Lake Shore Gold Corp.
TSX : LSG

Lake Shore Gold Corp.

December 17, 2009 16:55 ET

Lake Shore Gold Completes Acquisition of "Bell Creek West" Properties

TORONTO, ONTARIO--(Marketwire - Dec. 17, 2009) - Lake Shore Gold Corp. (TSX:LSG) ("Lake Shore Gold" or the "Company") today reported that the Company has completed the previously announced agreement with Goldcorp Canada Ltd. ("Goldcorp"), manager of the Porcupine Gold Mines Joint Venture ("PJV"), and Goldcorp Inc., for the purchase of approximately 28 square kilometers of prospective exploration property (the "Bell Creek West" properties) in the surrounding vicinity of Lake Shore Gold's 100% owned Bell Creek Complex (See Figure 1). The properties, which range from a project with historic resources, the Marlhill Mine, to early stage exploration targets, are all located along the New Mine Trend, host of the PJV's Hoyle Pond Mine and Pamour operations.

Tony Makuch, President and Chief Executive Officer of Lake Shore Gold, commented: "The Bell Creek West acquisition provides us with a number of new, high-potential targets along the same geological trend as our Bell Creek Complex, all within close proximity to our Bell Creek shaft and the ramp we are driving from Bell Creek to Schumacher and Vogel. In addition, the land we have acquired around Bell Creek will also support our expansion plans for the Bell Creek Mill."

Consideration for the transaction totals $20 million, including $15 million of cash and 1,596,023 Lake Shore Gold common shares. The PJV has obtained a 2% net smelter royalty relating to any future production from the acquired properties. In addition to the 1,596,023 shares of the Company received by Goldcorp through the Bell Creek West transaction, Goldcorp has also exercised warrants with a strike price of $2.41 per share to acquire 2,000,000 common shares of the Company. The warrants had a two year term and were issued to Goldcorp on December 18, 2007 as partial consideration for the sale of the Bell Creek Mine and Mill to Lake Shore Gold. Proceeds to the Company from the exercise of the warrants were $4.8 million.

Lake Shore Gold's Bell Creek Complex is a highly prospective land package comprised of the Bell Creek Mine and Mill as well as the Schumacher and Vogel properties. The Company has completed approximately 52,000 metres ("m") of surface drilling at the Bell Creek Complex in 2009 and is advancing an underground advanced exploration program. Recent exploration results at Bell Creek have extended gold mineralization to a plunge length of 1,250 m and included intercepts of 12.63 grams per tonne ("gpt") over 11.65 m, 12.67 gpt over 14.40 m, and 5.13 gpt over 26.40 m.

About Lake Shore Gold

Lake Shore Gold is a rapidly growing mining company with large land positions on the west and east sides of the Timmins Gold Camp. The Company is carrying out an underground advanced exploration program at its 100%-owned Timmins Mine project, where it has both a shaft and a ramp, and recently commenced advanced exploration work at the adjacent Thunder Creek property. The Bell Creek Mill, located on the east side of Timmins, has been refurbished to a capacity of 1,500 tonnes per day. The Company is also making progress with an underground advanced exploration program at its Bell Creek Complex, including the Bell Creek Mine, Schumacher and Vogel properties, which is moving forward to become the Company's second mining operation in the Timmins Camp. The Company continues to invest aggressively in exploration primarily in Timmins and in select other areas of Northern Ontario and Quebec, and also owns a large land position in Mexico. The Company's common shares trade on the TSX under the symbol LSG.

Forward-looking Statements

Certain statements in this press release relating to the Company's exploration activities and development and business plans, are "forward-looking statements" within the meaning of securities legislation. The Company does not intend, and does not assume any obligation, to update these forward-looking statements. These forward-looking statements represent management's best judgment based on current facts and assumptions that management considers reasonable, including that operating and capital plans will not be disrupted by issues such as mechanical failure, unavailability of parts, labour disturbances, interruption in transportation or utilities, or adverse weather conditions, that there are no material unanticipated variations in budgeted costs, that contractors will complete projects according to schedule, and that actual mineralization on properties will not be less than identified mineral reserves. The Company makes no representation that reasonable business people in possession of the same information would reach the same conclusions. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In particular, fluctuations in the price of gold or in currency markets could prevent the Company from achieving its targets. Readers should not place undue reliance on forward-looking statements. More information about risks and uncertainties affecting the Company and its business is available in Lake Shore Gold's most recent Annual Information Form and other regulatory filings which are posted on sedar at www.sedar.com.

There is no guarantee that drill results discussed in this news release will lead to the identification of a deposit that can be mined economically, and further work is required to identify National Instrument 43-101 reserves or resources.

To view Figure 1, please visit the following link: http://media3.marketwire.com/docs/LSG1217f1.pdf

Contact Information

  • Lake Shore Gold
    Tony Makuch
    President & CEO
    (416) 703-6298
    info@lsgold.com
    or
    Lake Shore Gold
    Mark Utting
    Vice-President, Investor Relations
    (416) 703-6298
    info@lsgold.com