WheelTug PLC Pitch Deck | Investor Insights | April 2024
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European Gold Forum, April 14 - 15, 2015 (revised)
1. TSX, NYSE MKT: LSG
Lake Shore Gold
TSX: LSG
NYSE MKT: LSG
1
March 2015
L A K E S H O R E G O L D C O R P.
Marketing Presentation
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 www.sedar.com, or the Companyâs 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
Scientific and technical information related to mine production and reserves contained in this presentation has been reviewed and approved by Natasha Vaz, P.Eng., Vice-
President, Technical Services, who is an employee of Lake Shore Gold Corp., and a âqualified personâ as defined by National Instrument 43-101 â Standards of
Disclosure for Mineral Projects (âNI 43-101â).
Scientific and technical information related to resources, drilling and all matters involving mine production geology, as well as exploration drilling, contained in this
presentation, or source material for this presentation, was reviewed and approved by Eric Kallio, P.Geo., Senior Vice-President, Exploration. Mr. Kallio is an employee of
Lake Shore Gold Corp., and is a âqualified personâ as defined by NI 43-101.
3. ď§ Two producing mines and a central mill
in Timmins, Ontario, Canada
⢠Timmins West Mine
⢠Bell Creek Mine & Mill
ď§ Large, prospective land position in
Timmins
⢠Right geology
ď§ Strong organic growth
⢠Large resource base at operations &
projects, exploration upside
4. ď§ Record year in 2014: 185,600 oz, 38% growth from 2013
ď§ Record quarter in Q1/15: 53,000 oz, 19% increase from Q1/14
ď§ Low Unit Costs(1)
2014 cash cost: US$592/oz, AISC(2): US$872/oz
Q1/15 cash cost: US$509/oz, AISC: US$748/oz
50-Tonne Trucks
introduced in 2014
(1) Examples of Non-GAAP measures, see Slide 17 for more
information
(2) Refers to all-in sustaining costs
5. 50-Tonne Truck at
Timmins West Mine
ď§ Operating cash flows(1) in 2014: $111.3M, 60% increase from 2013
ď§ Cash(2) increased $52.1M in 2014, $15.5M in Q1/15
2014 increase before debt repayments of $44.7M & $20.1M of financings
ď§ $77M of cash at Mar. 31/15, on track to reach >$100M by year end(3)
500,000th oz Au
Produced in Q4/14
(1) Refers to cash flows from continuing operating activities
(2) Refers to cash and bullion
(3) Assuming current C$ gold price & based on current business plan
6. ď§ 29% increase in ore reserves
ď§ Major new discovery at 144 Gap
ď§ Potential for multiple deposits of gold mineralization along TC-144
Trend
2 Drills Working at
144 Gap Discovery
7. ď§ Q1/15 production
⢠43,000 oz (+26% from Q1/14)
⢠230,600 tonnes at grade of 6.0 gpt
ď§ Reserves updated (Dec. 31/14)(1)
⢠509,700 oz (3.7M tonnes at 4.3 gpt)
⢠Replaced reserves mined
(1) See Slides 19, 20, 21 and 32 of presentation books for more information about reserves and resources
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
2012 2013 2014
64,000
110,000
142,200
(Ounces)
Production
Timmins DepositThunder Creek
270 Access Level
730 Access Level
260 Level
525 Level
650 Level
8. Timmins West Mine
144 Gap Discovery
(Within 500 m of Thunder
Creek)
Future Exploration
Target
Future Exploration
Targets
Gold River Trend
TCâ144 Trend
Gold River Project
M&I: 690k tonnes @ 5.3 gpt (117k oz)
Inferred: 5.3M tonnes at 6.1 gpt (1.0M oz)
Timmins
Deposit
Thunder
Creek
144 Gap
Zone
144
North
144
South
9. ď§ $18.0M exploration
program in 2015
ď§ @ 120,000 metres
exploration drilling
planned in 2015
⢠@ 90,000 m surface
⢠@ 30,000 m U/G
ď§ U/G exploration drift
advanced >200 metres,
to be completed in
Q3/15
Exploration Drift
1,200 m development
30,000 m U/G drilling
13. ď§ Q1/15
⢠10,000 oz (10,600 oz in Q1/14)
⢠69,300 tonnes processed at 4.7 gpt
ď§ More than doubled reserves in â14 update(1)
Bell Creek Mine Shaft
Deep
Zone
Potential
shaft
extension
0
10,000
20,000
30,000
40,000
50,000
2012 2013 2014
22,500
27,500
43,400
(Ounces)
Production
(1) See Slides 19, 20, 21 and 32 of presentation books for more information about reserves and resources
14. Reserves
P&P(1): 1,792,000 tonnes @ 4.6 gpt 263,600 oz
Resources
M&I(2): 4,904,000 @ 4.29 gpt 687,000oz
Inferred: 4,399,000 @ 4.84 gpt 685,000ozs
Area 2014 Drilling
(1) Proven & probable
(2) M&I resources inclusive of reserves
860 Level
1165 Level
1700 Level
Area of 2015 Production
LSG Mined Areas
Area of 2015 Production
Historic Production
15. 775 L
925 L
1050 L
1250 L
Phase 2
Phase 3
Phase 1
(1) Mining Resource/Mining Reserve
Measured
Indicated
Inferred
16. Performance
⢠Production of 170,000 â 180,000 oz
⢠Low costs in 2015
⢠Cash operating costs US$650 â US$700/oz
⢠All-in sustaining costs US$950 â US$1,000/oz
Cash Flow
⢠Generate free cash flow
⢠Repay short-term debt (by May 2015)
⢠Build cash position (potential for +$100M by Dec. 31/15)(2)
⢠Fund L/T debt and growth
Growth
⢠Large resource base supports long mine life
⢠Replace reserves mined
⢠Explore new 144 discovery â initial resource
⢠$18M exploration program planned
(1) Contains forward-looking information
(2) Assuming current C$ gold price & based on current business plan
17. Cash Operating Costs per Ounce
Cash operating cost per ounce is a Non-GAAP measure. In the gold mining industry, cash operating cost per ounce is a common performance measure
but does not have any standardized meaning. Cash operating costs per ounce are based on ounces sold and are derived from amounts included in the
Consolidated Statements of Comprehensive Loss (Income) and include mine site operating costs such as mining, processing and administration, but
exclude depreciation, depletion and share-based payment expenses and reclamation costs. The Company discloses cash cost per ounce as it believes
this measure provides valuable assistance to investors and analysts in evaluating the Companyâs performance and ability to generate cash flow. This
measure should not be considered in isolation or as a substitute for measures prepared in accordance with GAAP such as total production costs. A
reconciliation of cash operating costs and cash operating cost per ounce to total production costs for the years ended December 31, 2014 and 2013 is set
out on page 19 of the Companyâs 2014 and fourth quarter of 2014 MD&A.
All-In Sustaining Costs per Ounce
Effective the second quarter 2013, the Company has adopted a total all-in sustaining cost (âAISCâ) performance measure. AISC is a Non-GAAP
measure. The measure is intended to assist readers in evaluating the total costs of producing gold from current operations. While there is no standardized
meaning across the industry for this measure, the Companyâs definition conforms to the AISC definition as set out by the World Gold Council in its
guidance note dated June 27, 2013. The Company defines all-in sustaining cost as the sum of cash costs from mine operations, sustaining capital (capital
required to maintain current operations at existing levels), corporate general and administrative expenses, in-mine exploration expenses and reclamation
cost accretion related to current operations. All-in sustaining cost excludes growth capital, reclamation cost accretion not related to current operations and
interest and other financing costs. A reconciliation of all-in sustaining costs and all-in sustaining cost per ounce to total production costs for the years
ended December 31, 2014 and 2013 is set out on page 20 of the Companyâs 2014 and fourth quarter 2014 MD&A.
Cash Earnings from Mine Operations
Cash earnings from mine operations is a Non-GAAP measure and does not have any standardized meaning. The Company discloses cash earnings from
mine operations as it believes this measure provides valuable assistance to investors and analysts in evaluating the Companyâs ability to finance its
ongoing business and capital activities. The most directly comparable measure prepared in accordance with GAAP is earnings from mine operations.
Cash earnings from mine operations represent the earnings from mine operations prior to deducting non-cash expenses, and is calculated by adding
depletion, depreciation and share-based payments in production costs to earnings from mine operations. A reconciliation of cash earnings from mine
operations to earnings from mine operations for the years ended December 31, 2014 and 2013 is set out on page 20 of this MD&A.
(1) More information about cash operating costs and all-in sustaining costs and other Non-GAAP measures, including reconciliations of these measures to the most directly
comparable GAAP measures, is provided on pages 23 â 25 of the Companyâs full-year and fourth quarter 2014 Managementâs Discussion & Analysis, which is posted at
www.sedar.com and on the Companyâs website at www.lsgold.com.