June 24, 2009 / 3:10 PM / 9 years ago

Drill results boost Lake Shore, West Timmins stock

* Lake Shore shares up 23 pct, West Timmins up 43 pct

* Companies find broad vein of high-grade ore at JV site

By Euan Rocha

TORONTO, June 24 (Reuters) - Shares of gold miners Lake Shore Gold Corp LSG.TO and West Timmins Mining Inc WTM.TO jumped sharply on Wednesday, after announcing positive drill results at their Thunder Creek joint venture property.

Lake Shore owns a 60 percent interest in the Thunder Creek property, and is the operator of the joint venture. West Timmins Mining owns the remaining 40 percent.

The Thunder Creek property is immediately adjacent to Lake Shore Gold’s 100 percent-owned Timmins Mine project.

Lake Shore shares jumped 23 percent to C$3 on the Toronto Stock Exchange Wednesday morning, while West Timmins was up 43 percent at C$1.46, after the companies said they had intersected a very broad vein of high-grade ore at Thunder Creek.

“The find is just 800 metres (2,625 feet) from Lake Shore’s shaft at the Timmins mine, so it could be put into production fairly rapidly,” said M Partners analyst Tara Hassan.

Lake Shore recently started processing development ore from the Timmins site and expects to produce 30,000 ounces of gold this year. The company is 40 percent owned by British-based precious metals producer Hochschild Mining (HOCM.L).

“Investors are very excited about the potentially increased production for Lake Shore in 2011 and 2012. As for West Timmins, this is great win for an exploration company,” said Hassan.

He sees West Timmins as an interesting takeover target for larger gold companies, given the encouraging results that continue to come out of its properties.

On Thursday, West Timmins said its board has adopted a shareholder rights plan, effective immediately, but subject to ratification by shareholders.

A shareholder rights plan gives a company’s board adequate time to consider and evaluate any unsolicited bid. However, West Timmins said its plan is not being adopted in response to any specific effort to acquire control of the company. (Reporting by Euan Rocha; editing by Rob Wilson)

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