Lake Shore Gold Corp.

Lake Shore Gold Corp.

May 05, 2008 14:53 ET

Lake Shore Gold Comments on May 15, 2008 Shareholder Vote

TORONTO, ONTARIO--(Marketwire - May 5, 2008) - Lake Shore Gold Corp. (TSX:LSG) ("Lake Shore Gold" or "the Company") today commented on details of business to be conducted at its upcoming annual and special meeting of shareholders on May 15, 2008, at The National Club in Toronto.

At the May 15th meeting, in addition to conducting regular business including the election of directors, the appointment of auditors and providing a management presentation on the Company's progress, Lake Shore Gold shareholders are being asked to vote on three special business items:

- to terminate the Company's Shareholders' Rights Plan ("Rights Plan");

- to approve the issuance of common shares of the Company to Hochschild Mining Holdings Ltd. ("Hochschild"), which will result in Hochschild holding a minimum of 35% of issued and outstanding shares on a non-diluted basis and a maximum of 40% on a fully-diluted basis; and,

- to have the Company continued under and thereafter governed by the Canada Business Corporations Act ("CBCA") instead of the British Columbia Business Corporations Act.

In advance of the meeting, a Management Information Circular (the "Circular"), providing details of the business to be conducted at the annual and special meeting, and a Proxy Form (or, in the case of non-registered shareholders, a Voting Instruction Form), were mailed to shareholders, with the mailing having been completed by Thursday, April 24, 2008. Non-registered shareholders having not received their material should contact their securities broker and/or financial intermediary. The Circular is also available on SEDAR at Pursuant to the requirements of the Toronto Stock Exchange ("TSX") and the terms of the Rights Plan, the special business relating to the Rights Plan and issuance of shares to Hochschild must be approved by a majority of the votes cast by shareholders, excluding Hochschild, present in person, or represented by proxy, in order to be adopted. The motion for the continuance of the Company under the CBCA relates to the relocation of the Company's head office from Vancouver to Toronto and must be approved by two-thirds of all votes cast.

Details of the Hochschild transaction being voted on at the meeting, through which the Company could raise approximately $79.0 million from the sale of 32.9 million shares to Hochschild at $2.40 per share, are available in a press release issued by Lake Shore Gold on April 16, 2008. This proposed transaction follows an earlier private placement transaction, completed in February 2008 (the "February 2008 transaction"), through which Hochschild acquired 28.2 million shares of Lake Shore Gold at $2.30 per share, for total proceeds of approximately $64.7 million. Through this private placement, Hochschild assumed a 19.9% interest in the Company. Hochschild is not permitted to vote its existing 28.2 million shares with respect to the termination of the Rights Plan and the issuance of shares to Hochschild at the May 15th meeting. More information about the February 2008 transaction is available in a press release issued by the Company on February 25, 2008.

Anthony (Tony) Makuch, President and CEO of Lake Shore Gold, commented: "We want to make sure that shareholders fully understand the process leading up to the May 15th vote and the special business resolutions being voted upon. The special business involving the Rights Plan and the Hochschild transaction both relate to a strategic alliance agreement with Hochschild, as part of which we agreed to seek shareholder approval to terminate the Rights Plan to enable Hochschild to acquire shares, to a maximum of 40% of issued and outstanding shares on a fully-diluted basis, that would otherwise be restricted under the Rights Plan. Lake Shore Gold's Board of Directors has unanimously recommended that shareholders vote for these special business items, recognizing that the approximately $79.0 million of capital to be raised through the proposed transaction, together with the $64.7 million raised from the first private placement, will provide the capital required to rapidly advance our Timmins West mine project towards production by early next year, to re-commission our 100%-owned Bell Creek mill, and to significantly advance our other projects in the Timmins area, all in support of our goal of becoming Canada's next intermediate gold producer.

About Lake Shore

Lake Shore Gold Corp. is a mineral development and exploration company that is rapidly moving towards gold production through a portfolio which includes an existing processing facility and a number of quality mineral properties located in the Timmins gold mining district of northern Ontario and Quebec. The Company has completed a pre-feasibility study and is moving forward with an advanced exploration program at its Timmins West property, has begun re-commissioning work at its 100%-owned Bell Creek mill and is continuing drilling programs at a number of other prospective properties. The Company'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 annual and special meeting on May 15, 2008, Hochschild's investment in Lake Shore Gold and the advancement and development of the Company's projects, 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 demand for products develops as anticipated, that operating and capital plans will not be disrupted by issues such as mechanical failure, unavailability of parts and supplies, labour disturbances, interruption in transportation or utilities, or adverse weather conditions, and that there are no material unanticipated variations in the cost of energy or supplies. The Company makes no representation that reasonable business people in possession of the same information would reach the same conclusions.

Forward-looking statements include, but are not limited to, statements with respect to the future price of gold and other metals, the estimation of mineral resources, the realization of mineral resource estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, timing of completion of pre-feasibility studies, success of exploration and development activities, permitting time lines, currency fluctuations, requirements for additional capital, government regulation of exploration operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, completion of acquisitions and their potential impact on the Company and its operations, limitations on insurance coverage and the timing and possible outcome of pending litigation. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".

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. Such factors include, among others, risks related to the completion and integration of acquisitions and actual effects of the acquisitions; risks related to joint venture operations; actual results of current exploration activities; actual results of current reclamation activities; conclusions of future economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold and other metals; possible variations in ore resources, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; as well as those factors discussed in the section entitled "Risk Factors" in the Company's Annual Information Form filed with Canadian provincial securities regulatory authorities. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

Contact Information

  • Lake Shore Gold
    Tony Makuch
    President & CEO
    (416) 703-6298
    Lake Shore Gold
    Mark Utting
    Vice-President, Investor Relations
    (416) 703-6298
    (416) 703-7764 (FAX)