Lake Shore Gold Corp.
TSX : LSG

Lake Shore Gold Corp.

August 15, 2007 17:00 ET

Lake Shore Gold Second Quarter Project Update

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 15, 2007) - Lake Shore Gold Corp. (TSX:LSG) ("Lake Shore" or "the Company") is pleased to provide a quarterly update on its exploration projects in Ontario and Quebec as of the end of June 2007.

Timmins West Gold Property

Resource Expansion and Exploration Drilling

The 2007 drilling program at Timmins West has focused on drilling the hanging wall vein zones and the main zone at depth. The Company has determined it will be more cost effective and efficient to test the vein and main zones from underground; therefore surface drilling of the vein zones has ceased. Drilling will focus instead on other exploration targets on the property and the cementing of certain drill holes that have been identified as potentially having an effect on the underground exploration program will be completed. Lake Shore plans to drill approximately 10,000 metres during 2007.

Up to three diamond drills were utilized on Timmins West during the second quarter. One drill was used to explore the down plunge extensions of the hanging wall veins, and another one to complete the two pilot holes for the shaft. In all, six holes were completed for a total of 4,506 metres. A third rig was cementing drill holes and removing casings around the mine site and planned infrastructure. Currently one drill is operating on Timmins West, extending an old exploration hole (TG97-50b) under the shaft area in order to further test the south limb of the ultramafic complex.

Pre-Feasibility Study

The technical work for the pre-feasibility study ("PFS") at Timmins West was substantially completed during the second quarter. The work is currently being reviewed and assembled into a report for completion during the third quarter. The Company announced an agreement for the acquisition of the Bell Creek mine and mill facility (the "Bell Creek Assets"), which will provide a processing facility to treat ore from Timmins West. During the second quarter the Company updated the Bell Creek closure plans, which are being completed by an independent consulting company. Closure plans for the Bell Creek mill and mine will be available for review in draft form by the third quarter. SRK Consulting ("SRK") continued to assess the preliminary underground Timmins West mine plan, which was prepared to complete the PFS. SRK is also compiling the consolidated PFS report at Timmins West for completion in August. Based on these major milestones in the development of Timmins West, the Company initiated intensive studies to modify and recommission the Bell Creek mill and associated tailings storage facilities to handle the metallurgical testing of the Timmins West mineralization. This work continued during the second quarter and will be ongoing during the third quarter. The environmental and permitting status studies regarding the Bell Creek Assets were completed and will be incorporated into the PFS report. Detailed long-range studies and options for the Bell Creek Assets will continue to be evaluated.

Advanced Exploration Program

Preliminary plans for an advanced underground exploration program were completed at Timmins West and are currently being compiled for incorporation into the PFS. This plan provides for an exploration shaft to be sunk to a level that will provide a practical platform 600 metres below surface for in-fill drilling in the area of current resources and to explore the prospective areas outside the current resource envelope. A representative bulk sample from several of the major mineralized zones will be excavated from this level. To prepare for site access and site preparation, a bridge crossing Thunder Creek and a portion of the site access road was completed. Site preparation started during the second quarter and will be completed in August. The Company sourced and purchased a suitable hoist and associated equipment for the advanced exploration program, which will be delivered to the site during the third and fourth quarters. Work on various agreements required to have the site connected to the Hydro One electrical grid continued and all major agreements have been completed. The remaining documentation required for the connection will be put in place during the third quarter. Electrical equipment needed to make the connection will be ordered for delivery during the fourth quarter. Detailed planning will continue in order to prepare for other major commitments associated with the implementation of the advanced exploration program and the PFS.

In April 2007 the Company received government approval of the closure plan application and receipt of related permits required to proceed with the program. The Company is in the process of obtaining various certificates of approval for the site, as they will be required as the project advances.

Vogel-Schumacher Properties

No exploration work was carried out on the Vogel and Schumacher properties during the second quarter. It is anticipated that once the Bell Creek acquisition is completed, a strategy will be developed for the Bell Creek Complex, which includes the Bell Creek mine and Vogel and Schumacher properties. This strategic study will assess the viability of bringing the Bell Creek gold mine back into production and will include a proposed underground exploration program of the Vogel and Schumacher gold zones gaining access through the Bell Creek mine shaft. The study will also investigate and recommend a surface diamond drill program on the properties.

Blakelock Property

An extensive reverse circulation ("RC") drill program was conducted during the first quarter with two reverse circulation drills. The program consisted of a total of 90 RC holes primarily located on the western and central parts of the property and was designed to test targets identified through a new magnetic interpretation. RC samples were collected from the overburden till cover and from the bedrock. This method is widely utilized in areas with extensive overburden cover in the Canadian Shield in order to further define diamond drill targets. The samples collected from this program will be analyzed for their gold grain content and shape in an attempt to determine proximity to the in situ source of any gold mineralization to the north, in the up ice direction from the drill holes. Work during the second quarter consisted primarily of compilation and analysis of data received from the RC drill program carried out in February and March of this year. In total, three separate drill holes contained pristine gold grain counts. These three holes as well as areas containing anomalous geochemical assays will be targeted in the upcoming diamond drill hole program, which began in mid-July. Further analysis of samples taken during the winter RC program are ongoing, the results of which will allow for further refinement of targeting criteria in upcoming diamond drilling campaigns.

Thunder Creek Property

Lake Shore's Thunder Creek property consists of 54 claim units, contiguous to and southwest of Timmins West, and is underlain by an ultramafic intrusive body similar to the Ultramafic Zone at Timmins West. The Thunder Creek property represents a primary gold exploration target. The Company is earning a 60% interest pursuant to an option agreement with West Timmins Mining Inc. by spending $1.7 million over a five-year period ending in November 2008. Approximately $1 million in expenditures has been incurred to date. In 2007 Lake Shore plans to complete a minimum of 8,000 metres of diamond drilling on the Thunder Creek property, systematically testing the two structural zones as well as other exploration targets.

The drilling program, which began on March 27, 2007, was interrupted on May 6 and resumed on June 22. To date, four holes totalling 1,309 metres were completed, and a fifth hole (TC0730) was completed on July 31. Core logging is up to date. The first four holes did not return any significant gold assay results greater than 2.0 grams per tonne. Hole TC07-30 intersected a 6.80 metre wide structural zone accompanied by strong alteration and mineralization. The zone returned 10.91 grams per tonne gold over 3.65 metres, including 14.68 grams per tonne gold over 2.65 metres. A second zone further below returned 5.43 grams per tonne gold over 1.20 metres. Both of these mineralized zones are hosted within a large ultramafic intrusive body, similar to the intrusive hosting the Ultramafic Zones on the Timmins West property. These two zones appear to be sub-parallel to the Rusk Zone. The Rusk Zone represents another intensely altered shear intersected by TC07-30. It is hosted by sediments along the southeast contact of the ultramafic body, and one sample with visible gold assayed 27.60 grams per tonne gold over 0.50 metres at this location. The new intersections are located only 865 metres southwest of the location of the Timmins West shaft planned as part of the advanced underground exploration program and occur at approximately the 280-metre level from surface.

Bell Creek Acquisition

This acquisition of the Bell Creek Assets has been conditionally approved by the Toronto Stock Exchange and the definitive agreement was signed on July 20, 2007. In conjunction with the technical studies to utilize the mill to treat future potential Timmins West ore, a due diligence team conducted physical, structural, legal, property, environmental and permit status investigations during the due diligence period which was concluded on April 20, 2007. Payment for the transaction will be completed in the fourth quarter of 2007. For details on the acquisition of the Bell Creek Assets refer to Lake Shore's press release dated January 31, 2007, available on www.lsgold.com.

About Lake Shore

Lake Shore is a mineral exploration company engaged in the acquisition and exploration of mineral properties with prospects for hosting gold and base metal deposits. The Company is currently active in Canada and holds a number of mineral resource properties, either directly or through option agreements, in Ontario and Quebec. Lake Shore is a reporting issuer in British Columbia, Alberta, Manitoba, Ontario and Quebec, and trades on the Toronto Stock Exchange under the symbol LSG.

Lake Shore's Qualified Persons ("QP") are Jacques Samson, P.Geo., for Timmins West and Thunder Creek; Richard Labine, P.Geo., for Vogel-Schumacher; and William Waychison, P.Geo, for DeSantis. Each QP has prepared or supervised the preparation of the scientific or technical information for the respective properties.

In conjunction with this quarterly project update, the Company has filed a quarterly Management's Discussion and Analysis and Financial Statements on the SEDAR website at www.sedar.com.

Additional information is provided in the Company's audited consolidated financial statements for the year ended December 31, 2006 and the Company's Annual Information Form and Information Circular, also at www.sedar.com.

Forward-looking Statements

Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the Company's periodic filings with Canadian securities regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not assume the obligation to update any forward-looking statements.

Contact Information

  • Lake Shore Gold Corp.
    Meghan Brown
    Manager Investor Relations
    (604) 669-3533
    (604) 688-5175 (FAX)
    Email: mbrown@lsgold.com
    or
    Lake Shore Gold Corp.
    Brian R. Booth
    President and CEO
    (705) 525-0992
    (705) 525-7701 (FAX)
    Email: info@lsgold.com
    Website: www.lsgold.com