Lake Shore Gold Corp.
TSX : LSG

Lake Shore Gold Corp.

November 13, 2007 17:00 ET

Lake Shore Reports Third Quarter Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Nov. 13, 2007) - Lake Shore Gold Corp. (TSX:LSG) ("Lake Shore" or "the Company") reports its financial results and exploration activities for the quarter ended September 30, 2007. The complete Management's Discussion and Analysis and Financial Statements will be available on the Company's website at www.lsgold.com and will be filed on SEDAR at www.sedar.com. All currency figures are in Canadian dollars unless otherwise noted.

Project Highlights

Timmins West

During the third quarter of 2007, Lake Shore incurred $4.5 million in exploration and development expenditures of which $3.1 million were spent on the 100%-owned Timmins West property near Timmins, Ontario. The pre-feasibility study ("PFS") for Timmins West was completed in August 2007 by SRK Consulting. The PFS reported that over 90% of the previously qualified available resources are now considered mineral reserves, and showed excellent economics for production starting as early as 2009 (For full details refer to Lake Shore's press release dated August 28, 2007, available on the Company's website at www.lsgold.com).

The Company's advanced underground exploration program at Timmins West is in progress with $2.1 million spent in the third quarter and $2.8 million in the first nine months of 2007. An exploration shaft is being sunk to a level that will provide a practical platform for in-fill drilling in the area of current resources and to explore the prospective areas outside the current resource envelope. Site preparation was completed and a hoist was purchased during the third quarter. A local mining contractor started the sink cut in September and is expected to complete the shaft collar concrete work by the end of the fourth quarter.

Thunder Creek

During the third quarter Lake Shore intersected additional new high-grade gold mineralization on the Thunder Creek property, which sits immediately adjacent to Timmins West. The character of the mineralization in the new gold zone is similar to the ultramafic zone that hosts the majority of the gold mineralization at Timmins West and opens up a whole new target for expansion of the Company's Timmins West resource base. Lake Shore plans to complete approximately 8,000 metres of diamond drilling on the Thunder Creek property in 2007, systematically testing the Rusk Zone and as well as other exploration targets on the property. At the end of the third quarter a total of 5,107 metres in nine holes had been completed. Lake Shore is earning a 60% interest pursuant to an option agreement with West Timmins Mining Inc. by spending $1.7 million over a five-year period ending in November 2008. At September 30, 2007, the Company had incurred approximately $1.6 million of the required expenditures.

Canopener

During the third quarter Lake Shore obtained positive results from its Canopener property in northwestern Ontario, a joint venture project with Superior Diamonds Inc. Positive gold grain data, including a significant number of pristine gold grains, were found during an overburden sampling program. The recovery of pristine gold grains implies that these grains have not moved very far in overburden soil cover and suggests a local bedrock source for the gold.

Casa Berardi

During the third quarter Lake Shore entered into a joint venture agreement with Aurizon Mines Ltd. ("Aurizon") covering a 30-kilometre strike length of the Casa Berardi deformation zone. Under the terms of the agreement, Lake Shore can earn up to 50% in exploration lands comprising 227 claims in an east and west block surrounding Aurizon's Casa Berardi Mine. Historical exploration data has been received and a detailed compilation will be conducted in the fourth quarter. A significant drilling program is planned for this project in the winter of 2008.

Financial Results

Lake Shore is not in commercial production on any of its resource properties and accordingly, it does not generate cash from operations and recorded a net income of $299,833 or $0.00 per share during the third quarter of 2007 compared with a net loss of $144,188 or $0.00 per share for the same period in 2006. For the nine months ended during the same periods, the net loss for 2007 and 2006 were $1,359,461 or $0.01 per share and $1,005,692 or $0.01 per share, respectively.

Cash used in operating activities during the three and nine-month periods ended September 30, 2007 was $779,366 (2006 - $308,183) and $1,660,673 (2006 - $1,105,289), respectively.

Cash used in exploration activities for the same three and nine-month periods totalled $4,149,421 (2006 - $2,235,892) and $10,158,559 (2006 - $7,574,892), respectively. For the nine-month period ended September 30, 2007, the Company incurred $2.8 million on advanced exploration, $ 1.3M on geology and $1.4 million on drilling the Timmins West property.

As at September 30, 2007 Lake Shore had $29,667,284 in cash. The Company does not have any asset-backed commercial paper and is thus unaffected by the financial market fluctuations in the US.

In management's view, Lake Shore currently has sufficient financial resources to fund planned exploration programs and ongoing operating expenditures. The Company will continue to be dependent on raising equity capital as required until it reaches production stage and generates cash flow from operations.

During the quarter ended September 30, 2007, the Company determined that its consolidated financial statements for the year ended December 31, 2006 contained an error related to the accounting for the tax impact of flow-through expenditures renounced during 2006. The required adjustment increased future income tax liability and reduced share capital by $875,000. Additionally, the Company identified an accounting presentation issue within shareholders' equity with respect to the tax impact of the renouncement of flow-through shares. As a result, the Company has reduced share capital by $1,789,500 and increased the deficit by the same amount for the year ended December 31, 2006. The correction of these items had no impact on the consolidated statements of net loss or of cash flows for the years ended December 31, 2006 and 2005. The Company will restate its December 31, 2006 audited financial statements and affected quarterly financial statements.

Outlook

Lake Shore is continuing to advance its key projects toward development decisions with completion of the pre-feasibility study and an advanced underground exploration program under way at Timmins West. On completion of the acquisition of the Bell Creek mine (see Lake shore's press release dated January 31, 2007, available on the Company's website at www.lsgold.com), management believes Lake Shore will quickly be able to transform itself from a junior exploration company into a gold producer and become a significant player in one of Canada's most prospective gold mining camps.

Additional Information

Additional information relating to the Company is provided in the Company's interim consolidated financial statements for the period ended September 30, 2007, audited consolidated financial statements for the year ended December 31, 2006, its Annual Information Form and Information Circular. These and other documents relating to the Company are available on SEDAR at www.sedar.com.

About Lake Shore

Lake Shore is a mineral exploration company engaged in the acquisition and exploration of mineral properties with prospects for hosting gold and base metal deposits. The Company is currently active in Canada and holds a number of mineral properties, either directly or through option agreements, in Ontario and Quebec. Lake Shore is a reporting issuer in British Columbia, Alberta, Manitoba, Ontario and Quebec, and trades on the Toronto Stock Exchange under the symbol LSG.

Forward-Looking Statements

Statements in this release that are forward-looking statements are subject to various risks and uncertainties concerning the specific factors disclosed under the heading "Risk Factors" and elsewhere in the Company's periodic filings with Canadian securities regulators. Such information contained herein represents management's best judgment as of the date hereof based on information currently available. The Company does not assume the obligation to update any forward-looking statement.

Contact Information

  • Lake Shore Gold Corp.
    Meghan Brown
    Manager, Investor Relations
    (604) 685-4644
    (604) 688-5175 (FAX)
    Email: mbrown@lsgold.com
    or
    Lake Shore Gold Corp.
    Brian R. Booth
    President and CEO
    (705) 525-0992
    (705) 525-7701 (FAX)
    Email: info@lsgold.com
    Website: www.lsgold.com