Lake Shore Gold Corp.
TSX : LSG

Lake Shore Gold Corp.

October 07, 2009 06:00 ET

Lake Shore Gold Releases Updated National Instrument 43-101 Report for Timmins Mine

TORONTO, ONTARIO--(Marketwire - Oct. 7, 2009) - Lake Shore Gold Corp. (TSX:LSG) ("Lake Shore Gold" or "the Company") today released results of a National Instrument 43-101 ("NI 43-101) technical report (the "Report") for the Timmins Mine Project (the "Project") as an update to the NI 43-101 technical report filed in October 2007 (the "2007 Report"). The Report was completed for incorporation by reference in a circular being mailed to shareholders of West Timmins Mining Inc. ("West Timmins") in connection with a shareholder vote on the proposed business combination between the two companies to be held on November 4, 2009. The Report is available on www.sedar.com.

Highlights of the Report are provided below.



-- Mineral reserves of 3.4 million tonnes at a grade of 7.52 grams per
tonne (812,000 ounces). Cutting factors of 50 grams and 30 grams were
applied and the updated reserve was determined based on historic
drilling with no exploration progress since 2007 included.
-- A 7.5 year mine life is assumed based on production capacity of 1,500
tonnes per day.
-- Peak annual production of 120,000 ounces is assumed based on cut grades
with a cash operating cost, at peak production, of US$322 per ounce.
-- Life of mine average operating costs, including during advanced
exploration, pre-production and production, of $95 per tonne with
numerous opportunities to optimize operating costs available but not
factored in the Report.
-- Additional capital of $33 million to be committed in 2010 to take the
Project to commercial production, with $29 million of sustaining capital
expected over the life of the Project. Capital expenditures referenced
in the Report include costs for both the Timmins Mine and the
refurbishment of the Bell Creek Mill.
-- Commercial production targeted for the fourth quarter of 2010.
-- An internal rate of return, based on the $62 million of capital expected
subsequent to the end of 2009, of 240% using a gold price of US$950 per
ounce and an exchange rate of 1.15 US$/C$.


Anthony (Tony) Makuch, President and CEO of Lake Shore Gold, commented: "The updated NI 43-101 technical report was completed over a short time frame as a requirement for the circular being mailed to West Timmins shareholders. Many opportunities for value optimization and cost reduction exist and will be evaluated going forward. Having said that, our remaining capital requirement for the Project in 2010 is in line with expectations, with low operating costs and opportunities for further reductions. We will also continue our aggressive exploration program to increase our mineral reserves, expand the Project's life and enhance our economic returns. We also plan to move forward as expeditiously as possible with Thunder Creek, which provides significant value potential and will benefit from the Timmins Mine infrastructure, and continue to make very good progress both with surface drilling and our underground exploration program at our Bell Creek Complex."

About Lake Shore Gold Corp.

Lake Shore Gold is a mineral development and exploration company that is moving towards gold production through its 100%-owned Timmins Mine project, where the Company is sinking a shaft and driving a ramp. The wholly owned 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 have the potential to become the Company's second mining project in the Timmins Camp. In addition, Lake Shore Gold is pursuing a number of other highly prospective exploration properties in Northern Ontario and Quebec, including its 60% owned Thunder Creek joint venture property and its Casa Berardi optioned property, which it is exploring through a joint venture agreement with Aurizon Mines Ltd. Lake Shore Gold's common shares trade on the TSX under the symbol LSG.

On August 27, 2009, Lake Shore Gold and West Timmins announced an agreement for a business combination under which Lake Shore Gold would acquire all outstanding West Timmins common shares at an exchange ratio of 0.73 of a Lake Shore Gold share for every West Timmins common share. As a result of the proposed transaction, Lake Shore Gold would acquire the 40% of Thunder Creek not currently owned and approximately 120 square kilometers of highly prospective property in close proximity to Thunder Creek, as well as a significant land position in Mexico. Subject to the approval of West Timmins shareholders and the satisfaction of other conditions, the transaction is expected to close in November.

Forward-looking Statements

Certain statements in this press release relating to the Company's development projects, exploration properties, project expenditures, business plans, production schedules, capital position and financial performance 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.

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