Lake Shore Gold to double gold resource over next 12 months

Lake Shore Gold to double gold resource over next 12 months
One of the Junior miner's top executives said Wednesday, the miner is aiming to producer about 300,000 ounces of gold per year by 2013
Author: Euan Rocha (Reuters)
Posted:  Wednesday , 09 Mar 2011  
Lake Shore Gold (LSG.TO) expects to double the size of its gold resource over the next 12 months and aims to produce about 300,000 ounces a year of gold by 2013, said one of the junior miner's top executives on Tuesday.
"We don't think it's unreasonable to think that we may have found a new century of gold mining in a century-old mining camp," said Mark Utting, Lake Shore's head of investor relations.
He was referring to the long gold mining heritage of the Timmins district in northern Ontario, where most of the company's assets are located.
Timmins was founded in the early 1900s following gold discoveries in the Porcupine Camp located east of the city and the region's economy has since been closely tied to the vagaries of the mining sector.
Utting, who was attending the PDAC mining convention in Toronto, said the company also expects its production costs to decrease from over $575 an ounce this year to around $400 over the next three years.
"The lower costs are a function of increased scale and there are certain things that we can optimize, like ore handling," Utting told Reuters in an interview, after speaking to a group of investors and miners at the conference.
Shares of the company, which closed at C$4.28 on Tuesday, have risen 70 percent over the last 12 months as the company began commercial production at its Timmins mine, while increasing the size of its resources.
Toronto-based Lake Shore has also benefited from the surge in the price of gold, which recently touched an all-time-high of $1,444.40 an ounce XAU= as political turmoil in the Middle East and North Africa accelerated a flight to safety by investors.
Utting said the company now plans to double the size of its gold resource over he next 12 months to about 6 million ounces in all categories. It expects to outline the size of its Thunder Creek project, while expanding the size of its resources at other sites.
Earlier this year, the company announced plans to nearly triple the size of its gold production from its Bell Creek mill in 2011 to 125,000 ounces, as output from Timmins expands.
Aiming to produce 300,000 ounces by 2013, the company is studying ways to expand the capacity at its Bell Creek Mill.
Utting said Lake Shore plans to expand its mill capacity in a phased manner to 5,500 tonnes a day by early 2013, from its current capacity of 2,000 tonnes.
"We are (also) working on and doing the permitting to build a new mill on the west side of Timmins," said Utting, adding that this move would allow the company to eventually tap output from its other projects within the Timmins area.
Utting said the company is seeing positive results from its ongoing drill programs at its Bell Creek and Thunder Creek properties.
"We expect to announce a first resource at Thunder Creek, of something in the range of 1 million to 1.5 million ounces," he said. (Additional reporting by Atsuko Kitayama; Editing by Frank McGurty)