Annual & Special meeting


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Annual & Special meeting

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Annual & Special meeting

  1. 1. Lake Shore Gold Corp. TSX & NYSE MKT : LSG Annual General and Special Meeting May 15, 2013
  2. 2. 2 Information included in this presentation relating to the Company's expected production levels, production growth, costs, cash flows, economic returns, exploration activities, potential for 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 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 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, 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 surface diamond drilling projects at the Timmins West Mine Complex, Bell Creek Mine Complex; Fenn-Gib property and Casa Berardi optioned property are Jacques Samson, P.Geo. and Keith Green, P.Geo. Dean Crick, P.Geo. is the QP for underground drilling at the Timmins West Mine and Bell Creek Mine properties. Reno Pressacco, P.Geo is the QP for the current resource estimate at the Marlhill Deposit. Ralph Koch, P.Geo is the QP for the current resource estimate at the Bell Creek property and portions of the Timmins West Mine. Bob Kusins, P.Geo. is the QP for resource estimation for portions of the Timmins West Mine and at all remaining Company properties. As QPs, Messrs. Samson, Green, Crick, Koch and Kusins have prepared or supervised the preparation of the scientific or technical information for their respective properties as reviewed in this MD&A. Messrs., Samson, Green, Koch, Kusins and Crick are employees of the Company. Forward Looking Statements
  3. 3. Sharp Correction in Gold, Gold Equities 3 -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% LSG Spot gold S&P/TSX Global Gold
  4. 4. 4  Complete construction of Timmins Operations to over 3,000 tpd in 2013  Commission mill expansion in Q3  Advance underground development at Timmins West and Bell Creek mines  Produce 120,000 to 135,000 ounces this year  Achieve cash costs of US$800 – US$875/oz (<US$700/oz by Q4)  Invest $90M to complete construction – capital to decline dramatically after mill expansion completed  Generate net free cash flow by Q4/13 (at US$1,450/oz gold price) (1) Examples of forward-looking information Strategy Focused on Value & Cash Flow(1) LSG’s Strategy: Deliver value by generating net free cash flow
  5. 5. 5  In 2014(1)  Produce at least 140,000 oz  Cash costs of <US$700/oz  Grow net free cash flow  Build financial strength, reduce debt  Establish sustainable business, even at current gold price (1) Examples of forward-looking information Strategy Focused on Value & Cash Flow LSG’s Strategy: Deliver value by generating net free cash flow
  6. 6.  Timmins West Mine  Current resource of more than 1.6M oz Au at grade of 5.5 g/t  Ramping up production to more than 140k oz annually  Low-cost producer in region  Significant opportunities for exploration and resource expansion  Bell Creek Mine • Current resource of 1.6M oz Au at grade of 4.6 g/t • Current reserve supports production of >20k oz Au/year for 5 years with potential for expansion • Multiple exploration targets for expansion and new discoveries  Bell Creek Mill • Conventional gold mill circuit with crushing and grinding, gravity and leaching, followed by CIP process • Excellent operating performance with better than 95% recovery • Completing Phase 2 expansion >3,000 tpd in Q3/13 6 Key Assets Provide Solid Foundation(1) (1) Examples of forward-looking information
  7. 7. Timmins West Mine  Underground mine with two deposits – Timmins Deposit and Thunder Creek Deposit  World class mine with exceptional infrastructure and well-trained  Gold production of 64,177 ounces in 2012  Q1/13 production of 18,700 ounces (161,410 tonnes @ 3.7 gpt)  Keys to realizing grade: extensive development, tight-spaced drilling, increased experience mining orebodies (1) Resources inclusive of reserves (2) Example of Forward Looking Statements 7 Reserves (ounces) 798,000 Av. grade (gpt) 5.2 M&I resource (ounces) (includes reserves) 1,061,000 Av. grade (gpt) 5.5 Inferred resources (ounces) 615,000 Av. grade (gpt) 5.4 Full production (‘000s ounces/yr) >140,000(1) Cash cost/oz (full production) <US$700(1) (1) Examples of Forward Looking Statements
  8. 8. 8 Thunder Creek Stock 650 Level 200 Level 300 Level 730 Level TW Shaft Ramp RuskShearZone Holmer Shear Zone Thunder Creek Rusk Timmins Mine deposit 0 400 meters East-west Shear Zone D3 shear zone Syenite, monzonite Pyroxenite (AIC) Turbidites, felsic volcanic Mafic volcanics AB A B Rusk Zones Porphyry Zones Timmins Deposit  Focus between 790 to 950 levels  New drill platforms on 750 and 790 Mineralized structure intersected at 2,400 m depth Mineralization extended along strike and to 2,400 m depth 1,200 Level Thunder Creek  2012 drilling results confirm core to mineralization and identifies 50m west extension of Rusk Zone at 765 Level  2013 to continue focus on infill and explore along strike Timmins Mine  Results confirm continuity of UM1, UM5 & intersects high- grades o/s resource  Key target between 650 and 790 levels Timmins West Mine – A Mine Built for Growth
  9. 9. 9 Timmins West Mine
  10. 10. Bell Creek Mine – Production & Growth (1) Resources inclusive of reserves (2) Example of Forward Looking Statements 10 Production Funding Evaluation of Deep Zone Initial reserves (ounces) 129,000 Av. grade (gpt) 4.2 M&I resource (ounces) (includes reserves) 710,000 Av. grade (gpt) 4.7 Inferred resources (ounces) 904,000 Av. grade (gpt) 4.6  Underground mine with five years of reserves  Gold production of 21,605 ozs in 2012  4,580 ounces (36,230 tonnes @ 4.2 gpt) in Q1/13  Current production funding evaluation of high- potential deep zone  Potential to substantially grow production by deepening shaft  Infrastructure: surface ramp to 650 L, 290 m shaft (used for ventilation only), vent raises, electrical, de- watering facilities Deep Zone (1) Examples of Forward Looking Statements Potential shaft extension Shaft
  11. 11. 11 Bell Creek Mill – 50% Expansion Project SAG Mill Building New Thickener New CIL Tanks Crusher Truck Dump 6,000 tonne Ore bin  2,500 tpd plant consisting of a crushing circuit, two-stage grinding circuit with gravity recovery, followed by pre-oxidation and cyanidation of the slurry with CIP and CIL recovery  Exceptional operational & metallurgical performance with better than 95% recovery  Expansion to 3,000 tpd to be completed in Q3/13  Potential expansion to 5,500 tpd to support future production increases from Timmins West and Bell Creek incorporated in current infrastructure  Crushing and grinding capabilities already at this level
  12. 12. Bell Creek Mill – New Crushing/Grinding Circuit 12
  13. 13. 13 Bell Creek Mill – Solution Circuit & Refinery
  14. 14. 14 Production to reach >140,000 oz by 2014 Production (Actual) Guidance (low end) Denotes range Strong Near-Term Production Growth(1) Production Cash Costs Bell Creek potentialEstimate (low end) (1) Examples of Forward Looking Statements 200 300 400 500 600 700 800 900 1,000 0 40,000 80,000 120,000 160,000 200,000 2012 2013 2014 2015 2016 2017
  15. 15.  Timmins West Complex  Both deposits at Timmins West Mine open for expansion  Gold River Trend has >1M oz in resource, limited drilling in many areas  144 property cover 4 km trend southwest of Timmins West Mine 15 Outstanding Exploration Potential  Bell Creek Complex  Significant potential for growth at Bell Creek Mine  Initial resources established at Vogel and Marlhill  Additional exploration targets with limited or no drilling  Fenn-Gib  Advanced exploration stage project  Large, near-surface, potential open-pitable resource  Major extensions announced, new targets discovered
  16. 16. 16(1) Examples of forward-looking information Lake Shore Gold – Poised for Value Creation(1)  >60% growth between 2012 and 2014 – Development and construction largely completed  Estimated cash costs of <US$700/oz by Q4/13  @ 3.2M oz M&I resources and @ 3.5M oz Inferred resource with potential for much more Improving operating costs Full pipeline of projects & exploration properties Strong production growth Targeting Net Free Cash Flow  Capital investment to decline dramatically starting in Q3/13 Declining capital requirements