UPDATE 1-Lake Shore outlines drill results from Bell Creek
* Results suggest potential to increase size of resource
* Mineralization extends 400 meters below current resource
TORONTO Aug 16 (Reuters) - Lake Shore Gold Corp (LSG.TO) said the latest drilling results from its Bell Creek mine in northern Ontario indicate gold mineralization at the site extends 400 meters below its current resource.
Toronto-based Lake Shore said the new drill holes were aimed at expanding the size of its resource, converting some of its inferred resource into the indicated category and assisting with the completion of mining studies for the project.
"The results being announced today raise our confidence even higher and highlight the potential of Bell Creek," Chief Executive Tony Makuch said in a statement. "Continued progress in establishing and upgrading resources is critical to our ongoing mine study for Bell Creek, which we are targeting for completion by mid-2012."
Lake Shore said the latest batch of drill results suggest strong potential to increase the size of its resource at the Bell Creek complex.
The complex includes the Bell Creek mine and mill as well as the adjoining Vogel and Schumacher properties.
The company, which aims to become a mid-tier gold miner, owns a number of properties in northern Ontario and Quebec as well as a large land position in Mexico.
Despite a surge in the price of gold this year, shares of Lake Shore have fallen more than 50 percent, after the company cut its 2011 production forecast and pushed back the timing of its Bell Creek mill expansion. [ID:nL3E7IK2UD]
Lake Shore acquired the 1,500 tonne per day Bell Creek mill, along with the Bell Creek mine, from Porcupine Gold Mines, a joint venture between Goldcorp (G.TO) and Kinross Gold (K.TO), in December 2007.
The mill and mine were previously operated from 1986 to 1991 and during that period produced about 112,739 ounces of gold.
Shares of Lake Shore closed at C$1.95 on Monday on the Toronto Stock Exchange. (Reporting by Euan Rocha; editing by John Wallace)