Tahoe bets big on Lake Shore Gold


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

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

Tony Makuch, President of Tahoe’s Canadian Operations, along with Tahoe Executive Chairman Kevin McArthur and Tahoe President and COO Ron Clayton, spoke to Timmins about their goal of increasing gold production from the Lake Shore Gold division from approximately 180,000 ounces of gold to 250,000 in four years.

“This is going to be achieved through a number of growth projects,” said Mark Utting, vice president of investor relations at Tahoe.

Combining the assets and resources of two strong mining companies to create an even stronger entity allows growth to go 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 return to service and dig the currently unused shaft of ‘a depth of 290 meters to well below 1,000 meters.

“Maybe as deep as 1,400, but we have to figure it out exactly,” Utting said. “This will give us access to a very large in-depth resource 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 of the Whitney project, an area of ​​former producing gold mines, including the high-grade Hallnor mine. More than 30,000 meters of diamond drilling have yielded very encouraging results.

“We are looking at the development model of a surface mine that would eventually transition to underground mining,” Utting said. “This is another thing that we are aggressively working on. “

Near the Timmins West mine, 18 kilometers southwest of downtown, Lake Shore is carrying out development work on the 144 Gap zone, where it has spent $ 25 million to explore a thick, high-grade gold deposit discovered for the first time in 2013. The company plans to start slaughter trials in the second half of this year.

“We’ve already infiltrated it from our underground infrastructure at Thunder Creek,” Utting said.

“We are developing a second drift there now. We will be able to produce from the 144 Gap deposit using our infrastructure. In fact, we’re going to truck the ore back through Thunder Creek to the Timmins deposit, where our shaft is, and bring it to the Timmins West mine shaft.

Utting expects the 144 Gap area to significantly extend the life of the mine in Timmins West.

Company officials see the potential to find multiple gold deposits along Trend 144, consistent with the experience of long-running, historic gold producers in Timmins.

“They continually found satellite deposits,” Utting said. “We’re very excited about this and we’re doing a lot of drilling there focused on showing the 144 deposit.”

Lake Shore Gold processes ore at its Bell Creek plant, which processed an average of 3,500 tonnes per day last year and just over 4,000 tonnes per day in December.

“We can probably produce 4,000 tonnes per day now, or a little more, without spending any money at all, but our crushing and grinding circuit is commissioned for 5,500 tonnes per day. With a very modest investment, we could bring the entire plant to this level of throughput, ”Utting said.

He attributes the successful acquisition of highly promising properties by Lake’s Shore to a disciplined and common sense approach.

“These are properties close to our infrastructure, so the economy of moving these properties forward is facilitated by us starting with the existing infrastructure,” Utting said.

The combination of Tahoe and Lake Shore Gold means continuity and sustainability of employment in Timmins. In addition to increasing gold production, Tahoe intends to increase resources and reserves from two to four million ounces by 2020.

“A lot of it is about extending the life of the mine and that means job durability,” Utting said.

As the business grows, there will be additional employment opportunities beyond the division’s current workforce of approximately 550 people.

Company staff are working hard on planned developments and expect project details to be submitted to the board for approval fairly quickly, Utting said. The actual fieldwork schedule will be part of the overall project proposal.

Tahoe also owns and operates the high-grade Escobar silver mine in Guatemala, the world’s third-largest silver producer. In 2015, the Escobar mine produced 20.4 million ounces of silver in concentrate at a cash cost of $ 6.16 per ounce. Its proven and probable reserves are estimated at 310 million ounces, enough for an 18-year lifespan.

In Peru, Tahoe’s surface and heap leach gold mine, La Arena, mined 174,073 ounces of gold at an average cash operating cost of $ 551 per ounce. The proven and probable reserves are estimated to contain 1.6 million ounces of gold.

30 kilometers north of La Arena, Tahoe’s Shahuindo Mine, another surface heap leach operation, is expected to produce 75,000 ounces of gold per year when it reaches commercial production this summer. Tahoe plans to eventually increase production to 170,000 ounces per year at this mine. Proven and probable reserves are set at 1.9 million ounces of gold and 24.5 million ounces of silver.

This story originally appeared in the June edition of the Sudbury Mining Solutions Journal.


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