Lake Shore Gold acquired Bell Creek Mill, along with the Bell Creek Mine, from the Porcupine Gold Mines Joint Venture, a joint venture between Goldcorp Canada Ltd. and Kinross Gold Corporation, in December 2007. The Mill and Mine were previously operated from 1986 to 1991 and, over this period, produced approximately 112,739 ounces of gold.

The Bell Creek mill is a conventional gold mill circuit, involving crushing and grinding, gravity and leaching, followed by a “Carbon-In-Pulp” (“CIP”) process for gold recovery. The mill also includes associated buildings and surface infrastructure, offices and an approved tailings area. The facility had been on care and maintenance since 2002. Refurbishing of the mill was completed at a capital cost, and on a schedule, significantly less than would be expected for the construction of a new greenfield facility. At the beginning of 2009, the mill had been refurbished with an initial capacity of 800 tonnes per day and was refurbished to a capacity of 1,500 tonnes per day near the end of the third quarter of 2009. The Mill was expanded in 2010 to a capacity of 2,000 tonnes per day. Commissioning of the expansion commenced on October 12 and extended throughout the remainder of the year.

During 2011, the mill processed 671,467 tonnes at an average grade of 4.03 gpt for 83,585 ounces. During the fourth quarter 2011 the mill process 186,231 tonnes (2,024 tonnes per day) at an average grade of 4.34 gpt.

On August 9, 2011, the Company announced a capital project for the expansion of the Bell Creek Mill to a capacity of 3,000 tonnes per day. The total cost of the project was estimated at approximately $83 million, of which $67 million is expected to be spent in 2012.  The expansion is expected to be completed by late 2012. The expansion mainly involves the crushing and grinding circuits of the milling process.  The scope of the expansion project facilitates the potential to rapidly expand again during a contemplated Phase 2 to a capacity of 5,500 tonnes per day, which would mainly involve enhancements to the back half of the milling process and be considerably less costly then Phase 1. The decision to undertake the second phase of expansion will follow completion of the first and be linked to the continued development of the Company’s projects.

Photos below: 1. Shells from the new SAG Mill (acquired as part of the expansion of Bell Creek Mill) arriving in Timmins on November 1, 2011. 2. A computer-generated image of the Bell Creek Mill expanded to 5,500 tpd.

Bell Creek Mill Expansion (Diagram of expanded mill – to 5,500 tpd)