Lake Shore Gold to Acquire West Timmins

27 August 2009 (Last Updated August 27th, 2009 18:30)

Canada’s Lake Shore Gold is to acquire West Timmins Mining in a deal that values Timmins at about C$319m. Timmins shareholders will receive 0.73 of a Lake Shore share for every Timmins share held, gaining in total a 33% ownership in Lake Shore. The business combination will

Canada’s Lake Shore Gold is to acquire West Timmins Mining in a deal that values Timmins at about C$319m.

Timmins shareholders will receive 0.73 of a Lake Shore share for every Timmins share held, gaining in total a 33% ownership in Lake Shore.

The business combination will create the new large-scale, wholly-owned Timmins West Gold Mine Complex on the western Timmins mining trend, Lake Shore said.

Lake Shore CEO Tony Makuch said the deal is an important step towards building Canada's next mid-tier gold producer.

“Through this combination we are creating a dominant land position which covers about 130km2 along the Timmins gold structure west of the Mattagami River Fault, where the geologic setting is very similar to the geology of past producing mines in Timmins,” Makuch said.

The companies will consolidate the Thunder Creek and the Timmins Mine into one property, creating a wholly-owned mining complex, well beyond what was originally envisioned at the Timmins Mine, Makuch said.

“We can also potentially expedite production from Thunder Creek by at least three years, and realise significant synergies, through the use of the Timmins Mine infrastructure, permits, closure plans, management and workforce.”

On completion of the transaction, the companies plan to commence an aggressive underground advanced exploration program at Thunder Creek, and deepen the Timmins Mine shaft from 710m to 1,200 mts.