Lake Shore Gold Corp.
TSX : LSG

Lake Shore Gold Corp.

March 24, 2006 13:11 ET

Lake Shore Gold Corp. Board of Directors Approves Shareholder Rights Plan

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 24, 2006) - Lake Shore Gold Corp. (TSX:LSG) announced today that its board of directors has approved the adoption of a Shareholder Rights Plan (the "Rights Plan") for which shareholder approval will be sought at the Lake Shore annual and special meeting of shareholders to be held in May 2006.

The purpose of the Rights Plan is to provide shareholders and the Company's board of directors with adequate time to consider and evaluate any unsolicited bid made for Lake Shore, to provide the board with adequate time to identify, develop and negotiate value-enhancing alternatives, if considered appropriate to any such unsolicited bid, to encourage the fair treatment of shareholders in connection with any take-over bid for Lake Shore and to ensure that any proposed transaction is in the best interests of Lake Shore's shareholders.

By virtue of the implementation of the Rights Plan, anyone seeking to obtain control of the Company will be encouraged to negotiate with the board of directors prior to attempting a take-over, or to proceed by way of a Permitted Bid (as defined in the Rights Plan). Current Canadian legislation permits a hostile bid to be made in as little as 35 days, providing insufficient time for value-creating strategies to be implemented or competing bids to be made, whereas the Rights Plan as proposed would extend this time available to up to 60 days. Lake Shore is not aware of any pending or threatened take-over bid for the Company.

Effective March 21, 2006, one Right will be issued and attached to each outstanding Lake Shore common share. A separate rights certificate will not be issued, however, until such time as the Rights become exercisable (which is referred to as the "separation time"). The Rights will become exercisable only if an Acquiring Person, as defined in the Rights Plan, acquires 20% or more of the common shares of the Company, or an Acquiring Person announces an intention to make a take-over bid that would result in that Acquiring Person owning 20% or more of the outstanding common shares of the Company. Following such an acquisition, and unless the Acquiring Person makes a Permitted Bid, each Right held by a person other than the Acquiring Person would, upon exercise, entitle the holder to purchase that number of Lake Shore common shares which have a current market value equal to twice the exercise price payable for such common shares.

A Permitted Bid is defined in the Plan to mean a bid made pursuant to a take-over bid circular to all shareholders of the Company, which has a minimum deposit period of at least 60 days and pursuant to which not less than 50% of the common shares, other than those held by the Acquiring Person, are deposited and not withdrawn.

Lake Shore is a mineral exploration company with a strong treasury exploring for gold and base metals in the Archean Superior Province of Ontario and Quebec. See the Company's website at www.lsgold.com for further information on the Company's properties.

Forward-Looking Statement

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.
    Daniel G. Innes
    Director
    (604) 669-3533
    (604) 688-5175 (FAX)
    or
    Lake Shore Gold Corp.
    Thomas W. Beattie
    VP Corp. Development
    (604) 669-3533
    (604) 688-5175 (FAX)
    or
    Lake Shore Gold Corp.
    Brian R. Booth
    President
    (705) 525-0992
    (705) 525-7701 (FAX)
    info@lsgold.com
    www.lsgold.com