Lake Shore Gold Corp.

Lake Shore Gold Corp.

March 30, 2007 08:00 ET

Lake Shore and Goldcorp Agree to Extension of Due Diligence On Bell Creek Acquisition

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - March 30, 2007) - Lake Shore Gold Corp. (TSX:LSG) ("Lake Shore" or "the Company") and Goldcorp Canada Ltd., manager of the Porcupine Joint Venture (the "PJV"), have agreed to amend their binding letter agreement to extend the due diligence period on the acquisition by Lake Shore of the Bell Creek mine and mill until the close of business in Toronto on April 20, 2007.

On January 31, Lake Shore entered into a binding letter agreement with Goldcorp to acquire the Bell Creek mine and mill from the PJV. The acquisition includes the mine property, a hoist, headframe and underground mine infrastructure, a 1,500 tonne per day mill with permitted tailings facilities, plus all surface infrastructure, including office buildings and road and hydro access easements, and the assumption of all related environmental and rehabilitation liabilities by Lake Shore. The original 60-day due diligence period has been extended to provide additional time for the transmission of all information and documentation.

Lake Shore President and CEO Brian Booth said: "The due diligence process is going well; however we realize now that the process, including the exchange of information, will take longer than 60 days to complete. The acquisition will allow Lake Shore to quickly transform itself from a junior exploration company into a gold producer in the prolific Timmins gold mining district."

Consideration for the acquisition will consist of $6 million in cash and up to $4 million worth of Lake Shore common shares at a price of $1.51 per share, as well as two million warrants exercisable for a period of two years at $2.41 per share. In addition, Lake Shore and Goldcorp are negotiating the grant to PJV of a royalty equal to 2% of the net smelter returns on the Bell Creek property, subject to underlying royalties.

Lake Shore and the PJV are negotiating the terms of a definitive purchase agreement. Timing of the completion of the transaction is subject to completion of the definitive agreement as well as receipt of regulatory and third party approvals.

About Lake Shore

Lake Shore is a mineral exploration company engaged in the acquisition and exploration of mineral properties with prospects for hosting gold deposits. The Company is currently active in eastern Canada and holds a number of mineral resource properties in Ontario, including the Timmins West and Vogel/Schumacher projects, either directly or through option agreements. In February 2007 Lake Shore announced its agreement to acquire the Bell Creek mine and mill complex near Timmins, Ontario from the Porcupine Joint Venture. Lake Shore is a reporting issuer in British Columbia, Alberta, Manitoba, Ontario and Quebec, and trades on the Toronto Stock Exchange under the symbol LSG.

Forward-looking Statements

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 statements.

Contact Information

  • Lake Shore Gold Corp.
    Meghan Brown
    Manager Investor Relations
    (604) 669-3533
    (604) 688-5175 (FAX)
    Lake Shore Gold Corp.
    Brian R. Booth
    (705) 525-0992
    (705) 525-7701 (FAX)