Lake Shore Gold Corp.
TSX : LSG

Lake Shore Gold Corp.

March 05, 2009 09:30 ET

Lake Shore Gold Announces Closing of Bought Deal Offering

TORONTO, ONTARIO--(Marketwire - March 5, 2009) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Lake Shore Gold Corp. (TSX:LSG) ("Lake Shore Gold" or the "Company") today announced the successful closing of the previously announced bought deal offering (the "Offering") of common shares and flow-through common shares of the Company. The Company has sold to a syndicate of underwriters co-led by Scotia Capital Inc. and Haywood Securities Inc. and including Wellington West Capital Markets Inc., Raymond James Ltd., TD Securities Inc. and Sandfire Securities Inc. (collectively, the "Underwriters"), 30,615,871 common shares (the "Common Shares") at $1.55 per Common Share and 6,616,185 flow-through common shares (the "Flow-Through Shares") at $2.00 per Flow-Through Share for gross proceeds of $60,686,970.

Anthony (Tony) Makuch, President and CEO of Lake Shore Gold, commented: "We are very pleased to have completed the Offering, with the proceeds received providing the financial flexibility to continue moving forward with our key development and exploration projects, while maintaining a strong balance sheet. We want to extend our thanks to the investors who participated in the Offering, to our underwriters and to all others who contributed to the successful completion of this financing."

The funds raised from the Offering will be used for underground rehab and development work at the Company's 100% owned Bell Creek mine and Vogel properties in support of an advanced underground exploration program, exploration expenditures at the Timmins, Thunder Creek, Casa Berardi and other exploration properties, and for general corporate purposes. The entire gross proceeds from the issuance of the Flow-Through Shares will be spent on "Canadian Exploration Expenditures" ("CEE") as defined in the Income Tax Act.

As part of the Offering, Hochschild Mining plc. ("Hochschild") purchased 14,892,822 common shares, representing 40% of the aggregate shares issued through the financing. Hochschild's interest in the Company remains at 40% on a fully diluted basis.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

About Lake Shore Gold

Lake Shore Gold Corp. is a mineral development and exploration company that is moving towards gold production through its 100%-owned Timmins project, where the Company is sinking a shaft and driving a ramp to access shallow mineralization. The Timmins project is located 18 kilometers west of Timmins, one of the world's most productive mining camps having produced approximately 75 million ounces of gold over the last century. The wholly owned Bell Creek mill, located just east of Timmins, has been refurbished to a capacity of 800 tonnes per day, and the Company is moving forward with a number of prospective exploration properties in the Timmins area and in other parts of Northern Ontario and Quebec. Lake Shore Gold's common shares trade on the Toronto Stock Exchange under the symbol LSG.

Forward-looking Statements

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

Contact Information

  • Lake Shore Gold Corp.
    Tony Makuch
    President & CEO
    (416) 703-6298
    (416) 703-7764 (FAX)
    Email: info@lsgold.com
    or
    Lake Shore Gold Corp.
    Mark Utting
    Vice-President, Investor Relations
    (416) 703-6298
    (416) 703-7764 (FAX)
    Email: info@lsgold.com
    Website: www.lsgold.com