Lake Shore Gold Corp.
TSX : LSG

Lake Shore Gold Corp.

February 23, 2009 08:24 ET

Lake Shore Gold Provides Corporate Update

- Timmins project advancing on schedule and budget - First production expected before end of March, 30,000 ounces targeted for 2009 - 2008 capital spending in line with $75.0 million budget

TORONTO, ONTARIO--(Marketwire - Feb. 23, 2009) - (Marketwire - February 23, 2009) - Lake Shore Gold Corp. (TSX:LSG) ("Lake Shore Gold" or "the Company") today provided an update on progress being achieved with its Timmins strategy, through which it expects to begin producing gold from pre-production development ore before the end of March 2009, and to achieve 30,000 ounces of gold production for the full year. The Company's Timmins strategy includes plans to provide ore to the 100% owned Bell Creek mill from up to four sources in the Timmins area over the next three years, including the Timmins project ramp, Timmins shaft, Bell Creek mine and Vogel property. By 2011, production is targeted to reach 200,000 ounces of gold. Production will initially come from the 100% owned Timmins project, where an advanced exploration program is currently progressing towards expected completion by the end of 2009.

Anthony (Tony) Makuch, President and CEO of Lake Shore Gold, commented: "Over the last year, Lake Shore Gold has successfully executed its work plans. As a result, we are now positioned to join the ranks of global gold producers and to achieve rapid production growth moving forward. I am particularly proud that we have met our targets and kept to schedules while also operating in line with our budgets, with our 2008 capital and exploration expenditures totaling approximately $75 million(1), consistent with the budget estimate we disclosed last May. We ended 2008 with approximately $85 million(1) of cash, not including about $5 million of restricted cash, and have taken the necessary steps to ensure we are funded to meet planned expenditures over the next two years, while also maintaining a strong corporate treasury."

Highlights of the Company's progress include:

- The Timmins shaft has been sunk 470 metres and is advancing at an average rate of about 3.4 metres per day. Completion of the fully concrete lined shaft to 710 metres, including completing shaft stations at the 200, 400, 525 and 650 Levels, is expected in the third quarter of 2009, with bulk sampling and underground diamond drilling scheduled for the fourth quarter.

- The Timmins ramp has advanced 530 metres, to about the 90 metre vertical level, and is advancing at an average rate of approximately 6.0 metres per day, with gold production from pre-production development ore expected to begin late next month. Based on progress to date, the Company expects the ramp to reach the 200 metre vertical level by the end of 2009.

- Refurbishing of the Bell Creek mill was completed to a capacity of 800 tonnes per day near the end of last year, with the first pouring of gold, approximately 25 ounces, taking place on December 31, 2008 as part of a test run of the processing circuit.

- Environmental permitting and engineering work are continuing at the Bell Creek Complex (including the Bell Creek mine and Schumacher and Vogel properties). Exploration work at Bell Creek in 2008 included reporting a total of 33 holes (23,000 metres) with results confirming that the pattern of high-grade gold lenses outlined during previous mining extends at least 600 metres below the existing mine workings (900 metres below surface) and cover a total strike length of over one kilometer. Results also indicate the potential for new mineralization immediately south of the mine that could be combined with existing resources and new indications at depth to expand total resources at the property and accelerate plans for mining.

- At the Company's 60% owned Thunder Creek property, immediately adjacent to its 100% owned Timmins project, the Company completed a total of 21 holes (10,425 metres) in 2008. The majority of holes, including the latest nine holes (4,000 metres) reported in December 2008, were focused on a 300 metre segment of the mafic-ultramafic contact surrounding the highly prospective Rusk Zone and were successful in extending the zone both down and up plunge. The deepest intercept from the new drilling is at a depth of 575 metres and suggests increased width and strike length for the zone, as well as an increased association of gold mineralization with porphyry, quartz veining and visible gold. The increased size of the zone and emergence of new mineralization styles suggest the potential to expand the Rusk Zone at depth and to identify additional new zones along strike.

In addition to the Company's Timmins projects and properties, Lake Shore Gold also reported encouraging exploration results at the Casa Berardi optioned property in 2008, where it has the option to acquire a 50% interest from Aurizon Mines Ltd. Results from 12 diamond drill holes (4,470 metres) and 79 reverse circulation holes were reported in October and included the discovery of a new gold zone at a vertical depth of less than 150 metres and covering a total strike length of at least 500 metres. The new zone is located 7.5 kilometers from Aurizon's Casa Berardi East Mine and Milling facility, and has the potential to become a satellite project providing feed to the mill.

Mr. Makuch added, "Looking to 2009, we remain on track to produce 30,000 ounces of gold, to complete the advanced exploration program at the Timmins project and commence pre-production development from the Timmins shaft around the beginning of 2010. We also plan to increase the capacity of the Bell Creek mill to 1,500 tonnes per day from 800 tonnes per day currently, to begin advanced exploration work at the Bell Creek Complex, and to move all of our key exploration targets forward."

View a photo of the Timmins shaft
http://media3.marketwire.com/docs/lsg223ph1.JPG

View a photo of the Timmins shaft 200 metre shaft station http://media3.marketwire.com/docs/lsg223ph2.JPG

View a photo of a jumbo working in the Timmins ramp http://media3.marketwire.com/docs/lsg223ph3.JPG

View a photo of the first gold pour during testing at the Bell Creek mill http://media3.marketwire.com/docs/lsg223ph4.JPG

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, which has a 1.2 million ounce reserve (uncut) and 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.

Qualified Persons

The Company's Qualified Persons ("QPs") (as defined in National Instrument 43-101, "Standards of Disclosure for Mineral Projects") for the Timmins project and Thunder Creek properties; Bell Creek, Schumacher and Vogel properties; and Casa Berardi optioned property are Jacques Samson, P. Geo., Richard Labine, P. Geo. and Eric Kallio, P. Geo., respectively. As QPs, Messrs. Samson, Labine and Kallio have prepared or supervised the preparation of the scientific or technical information for their respective properties as reviewed in this press release.

Note (1): Lake Shore Gold has not yet reported its 2008 financial results. All financial numbers for the year presented in this press release, including capital spending totals and cash resources at December 31, 2008, are estimates and are presented on an unaudited basis.

Contact Information