Lake Shore Gold Corp. (TSE:LSG) (PINK:LSGGF) stock performance continues to favor the bears after the company lowered their production guidance for 2011.
LSG stock lost another 20% yesterday on persistently strong trading activity. The share price first tanked yesterday after the company released production results for the second quarter of the year and revised their guidance for whole 2011.
Lake Shore ran into some trouble with the mining sequence which resulted in advancement of lower grade sources.
Subsequently the head grade reached only 60% of the plan. These changes will affect further mining as well.
During the quarter the company also milled low grade stockpiles from Bell Creek Mine which were obtained during exploration program, which adversely affected the overall grades and production reported for the quarter.
Such drop in ore quality also had a negative effect on the costs. The company expects their financial results to show significant increase in Q2 expenses. The results are due to be published on August 9, 2011.
Lake Shore revised their target production estimate down 32% to 85 thousand ounces of gold.
Share price already passed below the last somewhat strong support at $2.5 and is now free to tumble down until $1.5. Of course this is the worst case scenario – traders are more likely to see it enter consolidation somewhere around the psychologically sound 2 dollars per share.
