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Denver Gold Forum

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Denver Gold Forum

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Denver Gold Forum

  1. 1. Lake Shore Gold Corp.Denver Gold ForumSeptember 9-12, 2012 TSX & NYSE MKT : LSG www.lsgold.com
  2. 2. Forward Looking StatementsInformation included in this presentation relating to the Companys expected production levels, production growth, costs, cash flows, economicreturns, 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 underthe United States Private Securities Litigation Reform Act of 1995 and are referred to herein as "forward-looking statements." The Company does notintend, and does not assume any obligation, to update these forward-looking statements. These forward-looking statements represent managements bestjudgment based on current facts and assumptions that management considers reasonable, including that operating and capital plans will not be disruptedby 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 actualmineralization on properties will be consistent with models and will not be less than identified mineral reserves. The Company makes no representation thatreasonable business people in possession of the same information would reach the same conclusions. Forward-looking statements involve known andunknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially differentfrom any future results, performance or achievements expressed or implied by the forward-looking statements. In particular, delays in development ormining and fluctuations in the price of gold or in currency markets could prevent the Company from achieving its targets. Readers should not place unduereliance on forward-looking statements. More information about risks and uncertainties affecting the Company and its business is available in theCompanys most recent Annual Information Form and other regulatory filings with the Canadian Securities Administrators, which are posted on sedar atwww.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 CONTROLLake 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 samplesconsisting 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 arechecked to be within acceptable limits prior to being accepted into the GEMS SQL database. Routine assays have been completed using a standard fireassay 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 theTimmins mine and Thunder Creek underground project, the remaining pulp is taken and fire assayed with a gravimetric finish. Select zones with visible goldare 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. Theremaining 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 Lablocated in Timmins, Ontario, and the pulps shipped to ALS Chemex Assay Laboratory in Vancouver, B.C. ALS Chemex is an ISO 9001-2000 registeredlaboratory preparing for ISO 17025 certification.QUALIFIED PERSONThe Company’s Qualified Persons (“QPs”) (as defined in National Instrument 43-101, “Standards of Disclosure for Mineral Projects”) for surface diamonddrilling projects at the Timmins West Mine Complex, Bell Creek Mine Complex; Fenn-Gib property and Casa Berardi optioned property are JacquesSamson, 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 estimateat 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 WestMine and at all remaining Company properties. As QPs, Messrs. Samson, Green, Crick, Koch and Kusins have prepared or supervised the preparation ofthe scientific or technical information for their respective properties as reviewed in this MD&A. Messrs., Samson, Green, Koch, Kusins and Crick areemployees of the Company. 2
  3. 3. LSG – 5 Steps to Value Creation(1) Pipestone Fault Bell Creek Complex Bell Creek Mill Destor-Porcupine Fault City of Timmins Fenn-Gib Timmins Timmins West Mine Timmins West Complex Main drivers of near-term growth #4Step #2 #1 #5 #3 Exploration  upside Low operating costs exploration targets Strong  Effective capitalsheet – positioned to fund growth Strong balance management Solid & growing production Highly-prospective balance  Effective      On track$90M(2) (Afterto 100,000 ozs mining infrastructure Cash of for 2012 capex Timminsper sheet    Multiple targets close to capital  of Westinin 2012 Targeting 85,000 repayment of UniCredit oz 2012 Targeting US$825-US$875 $170-$175M facility) target Low  management    Timmins West development program largely completed by Further growth costs provide new project potential operating   planned in 2013  Bell Creek andsenior, secured debt reduces 2014(2) Repaymentcosts Fenn-Gib of US$600/oz by risk Targetingof Solid &  cash end of 2012 growing   Targeting >150,000 ozs by 2014 production (2) After convertible debenture issue & repayment of ozs @ 5.2 gpt and a C$/US$ exchange rate ofbullion inventory (2) Assumes gold sales in 2014 of 163,000 US$50 million UniCredit facility, includes gold $1.00:$1.04 (1) Examples of Forward Looking Statements 3
  4. 4. LSG – 5 Steps to Value Creation(1)Solid & growing  Targeting 85,000 to 100,000 ounces in 2012 production  Targeting >150,000 ozs by 2014Low operating  Targeting US$825-US$875/oz in 2012 costs  Targeting US$600/oz by 2014(2)Effective capital  On track for 2012 capex of $170-175 million management  Timmins West Mine largely completed after 2012Strong balance  Funded for growth (cash of $90M)(3) sheet  Repayment of senior, secured debt reduces Exploration  Multiple targets near Timmins West Mine upside  Bell Creek/Fenn-Gib offer additional upside (1) Examples of Forward Looking Statements (2) Assumes gold sales of 163,000 ozs @ 5.2 gpt and a C$/US$ exchange rate of $1.00:$1.04 (3) After convertible debenture issue & repayment of US$50M UniCredit facility, includes gold bullion inventory. (1) Examples of Forward Looking Statements 4
  5. 5. Three Multi-Million Ounce Complexes Timmins West Complex – Total resources of 1.2M ozs M&I, 1.8M ozs Inferred – Timmins West Mine in production, targeting strong production growth – 144 adjacent to Timmins West Mine, focus of near-term exploration, Gold River Trend provides additional upside Bell Creek Complex – Current production: approx. 20,000 ozs/year – Evaluating potential of North A Deep Zone – Multiple exploration targets at & around Bell Creek Mine – Resources: 0.8M ozs M&I, 1.1M ozs Inferred Fenn-Gib – Large open-pit project 60 kms from Timmins – Exploration success highlights potential for growth – Resources: 1.3M ozs Indicated, 0.8M ozs Inferred (1) Examples of Forward Looking Statements 5
  6. 6. LSG – Large, Growing Resource Base Probable Reserves Tonnes Au Grade (g/t) Contained Ounces Timmins West Mine 4,922,000 5.21 823,800 Measured & Indicated(1) Tonnes Au Grade (g/t) Contained Ounces Timmins West Mine 5,826,000 5.99 1,122,500 Gold River 690,000 5.29 117,400 Bell Creek Mine 4,249,000 4.73 646,400 Vogel 2,219,000 1.75(2) 125,000 Marlhill 395,000 4.52 57,400 Fenn Gib 40,800,000 0.99(2) 1,300,000 Total 3,368,700 Inferred Tonnes Au Grade (g/t) Contained Ounces Timmins West Mine 4,272,000 5.76 791,500 Gold River 5,273,000 6.06 1,027,800 Bell Creek Mine 6,088,506 4.87 953,800 Vogel 1,459,000 3.60(3) 168,800 Fenn-Gib 24,500,000 0.95(2) 750,000 Total 3,691,900 (1) Resources are inclusive of reserves (2) Open-pit resources (3) Combination of underground and open-pit resources 6
  7. 7. LSG – Convertible Debenture Issue  $90 million of senior unsecured convertible debentures  Over-allotment option for additional $13.5 million  6.25% interest rate paid semi-annually in March & September  Maturity date of September 30, 2017  Convertible into common shares at a price of $1.40 per share  Redeemable after September 15, 2015  Closed September 7, 2012, net proceeds of $86.4 million Net proceeds to repay US$50M UniCredit senior secured debt facility and provide funding at lower cost/longer term than Sprott $35M standby line 7
  8. 8. Sources and Uses of Cash Sources of Cash $ millions Cash and bullion inventory (June 30, 2012) 37.0 Gold Loan (Received July 16, 2012) 35.0 Convertible debentures (closed Sept 7/12) 86.4 H2/12 operating cash flow(1)(2) 33.0 Total sources of cash (to end of 2012) 191.4 Additional liquidity (standby line) 35.0 Total liquidity at end of 2012 226.4 Uses of Cash (Estimates for H2/12) (1) $ millions Repayment of UniCredit facility 50.0 Development of Timmins West Mine 50.0 Phased mill expansion and other improvements 16.0 Advancement of Bell Creek Mine 8.5 Exploration 3.5 Corporate G&A 6.0 Financing costs 3.0 Total uses of cash 137.0 (1) Examples of forward-looking information (2) Assumptions include low-end of target production range at US$875oz cash cost (plus royalties), US$1,650/oz gold price, C$/US$ exchange rate at par 8
  9. 9. LSG – On Track to Achieve 2012 Targets  Production target: 85,000 to 100,000 ounces  H1/12 – 41,106 ounces recovered (40,479 ounces poured)  24,426 ounces recovered during Q2/12  Cash cost target of US$825 to US$875 per ounce  H1/12 – US$936 per ounce  Cash costs of US$849 per ounce produced in Q2/12  Capital expenditures of approx. $190 million (incl. exploration)  Capex estimate reduced to $170-$175 million in June  H1/12 capex of $92.3 million  Complete significant development work at Timmins West Mine to support strong production growth in 2013  On track for multiple mining horizons by year end 9
  10. 10. Timmins West Complex130 km2 land position, western extension of Timmins Gold Camp Pipestone Fault Bell Creek Complex Hoyle Pond Hollinger Pamour Destor Porcupine Fault McIntyre Timmins Dome Fenn-Gib Timmins West Complex 10
  11. 11. Timmins West Complex (Magnetic Survey) Thunder Creek – 144 Trend Thunder Creek Deposit Timmins Deposit 144 North Gold River Gold River West East 144 South Gold River Trend 11
  12. 12. Timmins West: High-Growth Mining Complex 6 kms Thunder Creek – 144 Trend Timmins West Mine 144 Thunder Creek Timmins Deposit 2,000 Lv UM and FW structures extended to 2,400 m 12
  13. 13. Timmins West Mine – 18Kms West of TimminsKey Facts:• Reserves: 823,800 ozs (4.9M tonnes & 5.21 gpt)• Resources: 1.1M ozs Indicated(1), 0.8M ozs Inferred• Production of 29,100 ozs produced in H1/12• Targeting >150,000 ozs by 2014 @ cash costs around US$600/oz(2)• Infrastructure: 710 m, 5.5 m diameter shaft, hoist, surface ramp, two 800m drifts to Thunder Creek• 285 employees (85 surface, 200 U/G) (1) Resources inclusive of reserves (2) Examples of Forward Looking Statements. 13
  14. 14. Section View Timmins Deposit Thunder Creek Deposit 2012 Work 2012 Work Program* Program*  2012 plan to access >700,000 ozs of resources(1)  Supports several years of mining (1) Examples of Forward Looking Statements. 14
  15. 15. TWM – Significant Potential to Upgrade Resources Timmins Deposit Thunder Creek Deposit Long Section Looking SE Long Section Looking SE 300 m Level 290 m Level 395 m Level 525 m Level 650 m Level 730 m Level Inferred Resource Inferred Resource Indicated Resource Indicated Resource 15
  16. 16. TWM – Potential at Depth & Along TC-144 Trend 144 Thunder Creek Deposit Timmins Deposit Main and FW Zones Rusk Horizon Ultramafic Fold Structure Bristol Creek Fault Porphyry Zone Thunder Creek Stock Along contact towards 144 Mafic-Sedimentary Contact (Multiple Folds provide exploration potential) (1) Examples of Forward Looking Statements 16
  17. 17. SW Extension of 144 and TC‐144 Gap Targets  ~ 10,000 m of drilling planned for Q3 and Q4 with focus on 144 Project(1)144SW  144 South Thunder Timmins 144 North TC‐144 Gap Creek Deposit Open 1.5km1km Lv Syenite Intrusives * View looking to west (1) Examples of Forward Looking Statements. 17
  18. 18. Bell Creek Complex32 km2 land position, includes Bell Creek Mine and Mill and multipleother exploration targets Bell Creek Complex Pipestone Fault Hoyle Pond Hollinger Pamour Destor Porcupine Fault McIntyre Timmins Dome Fenn-Gib Timmins West Complex 18
  19. 19. Shaft Shaft Mined outBell Creek Mine – 2nd Producing Mine areas Resources: 646,400 ozs (4.2M t @ 4.73 gpt) Indicated, 953,800 Recent mining ozs (6.1M t @ 4.87 gpt) 610mL 625mL Production: Current production Drilling target from 535mL 775mL approx. 20,000 ozs/year(1) Drilling target from 610mL 12,005 ozs produced in H1/12 1000mL Evaluation of high-potential North A “Deep” North A Deep Zone ongoingKey Facts: Located 20 kms east of Timmins Infrastructure includes mill, tailings 300 m shaft (non-producing), hoist, decline to 565 L, vent raises 95 employees (25 surface, 70 U/G) (1) Examples of Forward Looking Statements. (1) Examples of Forward Looking Statements 19
  20. 20. Milling Facility – Performing Very Well Crusher 6,000 tonne Ore bin SAG Mill Building Truck Dump New CIL Tanks New Thickener 183,215 tonnes processed in Q2/12 – 2,013 tpd Quarterly record for recoveries in Q2/12 – 96.8% Expansion on track to reach 2,500 tpd in Q4/12, 3,000 tpd in 2013(1) Further expansion contemplated to 5,500 tpd(1) (1) Examples of Forward Looking Statements. 20
  21. 21. Mill Expansion – Site ConstructionNew truck dump Jaw crusher buildingOre bin foundation Conveyor tunnel to ore bin SAG Mill Building 21
  22. 22. Mill Expansion – Site ConstructionSAG Mill Building New SAG millNew thickener New CIL Tanks 22
  23. 23. Fenn-GibLarge-scale, open-pit project 60kms from Timmins Bell Creek Complex Pipestone Fault Hoyle Pond Hollinger Pamour Destor Porcupine Fault McIntyre Timmins Dome Fenn-Gib Timmins West Complex 23
  24. 24. Fenn-Gib – Potential Large Open-Pit Mine Acquired from Barrick Gold Corp. in August 2011 Initial resource with significant potential for growth:  M&I - 1.3M ozs (40.8M tonnes @ 0.99 gpt)  Inferred - 0.75M ozs (24.5 tonnes @ 0.95 gpt) Potential for large-scale production based on a 15,000 to 25,000 tonne per day operation(1) (1) Examples of Forward Looking Statements. 24
  25. 25. Latest drilling and re-sampling at Fenn Gib continues to confirm large-scale pit potential 1:5,000 25
  26. 26. Fenn-Gib – Identifying New Targets Ross Mine Hislop Open Pit (Active Mine) Main Zone ~ 2 million ounce resource with excellent growth potential400 Lv Open Central  Porphyry  Structure1000 Lv (1) Examples of Forward Looking Statements. 26
  27. 27. LSG – 5 Steps to Value Creation(1)Solid & growing  Targeting 85,000 to 100,000 ounces in 2012 production  Targeting >150,000 ozs by 2014Low operating  Targeting US$825-US$875/oz in 2012 costs  Targeting US$600/oz by 2014(2)Effective capital  On track for 2012 capex of $170-175 million management  Timmins West Mine largely completed after 2012Strong balance  Funded for growth (cash of $90M)(3) sheet  Repayment of senior, secured debt reduces Exploration  Multiple targets near Timmins West Mine upside  Bell Creek/Fenn-Gib offer additional upside (1) Examples of Forward Looking Statements (2) Assumes gold sales of 163,000 ozs @ 5.2 gpt and a C$/US$ exchange rate of $1.00:$1.04 (3) After convertible debenture issue & repayment of US$50M UniCredit facility, includes gold bullion inventory. (1) Examples of Forward Looking Statements 27

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