that the project has excellent potential to become a successful open-pit mining operation in the same category as other projects currently being developed in Northern Ontario and Quebec."

Significant results from the most recent drilling include: 1.26 gpt Au over 324.00 m, including 2.27 gpt Au over 50.50 m, and 3.41 gpt Au over 63.0 m, including 8.19 gpt Au over 9.70 m in FG-12-05, 1.93 gpt Au over 241.20 m, including 8.00 gpt Au over 18.00 m, 3.82 gpt Au over 32.70 m and 3.66 gpt Au over 21.0 m in FG-12-15, 0.73 gpt Au over 284.0 m in FG-12-14 and 0.89 gpt Au over 260.50 m in FG-12-07. These four holes were drilled in the west portion of the current open pit resource and successfully confirmed that considerable potential exists to expand the resource to both the north and west.

FG-12-15 and FG-12-14 intercepted the Main zone near the west limit of the current resource approximately 100 metres below previously reported FG-11-04, which had an intercept of 1.31 gpt over 414.0 metres. Drilling to the west and below these intercepts is extremely limited and the potential for further expansions of the zone in both directions is considered excellent. FG-12-05 was collared 75 metres north of FG-12-04 and not only confirmed the previous intercept for the Main Zone in FG-12-04 but also extended the recently discovered Footwall Zones in FG-11-04 by approximately 75 metres to the east.

Significant results from drilling below the current resource include: 1.02 gpt Au over 190.50 m, including 3.69 gpt Au over 14.00 m in FG-12-19, 0.70 gpt Au over 183.50 m, including 2.48 gpt Au over 50.10 m in FG-12-33, and 0.68 gpt Au over 177.10 m, including 0.94 gpt Au over 82.00 m, in FG-12-34. These holes are among the deepest to test the deposit to date and strongly confirm the down plunge extension of the Main Zone by a minimum of 200 metres below the current resource. The mineralized system is still considered open to depth.

Drilling in the east portion of the resource successfully extended the Main Zone mineralization to the east by 200 metres. Key intercepts include 1.01 gpt Au over 52.50 m in FG-12-31, 1.66 gpt Au over 41.0 m in FG-12-29, and 0.87 gpt Au over 71.80 m in FG-12-22 and 0.73 gpt Au over 68.80 m and 1.74 gpt Au over 6.00 m in FG-12-17.

Drilling at the Fenn-Gib project also involved assaying for silver. The results indicate elevated silver values with key intersections including 1.03 gpt silver over 324.00 m in FG-11-05, 1.20 gpt silver over 140.00 m in FG-11-06, 0.74 gpt silver over 260.50 m in FG-11-07 and 0.67 gpt over 189.50 m in FG-11-08. Composites for silver across the mineralized envelope average 1.00 to 2.00 gpt with a gold to silver ratio of around 1:1. These silver grades are higher than those found in most gold deposits in the Timmins Camp, where silver values are typically less than 0.5 gpt with ratios closer to 6:1.

The Company has also identified a number of additional high-potential exploration targets, all located within a 1.5 km radius of the current resource. Key targets to the west include the area surrounding the historic Talisman shaft and the G-101 Zone. The Talisman shaft is located approximately 500 metres west of the current resource and along the interpreted extension of the Main Zone. The G-101 Zone showing is located 1.5 kms to the southwest on a potential new structure. Limited past drilling at the G-101 Zone with partial sampling was completed by NAR Resources Ltd in 1995 and included intercepts of 4.91 gpt over 11.98 m in historic drill hole C4-3, 3.25 gpt over 5.18 m in historic hole C4-5 and 1.18 gpt over 10.06 m in C4-5A. The key targets to the east include the direct east extension of the Main Zone from the current resource as well as a series of felsic intrusives located approximately 1.5 kms to the southeast known as the Central Syenite target. Total drilling along the east extension and Central Syenite is extremely limited although past results in short holes at the Central Syenite have obtained values of up to 9.0 gpt over 3.0 metres.

Current work at the project includes further research and field surveys to gain additional information regarding the newly identified exploration targets as well selective drilling to evaluate the overall expansion potential at the project.

Quality Control

The Company's Qualified Persons ("QP's") for the surface drilling and check sampling programs being completed on the Fenn-Gib property are Stephen Conquer, P. Geo. and Bob Kusins, P.Geo. As QP's, they have prepared or supervised the preparation of the scientific or technical information and have verified the data disclosed in this press release. Both Mr. Conquer and Mr. Kusins are employees of Lake Shore Gold.

Lake Shore Gold has implemented a quality-control program to ensure best practice in the sampling and analysis of the drill core. NQ size drill core is saw cut, half the drill core is sampled in standard intervals while the remaining half of the core is stored in a secure location. The drill core is transported in security-sealed bags for preparation at ALS Minerals Prep Lab located in Timmins, Ontario, and the pulps shipped to ALS Minerals Assay Laboratory in either Vancouver, B.C. or Val D'Or, Quebec. Assays have been completed by ALS Minerals using a standard fire assay with a 30g aliquot and an AA finish. Samples with assay results above 10.0 gpt are re-analyzed using a gravimetric finish. ALS Minerals is an ISO 9001-2000 registered laboratory preparing for ISO 17025 certification.

There is no guarantee that drill results reported in this news release will lead to the identification of a deposit that can be mined economically, and further work is required to identify mineable reserves at the Fenn-Gib project.

About Lake Shore Gold

Lake Shore Gold is a gold mining company that is in production and pursuing rapid growth through the successful exploration, development and operation of three wholly owned, multi-million ounce gold complexes in the Timmins Gold Camp. The Company is in commercial production at both the Timmins West and Bell Creek mines, with material being delivered for processing to the Bell Creek Mill. A 50% mill expansion, to 3,000 tonnes per day, is advancing towards completion by late 2012. The Company continues to have an active drilling program aimed at supporting current operations and evaluating high-priority exploration targets around the Timmins Camp. The Company's common shares trade on the TSX and NYSE Amex under the symbol LSG.

FORWARD-LOOKING STATEMENTS

Certain statements in this press release relating to the Company's expected production levels, production growth, exploration activities, potential for increasing resources, project expenditures and business plans are "forward-looking statements" or "forward-looking information" within the meaning of certain securities laws, including under the provisions of Canadian provincial securities laws and under the United States Private Securities Litigation Reform Act of 1995 and are referred to herein as "forward-looking statements." The Company does not intend, and does not assume any obligation, to update these forward-looking statements. These forward-looking statements represent management's best judgment based on current facts and assumptions that management considers reasonable, including that operating and capital plans will not be disrupted by issues such as mechanical failure, unavailability of parts, labour disturbances, interruption in transportation or utilities, or adverse weather conditions, that there are no material unanticipated variations in budgeted costs, that contractors will complete projects according to schedule, and that actual mineralization on properties will not be less than identified mineral reserves. The Company makes no representation that reasonable business people in possession of the same information would reach the same conclusions. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In particular, fluctuations in the price of gold or in currency markets could prevent the Company from achieving its targets. Readers should not place undue reliance on forward-looking statements. More information about risks and uncertainties affecting the Company and its business is available in the Company's most recent Annual Information Form and other regulatory filings with the Canadian Securities Administrators, which are posted on sedar at www.sedar.com, or the Company's most recent Annual Report on Form 40-F and other regulatory filings with the Securities and Exchange Commission.

Fenn-Gib Property - Significant Assay Results - New Drill Results - April 2012
Hole From To Length Au Assay Ag Assay Comments
Number (m) (m) (m) (gpt) (gpt)
FG-11-05 27.00 351.00 324.00 1.26 1.03 Main Zone
includes 69.50 120.00 50.50 2.27 1.39
and includes 229.90 254.00 24.10 2.43 0.84
495.60 502.60 7.00 1.63 0.32
570.00 633.00 63.00 3.41 0.75 FWZ
includes 588.80 623.00 34.20 4.47 0.90 "
includes 609.00 618.70 9.70 8.19 1.35 "
644.00 662.00 18.00 1.77 0.42 FWZ
FG-11-06 6.00 146.00 140.00 0.97 1.20 Main Zone
297.60 304.70 7.10 2.45 0.77 FWZ
494.00 500.00 6.00 1.73 0.45 FWZ
FG-11-07 12.00 272.50 260.50 0.89 0.74 Main Zone
includes 46.00 87.00 41.00 1.93 0.89 "
539.40 561.00 21.60 1.05 0.44 FW
FG-11-08 27.00 216.50 189.50 0.67 0.67 Main Zone
includes 50.00 71.00 21.00 2.08 0.99
346.00 351.00 5.00 1.91 0.46 FWZ
541.50 580.90 39.40 2.24 0.67 FWZ
FG-11-09 325.20 342.50 17.30 0.85 4.35 Main Zone/FWZ
417.20 436.80 19.60 0.93 1.21
FG-12-10 84.00 92.00 8.00 0.70 1.00 Main Zone/FWZ
133.50 144.50 11.00 0.46 2.13 "
FG-12-11 46.10 81.10 35.00 0.50 1.05 Main Zone/FWZ
247.00 262.00 15.00 0.91 0.36 FWZ
332.50 336.70 4.20 1.55 0.66 FWZ
414.00 422.00 8.00 1.04 0.43 FWZ
FG-12-13 304.00 392.40 88.40 0.70 1.32 Main Zone
includes 304.00 340.90 36.90 0.90 0.84 "
FG-12-14 194.00 478.00 284.00 0.73 0.86 Main Zone
includes 245.00 265.00 20.00 1.46 2.37 "
and includes 464.00 478.00 14.00 2.42 0.36 "
512.00 525.80 13.80 0.53 0.44 FWZ
FG-12-15 173.00 181.60 8.60 1.54 1.99 Main Zone
230.00 471.20 241.20 1.93 1.03 "
includes 251.00 269.00 18.00 8.00 2.05 "
and includes 370.40 403.10 32.70 3.82 0.81 "
and includes 432.00 453.00 21.00 3.66 0.64 "
494.00 500.00 6.00 2.33 1.03 FWZ
FG-12-17 283.50 289.50 6.00 1.74 17.73 Main Zone
380.20 449.00 68.80 0.73 0.55
includes 380.20 408.00 27.80 1.13 0.79
FG-12-19 490.50 681.00 190.50 1.02 1.15 Main Zone
includes 621.00 635.00 14.00 3.69 3.71
FG-12-21 616.40 650.40 34.00 0.76 1.23 Main Zone
includes 616.40 625.20 8.80 2.04 3.31
FG-12-22 382.70 454.50 71.80 0.87 0.99 Main Zone
includes 404.50 454.50 50.00 1.12 1.14
includes 404.50 423.60 19.10 2.03 1.85
FG-12-23 238.50 243.00 4.50 3.75 43.90 Main Zone
387.70 438.00 50.30 0.72 0.70
includes 410.00 438.00 28.00 1.01 0.89
FG-12-24 553.50 628.00 74.50 0.58 1.71 Main Zone
includes 561.00 578.00 17.00 1.15 1.05
includes 561.00 569.00 8.00 2.03 1.36
FG-12-25 476.40 496.50 20.10 1.39 0.78 Main Zone
includes 476.40 485.50 9.10 2.09 0.78
FG-12-27 182.00 261.40 79.40 0.63 1.50 Main Zone
includes 233.40 261.40 28.00 0.82 1.86
FG-12-29 351.50 392.50 41.00 1.66 1.27 Main Zone
includes 371.40 392.50 21.10 2.96 1.30
FG-12-31 465.40 517.90 52.50 1.01 1.43 Main Zone
includes 485.20 517.90 32.70 1.43 1.38
FG-12-32 174.70 196.80 22.10 1.01 0.64 Main Zone
includes 180.60 185.60 5.00 2.48 1.60
FG-12-33 525.60 709.10 183.50 0.70 1.24 Main Zone
inlcudes 602.00 652.10 50.10 2.48 2.14
includes 637.90 652.10 14.20 3.78 1.75
FG-12-34 540.90 718.00 177.10 0.68 0.79 Main Zone
includes 598.00 680.00 82.00 0.94 0.77
includes 654.00 680.00 26.00 1.32 0.81
Notes:
1) FG-12-12, FG-12-26, FG-12-28 and FG-12-30 were stopped early due to excess deviation and did not reach intended target.
2) FG-12-04 was extended from 651 to 836m and did not return any significant values.
3) FG-12-16, FG-12-18 and FG-12-20 did not return any significant values
4) True widths are not reported at this time.
5) Assay results are reported uncut.

To view the map associated with this press release, "Figure 1 - Plan Map," please visit the following link: http://media3.marketwire.com/docs/LSGFigure1501.pdf.

To view the map associated with this press release, "Figure 2 - Long Section," please visit the following link: http://media3.marketwire.com/docs/LSGFigure2501.pdf.

To view the map associated with this press release, "Figure 3 - Regional Map," please visit the following link: http://media3.marketwire.com/docs/LSGFigure3501.pdf.

To view the map associated with this press release, "Figure 4 - Location Map," please visit the following link: http://media3.marketwire.com/docs/LSGFigure4501.pdf.

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