Tahoe bets big on Lake Shore Gold: production set to increase to 250,000 ounces per year.

• Author: Franczyk, Walter
• Position: TIMMINS

The ink was barely dry on the deal to combine Tahoe Resources with Lake Shore Gold Corp. when company officials outlined plans to boost gold production in Timmins.

Tony Makuch, then-president of Tahoe's Canadian operations, as well as Tahoe executive chair Kevin McArthur and Tahoe president and COO Ron Clayton, spoke in Timmins about their goal to increase gold production at the Lake Shore Gold Division from about 180,000 ounces of gold to 250,000 in four years.

"That's going to be achieved through a number of growth projects," said Mark Utting, Tahoe's vice-president of investor relations.

Combining the assets and resources of two strong mining companies to create an even stronger entity enables growth to move faster, he predicts.

At the company's Bell Creek Mine, northeast of Timmins, where Lake Shore produced about 40,000 ounces of gold last year, Tahoe intends to recommission and sink the currently unused shaft from a depth of 290 metres to well below 1,000 metres.

"Maybe as deep as 1,400, but we have to determine that exactly," Utting said. "That's going to give us access to a very large resource at depth and ... the potential to double production," he said.

South of Bell Creek, in a joint venture with Goldcorp Inc., the company is the exploration operator on the Whitney Project, an area of former producing gold mines, including the high-grade Hallnor Mine.

Over 30,000 metres of diamond drilling has yielded very encouraging results.

"We're looking at the model of developing an open pit that would eventually transition to underground mining," Utting said. "That's another thing that we're aggressively working on."

Near the Timmins West Mine, 18 kilometres southwest of the city centre, Lake Shore is conducting development work on the 144 Gap Zone, where it spent $25 million exploring a thick, high-grade gold deposit first discovered in 2013. The company expects to begin test stoping in the second half of this year.

"We've already drifted into it from our underground inffastructure at Thunder Creek," said Utting.

"We're developing a second drift over there now. We'll be able to produce from the 144 Gap deposit using our infrastructure. In fact, we're going to truck the ore right back through Thunder Creek over to the Timmins Deposit, where our shaft is, and bring it up the Timmins West Mine shaft."

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Utting expects the 144 Gap Zone to significantly extend mine life at Timmins West.

Company officials see the potential...