Drill Tracker Weekly: Lake Shore Gold Continues to Expand 144 Gap Discovery

Drill Tracker Weekly is not exclusive to Resource Investing News and is published with permission from Mackie Research Capital Corporation. It highlights drilling results in context with our database of over 10,000 drilling and trenching results. The purpose of this report is to highlight drilling and trenching results that stand out from the pack and compare them to their peer group. This report does not constitute initiation of coverage or a recommendation.

Lake Shore Gold (TSX:LSG)

Price: $1.19

Market cap: $518 million

Cash estimate: $70 million

Project: Thunder Creek

Country: Ontario, Canada

Ownership: 100 percent

Historical resources: 3.7 million tonnes @ 4.3 g/t gold

Project status: Resource development

• Lake Shore Gold continues to define the high-grade core of the recently discovered 144 Gap Zone adjacent to the Thunder Creek deposit on its 100% owned Timmins West Mine in Ontario. Lake Shore Gold acquired the Thunder Creek deposit in 2009 though the $319 million purchase of West Timmins Mines.

• Preliminary drilling into the high-grade core since the October 2014 discovery hole has now outlined a core zone extending 300 metres vertically with a width of 50 to 125 metres and 75-125 metres along strike. Highlights from the current drilling include 55.0 metres grading 5.74 g/t Au starting at a depth of 837 metres including 21.1 metres of 11.79 g/t Au.

• The mineralization is hosted within a similar syenite intrusion as the nearby Thunder Creek Deposit in association with the same volcanic/ultramafic/intrusive/sedimentary contacts. Gold mineralization is associated with quartz veining, pyrite, sheelite and/or galena with visible gold within the quartz veins.

• The 144 Gap Zone is within 500 metres from the Thunder Creek Deposit and to facilitate lower cost underground drilling. The company is currently developing an exploration drift from Thunder Creek, which is expected to be completed by Q3/2015. The Company has budgeted $18 million to complete a 120,000 metre surface and underground drilling program for 2015 with the goal of replacing annual production with new upgraded resource ounces. The Company expects to announce a maiden resource for 144 Gap in early 2016.

• In Q1/2015, the Company exceeded expectations with record production of 53,000 ounces gold for the quarter at a cash operating cost of $510 per ounce sold. All in sustaining costs are $750 per ounce gold. 

Discovery history 144 Gap (October 2014): 46.0 metres @ 5.37 g/t gold

Current holes (144 Gap): 55.0 metres @ 5.74 g/t gold including: 21.1 metres @ 11.79 g/t gold. 8.2 metres @ 8.81 g/t gold

Risks Analysis

Data contained in DRILL TRACKER WEEKLY is based on early stage exploration activity. The results are obtained at the very early stages of exploration and therefore, individual results may not be reproducible with additional trenching or drilling, nor may the results ultimately lead to the discovery of an economic deposit. Delineation of a resource body requires an extensive data gathering exercise according to guidelines set out in National Instrument 43-101 before investors can be reliably assured of a competent body of mineralization that may be of economic interest. DRILL TRACKER WEEKLY is designed to highlight individual trench or drill results, which stand out as being materially anomalous and are particularly worth of note – a type of early warning flag for a particular property that warrants further attention. Hence, DRILL TRACKER WEEKLY does not provide a recommendation to buy, sell or hold a specific equity – it is an information reference source to help quantify the meaning and relevance of early stage exploration results. 

Relevant Disclosures Applicable to: Drill Tracker Weekly 

1. The research analyst or a member of the analyst’s household owns and/or has options to acquire shares of the subject issuer. At the date of this release, Wayne Hewgill, owns no shares in any companies in this report.

2. Foran Mining Corp. (FOM) is covered at Mackie Research Capital Corporation by analyst Peter Campbell.

• In February 2013, an Analyst from Mackie Research Capital Corporation visited Foran’s McIlvenna Bay Project site. Commercial travel expenses to and from site were paid by Mackie Research Capital Corporation.

3. Lake Shore Gold Corp. (LSG) is covered at Mackie Research Capital Corporation by analyst Barry Allan.

Analyst Certification

I, Wayne Hewgill certify that the information in this report is sourced through public documents that are believed to be reliable but accuracy and completeness as represented in this report cannot be guaranteed. The author has not received payment from any of the companies covered in this report. This report makes no recommendations to buy, sell or hold. Each analyst of Mackie Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.