Engineering & Mining Journal

FEB 2013

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

Issue link: https://emj.epubxp.com/i/109221

Contents of this Issue

Navigation

Page 30 of 99

GOLD undertaken drilling campaigns there before Lake Shore's 2004 program that ran to over 31,500 m of coring, mainly on down-dip extensions to known mineralization between 400 and 800 m depth. Utting picked up the story again. "We had finished a prefeasibility study on Timmins West in August 2007," he said, "with the NI 43-101 resource filed soon afterward. We then began an earn-in with West Timmins Mining, which had staked areas all around the property, and that gave us access to Thunder Creek and some other potential prospects along the same geological trends. Our initial agreement with West Timmins Mining was for a 60:40 joint venture, but after we had made a major discovery at Thunder Creek in the middle of 2009, we moved to acquire West Timmins Mining and gain full ownership of all of these claims." While having its main focus on Timmins West during this time, the company had not been idle elsewhere. In 2005, it bought out Black Hawk Mining, bringing it the Vogel property in the east of the Timmins camp, and signed a 20-year lease on the Schumacher property, one of the original producers there. Of more immediate significance was its acquisition of the Bell Creek mill, just outside Porcupine, from the joint venture between Goldcorp and Kinross Gold, which brought it an established but mothballed concentrator and, importantly, the Bell Creek underground mine. His thoughts echoed those expressed by Ignacio Bustamante, Hochschild Mining's CEO, at the time of the holding sale. "Since we identified the geological potential of Lake Shore Gold in 2007, we have supported the company in moving toward production," he said. "We are delighted with the progress achieved to date, which provides us with a profitable return on our investment." Meanwhile, Lake Shore remained active on the acquisition front, buying the former producing Marlhill mine and surrounding exploration prospects from Goldcorp in late 2009, and the Fenn-Gib and Guibord Main prospects (60 km east of Timmins, on the highly significant Destor-Porcupine fault zone) from Barrick Gold in August 2011. It also entered into an option agreement for a 50:50 joint venture with Aurizon Gold over exploration around Aurizon's Casa Berardi mine in Québec, while reaching an option agreement with Revolution Resources over the potential sale of some or all of its exploration prospects in Mexico, obtained as part of the West Timmins Mining acquisition. Over the past three years, the company has filed NI 43-101 resource statements for its combined Vogel-Marlhill project (2.6 million mt at 2.17 g/mt indicated), Fenn-Gib (40.8 million mt at 0.99 g/mt indicated), and a combined Timmins West/ Thunder Creek complex (5.8 million mt at 5.99 g/mt indicated)—plus, in each case, further inferred resources. It has also been able to transfer resources to probable reserves at the Timmins West complex, where it has 4.9 million mt grading 5.21 g/mt for 823,800 oz, and increase measured and indicated resources at Bell Creek to 4.25 million mt at 4.73 g/mt, containing 646,400 oz. New discoveries have included the 144 and Gold River prospects, both within the boundaries of the Timmins West complex. Greenstone Belt-hosted Resources Studies on the Timmins-Porcupine gold camp over the past 100 years have shown that there were a number of mineralization phases within this Archaean greenstonehosted resource. Much of the area is underlain by Abitibi-Wawa metavolcanic rocks, comprising a division of the extensive Superior province of the Canadian shield. This consists of east-west trending alternating belts of predominantly volcanic, sedimentary and gneissic rocks, fractured by major features such as the Porcupine-Destor fault zone that acted as corridors for gold mineralization emplacement. Vein-hosted gold occurs in association with quartz, carbonates and tourmaline, with pyrite and pyrrhotite the major sulphides present. Win-win Financing All of this, plus going ahead with development at Timmins West, came at a cost, and at the beginning of 2008, the company was able to seal a deal with Hochschild Mining under which Hochschild took an initial 20% stake in return for a C$64.5million cash injection. By the end of 2009, Hochschild had increased its holding to 36%, with no less than C$343 million provided to Lake Shore through a series of private placements, giving the company the financial foundation it needed to bring Timmins West into production and expand capacity at the Bell Creek mill. "In late 2010, Hochschild made a decision to focus on organic growth, and sold out its Lake Shore holdings in two transactions, one in November 2010 and the second in February 2011," Utting said. "It was a complete win-win situation. Hochschild provided valuable financing for Lake Shore Gold, then made a good profit on the shares when it sold them." www.e-mj.com One of the Atlas Copco drill rigs used for development at Bell Creek. (Photo: Simon Walker) FEBRUARY 2013 • E&MJ; 29

Articles in this issue

Links on this page

Archives of this issue

view archives of Engineering & Mining Journal - FEB 2013