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10 E&MJ; • MARCH 2016 www.e-mj.com REGIONAL NEWS - U.S. & CANADA Tahoe Resources Acquiring Lake Shore Gold Tahoe Resources has agreed to acquire Lake Shore Gold in an all-share transaction that values Lake Shore at about $C945 million. Upon completion of the transaction, exist- ing Tahoe and Lake Shore Gold sharehold- ers will own approximately 74% and 26%, respectively, of the pro forma company. Tahoe is headquartered in Reno, Nevada. The company owns and operates the underground Escobal silver mine in Guatemala and the La Arena and Shahuindo gold mines in Peru. Escobal is one of the world's largest, highest-grade silver mines. Lake Shore Gold is a Canadian-based gold producer with operations in the Timmins gold camp of northern Ontario. The company has two mines, Timmins West and Bell Creek. Ore from Timmins West is deliv- ered to the Bell Creek mill for processing. Lake Shore also has a number of highly prospective projects and exploration tar- gets in and around the Timmins camp. Concurrent with the announcement of its acquisition by Tahoe Resources, Lake Shore announced initial indicated and inferred resources at its 144 Gap deposit totaling 620,900 ounces (oz) of gold at grades of more than 5 oz per metric ton (mt). Tahoe and Lake Shore between them have 3.4 million oz of measured and indi- cated gold resources and 6 million oz of inferred gold resources across eight ex- ploration projects in Peru and Canada, with strong near-mine potential to add to these resources. Combined 2016 production by Tahoe and Lake Shore is forecast at 18 million to 21 million oz of silver at all-in sustaining costs of $10 to $11/oz and 370,000 to 430,000 oz of gold at all-in sustaining costs of $950 to $1,000/oz. All operations generate free cash flow in the current com- modity price environment. Detour Gold Reworks its Mine Plan Detour Gold has announced a new life-of- mine plan for its Detour Lake property in northeast Ontario. The company initiated production from the Detour Lake open pit in January 2013 and poured its first gold on February 18, 2013. Commercial pro- duction was declared in September 2013. From 2013 to the end of 2015, the Detour Lake mine produced 1.2 million oz of gold from 49 million mt of ore processed at an average grade of 0.85 g/mt gold. Detour Gold's new mine plan calls for near-term development of the relatively shallow West Detour deposit immediately west of the currently mined Detour Lake open pit, along with processing of fines from low-grade stockpiles, beginning at a rate of 1 million mt/y in 2019. Mill throughput will increase from 56,000 mt/d to 63,000 mt/d in 2019. Mining at West Detour will allow deferral of some stripping required for min- ing the Detour Lake open pit. Based on current mineral reserves, the Detour Lake operation has a remaining mine life of 23 years, with West Detour hav- ing an operating life of about 10 years from 2018 to 2028. Life-of-mine gold produc- tion will average an estimated 655,000 oz/y from 2016 through 2038, including 617,000 oz/y from 2016 through 2018. Life-of-mine total site costs are esti- mated at $690/oz of gold produced. Life- of-mine capital costs are estimated at C$1.1 billion. Proven and probable reserves on the Detour property, including low-grade fines, now total 16.4 million oz of contained gold in 514 million mt at a combined grade of 0.99 g/mt gold. Current mining at Detour is based on conventional open-pit mining methods, and mining at West Detour is planned to use the same methods. Golden Summit PEA Predicts 24-year Mine Life Freegold Ventures has reported positive results from a preliminary economic assess- ment (PEA) of its Golden Summit project 32 km northeast of Fairbanks, Alaska. The PEA evaluates a two-phase, 24-year open- pit mine generating separate oxide and sul- phide gold ore streams, each operating at 10,000 mt/d. Processing operations for the oxide and sulphide materials are heap leach and bioxidation, respectively. Golden Summit's peak annual gold pro- duction is estimated at 158,000 oz, while average annual production is estimated at 96,000 oz. Life-of-mine doré production is estimated at 2.34 million oz. Total cash costs are estimated at $842/oz of gold produced, including royalties, refining and transport. The Golden Summit mine will produce up to 3.5 million mt/y of each ore type. Oxide ore is mined in the early years, as it forms a cap over the sulphide ore. Years in the middle of the production schedule have an overlap of oxide and sulphide ore pro- duction prior to completion of oxide mining. Mining of the oxide material will con- tinue through year 14 of the 24-year mine life. Mining of sulphide material will con- tinue from year nine through the end of the mine life. Both oxide and sulphide ore materials will be transported from the pit to a primary crusher located near the pit exit. After primary crushing, oxide and sulphide materials will be transported by conveyors to their respective process areas. Initial capital costs to develop oxide production are estimated at $88 million. An underground mine truck emerges from the portal of Lake Shore Gold's Bell Creek mine in northern Ontario. Lake Shore also owns the Timmins West mine in the same district. (Photo: Lake Shore Gold)