Third quater conferance call
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1) Lake Shore Gold produced 18,833 ounces of gold in Q3 and is on track to meet its 2011 target of 85,000 ounces. 2) Cost performance was strong in Q3 with cash costs of $94 per tonne or $884 per ounce. 3) The company continues to advance five deposits that could each contain over one million ounces of gold: Timmins, Thunder Creek, Bell Creek, Thorne, and Fenn-Gib. 4) Lake Shore Gold expects to significantly grow its resource base by the end of 2011 with initial resource estimates from Thunder Creek and Fenn-Gib.
Third quater conferance call
- 1. T h i r d Q u a r t e r 2 0 11 Conference Call and Webcast N o v e m b e r 1 0 , 2 0 11 Making Progress, Realizing Our Potential
- 2. Forward Looking Statements Certain statements in this presentation relating to the Company s expected production levels, production growth, exploration activities, potential for Company's increasing resources, project expenditures and business plans are "forward-looking statements" or "forward-looking information" within the meaning of certain securities laws, including under the provisions of Canadian provincial securities laws and under the United States Private Securities Litigation Reform Act of 1995 and are referred to herein as "forward-looking statements." 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 , y p , , p p , 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 be consistent with models and 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, delays in development or mining and fluctuations in the price of gold or in currency markets could prevent the Company p y p g p g y p p y 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 the Company's most recent Annual Information Form and other regulatory filings with the Canadian Securities Administrators, which are posted on sedar at www.sedar.com, or the Company’s most recent Annual Report on Form 40-F and other regulatory filings with the Securities and Exchange Commission. QUALITY CONTROL Lake Shore Gold has a quality control program to ensure best practices in the sampling and analysis of drill core. A total of three Quality Control samples consisting of 1 blank, 1 certified standard and 1 reject duplicate are inserted into groups of 20 drill core samples. The blanks and the certified standards are checked to be within acceptable limits prior to being accepted into the GEMS SQL database. Routine assays have been completed using a standard fire assay with a 30-gram aliquot. For samples that return a value greater than three grams per tonne gold on exploration projects and greater than 10 gpt at the Timmins mine and Thunder Creek underground project, the remaining pulp is taken and fire assayed with a gravimetric finish. Select zones with visible gold are typically tested by pulp metallic analysis on some projects. NQ size drill core is saw cut and half the drill core is sampled in standard intervals. The remaining half of the core is stored in a secure location. The drill core is transported in security-sealed bags for preparation at ALS Chemex Prep Lab located in Timmins, Ontario, and the pulps shipped to ALS Chemex Assay Laboratory in Vancouver, B.C. ALS Chemex is an ISO 9001-2000 registered laboratory preparing for ISO 17025 certification. QUALIFIED PERSON The Company’s Qualified Persons (“QPs”) (as defined in National Instrument 43-101, “Standards of Disclosure for Mineral Projects”) for diamond drilling projects at the Timmins deposit surface; Thunder Creek, Gold River Trend and 144 properties; Bell Creek Mine; and Casa Berardi optioned property are Jacques Samson, P.Geo., Stephen Conquer, P.Geo, and Keith Green, respectively. Dean Crick, P.Geo. is the QP for the Timmins deposit and Thunder q , , p q , , , p y , p Creek underground drilling projects, and Bob Kusins, P.Geo., is the QP for resource estimation at all of the Company’s properties. As QPs, Messrs. Samson, Conquer, Green, Crick and Kusins have prepared or supervised the preparation of the scientific or technical information for their respective properties as provided in this presentation. Messrs., Samson, Conquer, Kusins, Crick and Green are employees of the Company. 2
- 3. Lake Shore Gold (LSG:TSX & NYSE Amex) Good Progress in Third Quarter & Nine Months 2011 18,833 ounces recovered in Q3 18 833 ounces recovered in Q3 60,014 ounces poured YTD, poised to achieve 2011 target* Strong cost performance in Q3, cash costs of $94/tonne, US$884/ounce Mill throughput levels meeting and exceeding target levels 1,890 tpd for Q3 – over 2,000 tpd in September Continued exploration success *Examples of Forward Looking Statements. 3
- 4. Lake Shore Gold (LSG:TSX & NYSE Amex) Advancing five potential multi‐million ounce deposits 1. Timmins Mine – Q3/11 production increased 24% from Q2, grades in Q / p Q ,g UM1 reconciled well Deep hole outlines incredible depth potential of Timmins deposit 2. Thunder Creek – First resource estimate on track for release in Q4* 2 Th d C k Fi t ti t t kf l i Q4* 3. Bell Creek Mine – Continued exploration success, working to demonstrate resource potential 4. Thorne deposit (Gold River Trend) – Mineralization extended 450 metres to depth and 300 metres along strike, updated NI 43‐101 resource in Q1/12 resource in Q1/12* 5. Fenn‐Gib – Drilling confirms geological model and extends mineralization b l db f d* First resource to be released before year end* Potential long‐life open pit *Examples of Forward Looking Statements. 4
- 5. Lake Shore Gold (LSG:TSX & NYSE Amex) Outlook 2011 production to reach at least 85,000 ounces poured 2011 production to reach at least 85 000 ounces poured* Head grades, cash operating costs and mill throughput in Q / Q4/11 all expected to improve* p p Significant growth in resources by year end* o Initial resources from Thunder Creek and Fenn-Gib o To at least double resource base by March 2012 Continue drilling for additional discoveries and strike extensions *Examples of Forward Looking Statements. 5
- 6. 2011 Financial Performance Q3/11 9 Mo. 2011 Gold sold (oz) 16,570 69,512 Average price (US$/oz) $/ 1,726 1,501 Proceeds from gold sales ($M) 28.1 102.4 Proceeds from commercial gold sales ($M) 18.8 51.5 Cash operating costs (US$/oz) per tonne 94 96 per ounce 884 845 Cash earnings from operations $ millions 9.1 23.0 $ per share $ h 0.02 0 02 0.06 0 06 Net loss $ million 5.2 5.4 $ per share $p 0.01 0.01 6
- 7. Financial Position and Capital Structure Shares Outstanding (Basic) 400,146,669 Shares Outstanding (Fully diluted) 418,145,521 Share Price (Nov. 4/11) $1.72 Market Capitalization $688,000,000 Cash & Equivalents (Sept. 30, 2011) $47,600,000 Revolving Credit Facility ‐ Drawn $20,000,000 Available Available $30,000,000 $30 000 000 Gold Hedging None 7
- 8. Planned Expenditures Projected 9M/11 Full Year Projects P j t 71.1 71 1 85.0 85 0 Exploration 24.5 30.0 Mill Expansion Mill Expansion 12.7 20.0 25.0 20.0‐25.0 Total 108.3 135.0‐140.0 Expenditures for 2011 expected to be consistent with previous estimates as increased project spending at Bell Creek and Thunder Creek offset lower expenditures for mill expansion 8
- 9. Operations Review 9 9
- 10. Growing Production at Timmins Mine Recovered Ounces Q1/11 Q2/11 Q3/11 9M/11 Timmins Mine Timmins Mine 10,951 9,627 11,909 32,486 Thunder Creek 2,731 2,323 3,433 8,497 p Total Timmins West Complex 13,682 , 11,950 , 15,350 , 40,983 , Bell Creek Mine 8,635 5,666 3,491 17,792 Total Production 22,328 17,615 18,833 58,775 Cash Costs ($/t) (Timmins Mine) 92 122 94 96 Cash Costs (US$/oz) (Timmins Mine) 586 1,187 884 845 1 – Production growth reflects 24% increase in production from Timmins Mine 1 ‐ Higher costs reflect lower average grade and significant development and g g g g p silling work in support of production in H2/11 – Costs to improve in H2/11 10
- 11. Timmins West – Significant Progress Timmins Mine Q3/11 grades in UM1 reconciled very well to block model Excellent progress with development Completed significant drilling and development ahead of Q4 production Sill development to 545 Level 130,000 tonnes to be mined early in ’12 Ramped to from 650 L up to 480 L and down to 710 L Ramp to reach 730 L by year end to support second heading into UM1 early next year Advanced major infrastructure including fill raise shop fuelling system raise, shop, system, electrical upgrades, etc. Thunder Creek Established primary ventilation system at 730 Level Significant lateral development completed off both 300 and 730 Levels Commenced and progressing with large bulk sample (730 Level) p g g g p ( ) 11
- 12. UM1 – Current Mining Block 525 Level 525 – 565 565 L Level l 565 – 585 UM2a 585 Level 585 – 610 610 Level UM2b 610 – 650 12
- 13. Thunder Creek – 730 Level (Min. 100 x 200m) Bulk sample (Q4/11) 13 13
- 14. Bell Creek Complex 14 14
- 15. Bell Creek Mine Driving ramp to 500 Level Surface by year end* ramp Mined out areas Currently mining in North A Zone – 370 to 415 Level Grades improving from Q3/11 level Shaft Diamond drill program 300 Level ongoing for North A Deep Zone (500 to 800m levels) H2/11 stoping area 330 Level North A Zone 420 Level Planned development North A “Deep” (Upper portion of new gold system) 15 *Examples of Forward Looking Statements. 15 15
- 16. Bell Creek Mill – Expanding to Meet Growth Two‐phase mill expansion* Phase 1 from 2,000 tpd to 3,000 tpd by late 2012 Estimated cost $80 million Estimated cost – $80 million $20 ‐ $25 million estimated for 2011 ($12.7M as of Sept. 30) Phase 2 to 5,500 tpd Phase 2 to 5 500 tpd * Phase 1 incorporates material handling, crushing, grinding and infrastructure (to support Phase 2 capacity) Phase 2 work mainly involves back end of circuit Estimated cost – $40 to $50 million Timing dictated by mine advancement *Examples of Forward Looking Statements. 16
- 17. New SAG Mill Arriving in Timmins (Nov. 1, 2011) Expanding to 5,500 tpd (from 2,000 tpd currently)* Two phase expansion Two‐phase expansion * Phase 1 to 3,000 tpd by end of 2012 Mainly involves crushing and grinding Estimated cost $80 million Estimated cost – $80 million Phase 2 to 5,500 tpd * Phase 1 incorporates material handling, crushing, grinding and infrastructure crushing grinding and infrastructure (to support Phase 2 capacity) Phase 2 work mainly involves back end of circuit Estimated cost – $40 to $50 million Timing dictated by mine advancement C ti t k itti d l i Continue to work on permitting and planning for new mill on west side of Timmins 17
- 18. Exploration Review 2011 drill program to Sept. 30/11 • 133,000 metres • $24.5 million $ Key focus of drilling initial resource at Thunder Creek (Q4/11) and updates to existing NI 43‐101 resources 27 drills currently active 6 Timmins Mine underground 1 Thunder Creek surface 6 Thunder Creek underground 3 Thorne property 2 144 property 5 Bell Creek surface ll k f 3 Bell Creek underground 1 Deep hole 18
- 19. Deep Hole – Major Extension of Timmins Mine Hole intersects Ultramafic and Footwall Zone style mineralization at 2,380 metres Potential for 1.9 kilometre extension down plunge from bottom of current reserve, quadrupling of Ultramafic Zone plunge length Potential to add significant new resources considered extremely high Hole intersected north limb of Timmins Mine Fold Nose Planning wedge cuts into nose of fold structure Will eventually infill drill from new intersections up to bottom of current reserve Same potential exists to extend Thunder Creek mineralization with more drilling Drilling of deep hole continuing on LSG/RTM/AEG JV property Second zone intersected (37 metres wide) between 3,024 and 3,061m down ( ) , , hole. Core just received, currently being logged 19
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- 23. Fenn‐Gib Acquired from Barrick in August 2011 for 14.9 million shares Acquired from Barrick in August 2011 for 14 9 million shares Provides high‐quality project with large‐scale, open pit potential Initial NI 43‐101 resource targeted for release before end of 2011* Drill results released on October 18th included 1.31 gpt over 414.00 metres, strong gp , g confirmation of geologic mode and potential for depth extensions, plus expansion of mineralization 200m north *Examples of Forward Looking Statements. 23
- 24. Fenn‐Gib 24
- 25. Lake Shore Gold (LSG:TSX & NYSE Amex) Outlook 2011 production to reach at least 85,000 ounces poured 2011 production to reach at least 85 000 ounces poured* Head grades, cash operating costs and mill throughput in Q / Q4/11 all expected to improve* p p Significant growth in resources by year end o Initial resources from Thunder Creek and Fenn-Gib o To at least double resource base by March 2012 Continue drilling for additional discoveries and strike extensions *Examples of Forward Looking Statements. 25