The Timmins West property consists of a contiguous block of 23 claims and covers approximately 395 hectares.
The property has ore reserves totalling 3.6 million tonnes at 10.40 grams per tonne gold, containing 1.2 million ounces. A 2007 pre-feasibility study was based on a 1,000-tonne per day operation over an 11-year mine life.
The contract for sinking the 18-foot fully concrete lined shaft was awarded to Dumas Contracting and is scheduled for completion by mid-2009.
Lake Shore Gold acquired the Timmins West project in 2003 and has done more than 120,000 metres of diamond drilling on the property.
The company is also spending $3.7 million to refurbish the 1,500-tonne per day Bell Creek Mill, which it acquired from the Porcupine Joint Venture in December 2007.
The Lake Shore Gold treasury was fattened to the tune of $144.3 million this year as a result of two private placement transactions with Hochschild Mining Holdings Ltd.
“The $144.3 million received from Hochschild represents a major investment in Lake Shore Gold and follows extensive due diligence into the quality of our assets and the soundness of our plan to become Canada’s next intermediate gold producer,” said Tony Makuch, president and CEO. “The capital raised through the two Hochschild transactions benefits all shareholders as, in a time of volatile markets, Lake Shore Gold is now well funded to achieve its objective of rapidly moving into gold production…and continuing extensive exploration activities on all of our properties. We also have capital to support new joint ventures and acquisitions and are currently looking at a number of opportunities.”
Exploration agreements negotiated with the Flying Post First Nation and the Mattagami First Nation represent “an important step for maintaining and further developing our solid and mutually beneficial working relationships with both (communities),” said Makuch.
The company’s mining equipment fleet will include two six-yard load-haul-dump machines, a Rocket Boomer 282 jumbo and a 20-tonne truck from Atlas Copco, a scissor lift truck from MacLean Engineering and service vehicles from Industrial Fabrication of Sudbury.