Lake Shore Gold Corp.
TSX : LSG

Lake Shore Gold Corp.

June 17, 2008 16:52 ET

Lake Shore Gold Receives $144 Million From Hochschild Private Placement Transactions

TORONTO, ONTARIO--(Marketwire - June 17, 2008) - Lake Shore Gold Corp. (TSX:LSG) ("Lake Shore Gold" or "the Company") today announced that it has completed a second private placement transaction with Hochschild Mining Holdings Ltd. ("Hochschild"), involving the sale to Hochschild of 33,166,908 common shares of Lake Shore Gold at a price of $2.40 per share, for proceeds of $79.6 million. This transaction follows an earlier private placement transaction, completed in February 2008, which included the sale of 28,172,302 shares to Hochschild at a price of $2.30 per share for proceeds of $64.7 million. Hochschild has now invested a total of $144.3 million in Lake Shore Gold and owns 61,339,210 shares, representing 35% of issued and outstanding shares. Under a strategic alliance agreement between the two companies, Hochschild has a right to increase its ownership in the Company to 40%, on a fully diluted basis, through market and private agreement transactions, subject to securities laws, and has agreed to a standstill arrangement which limits its shareholdings to no more than 40%, on a fully diluted basis, until November 22, 2010.

Anthony (Tony) Makuch, President and CEO of Lake Shore Gold, commented: "The $144.3 million received from Hochschild represents a major investment in Lake Shore Gold and follows extensive due diligence into the quality of our assets and the soundness of our plan to become Canada's next intermediate gold producer. The capital raised through the two Hochschild transactions benefits all shareholders as, in a time of volatile markets, Lake Shore Gold is now well funded to achieve its objective of rapidly moving into gold production by refurbishing its 100%-owned Bell Creek mill, driving a ramp to shallow mineralization at Timmins West, with initial output from the ramp expected by early next year, completing the Timmins West shaft and advanced exploration program, to be followed by pre-production development, and continuing extensive exploration activities on all of our properties. We also have capital to support new joint ventures and acquisitions and are currently looking at a number of opportunities."

More information about the Hochschild private placement transactions is available in press releases dated February 19, 2008 and April 16, 2008 which are posted on the Company's website at www.lsgold.com.

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, is progressing with 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 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 materials 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 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. 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 regulatory filings which are posted on sedar at www.sedar.com.

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