March 4, 2011 / 2:27 PM / 6 years ago

UPDATE 2-Lake Shore encouraged by Thunder Creek drilling

2 Min Read

* Says results indicate high-grade gold sections

* Shares up 6.8 pct in early trade in Toronto (Adds background, details on share price move)

TORONTO, March 4 (Reuters) - Lake Shore Gold Corp LSG.TO said on Friday the latest drill results from its Thunder Creek project, located adjacent to its Timmins mine in northern Ontario, are promising.

The latest drill results indicate very wide intersections with high-grade gold sections from multiple directions, the company said. The announcement sent its shares up 6.8 percent to C$4.23 in early trade on the Toronto Stock Exchange.

"(The) results are very exciting as they provide confirmation that we are dealing with a very special gold deposit at Thunder Creek, which is already meeting and exceeding our original expectations in terms of size and grades," Chief Executive Tony Makuch said in a statement.

Earlier this year, the Canadian gold miner said it would nearly triple production in 2011, driven mainly by its Timmins mine. The company also said it plans to increase its exploration spending for the year.

Shares of Lake Shore Gold, which has a market capitalization of C$1.6 billion, have already risen more than 60 percent in the last 12 months.

$1=$0.97 Canadian Reporting by Euan Rocha, editing by Gerald E. McCormick and Peter Galloway

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