Q4 & Year End 2011Lake Shore Gold Conference CallTSX, NYSE Amex: LSG March 27, 2012
Forward Looking Statements Certain statements in this presentation relating to the Companys expected production levels, production growth, exploration activities, potential for increasing resources project expenditures and business plans are "forward looking statements" or "forward looking resources, forward-looking statements 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 managements 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 , , p g , p 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. M t t t More i f information about risks and uncertainties affecting th C ti b t i k d t i ti ff ti the Company and it b i d its business i available i th C is il bl in the Companys most recent t t 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 Vancouver, B.C. 9001-2000 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 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
LSG: Good Progress in 2011 Doubled production to 86,565 ounces poured Finished year strong with >26 000 ozs poured in >26,000 Q4/11 Doubled D bl d resources f second consecutive year for d ti o Initial resources for Thunder Creek, Fenn-Gib, Vogel and M lhill V l d Marlhill Commenced 50% mill expansion – remains on track Continued to achieve significant exploration success3 *Examples of Forward Looking Statements.
LSG: Turning to 2012* Work l focused on ramping up mining and milling capacity W k plan f d i i i d illi it to 3,000 tonnes per day by late 2012 Work at Timmins West Mine and Bell Creek in first half 2012 focused on development, ore delineation, stope preparation Mill expansion advancing towards completion by late 2012 2012 guidance: 85,000 to 100,000 ounces, weighted to second half of year Strong growth in 2013 Cash costs in 2012 targeted at US$825 to US$875 p ounce g $ $ per First Quarter 2012: expected production of approx. 15,000 ounces, cash costs US$1,450 per oz, to improve as production ramps up4 *Examples of Forward Looking Statements.
LSG: Turning to 2012* Capital expenditures - $93M Timmins West Mine, $67M mill expansion and other mill improvements Expenditures at Bell C k exploration t b assessed as E dit t B ll Creek, l ti to be d year progresses Company funded to develop and bring Timmins West Mine to 3,000 tpd (including both mining and milling) Assessing opportunities to strengthen balance sheet to g pp g support other expenditures5 *Examples of Forward Looking Statements.
LSG: First Quarter 2012 Highlights Updated resource for Timmins West Mine Indicated: 1,122,500 ozs (5,826,000 tonnes @ 5.99 gpt) Inferred: 791,500 ozs (4,272,000 tonnes @ 5.76 gpt) Updated resource for Gold River Trend Total ounces nearly tripled and grade doubled Indicated: 117,400 ozs (690,000 tonnes @ 5.29 gp ) ( gpt) Inferred: 1,027,800 ozs (5,273,000 tonnes @ 6.06 gpt) Timmins West Mine PEA Demonstrates potential for substantial cash flows, attractive returns and favourable economics6 *Examples of Forward Looking Statements.
LSG: 2011 Operating Highlights Q4/11 2011 Gold G ld poured d 26,550 26 550 86,565 86 565 Total tonnes 186,231 671,467 Average grade 4.03 4 03 4.34 4 34 Total Production 24,809 82,585 Cash Costs* ($/t) (Timmins Deposit) Costs 102 95 Cash Costs* (US$/oz) (Timmins Deposit) 762 811 *Denotes a non-GAAP measure. Denotes measure7
LSG: 2011 Financial Highlights Q4/11 2011 Gold sold (oz) 21,956 91,468 Average price (US$/oz) 1,687 1 687 1,546 1 546 Proceeds from gold sales ($M) 37.8 140.2 Proceeds from commercial gold sales ($M) 14.8 66.2 Cash earnings from operations* $ millions 8.1 31.7 Net loss $ million 5.5 10.9 $ per share 0.01 0.03 *Denotes a non-GAAP measure.8
LSG: 2011 Expenditures 2011 Projects 96.7 Exploration 32.1 Mill Expansion 22.6 Total 151.4 Increased project spending mainly relates to additional development work at Thunder Creek and cost escalation Ended year with $66.2M cash and gold bullion inventory Franco-Nevada royalty/equity investment added $50 million in February 20129
Timmins West Mine Thunder Creek Timmins Deposit Timmins and 200 Level Thunder Creek deposits combined 300 Level Initial Thunder Creek resource released Nov. 2011 Updated Timmins deposit resource February 2012 650 Level PEA first evaluation 2012 Work 730 Level 2012 Work of fully integrated Program* Program* operation Conceptual view - full development of current resources *Examples of Forward Looking Statements.10
Timmins Deposit 545L Setting Ourselves Up g p 565L For Rapid Growth 585L In 2012: Ore delineation and 610L 610L infrastructure focus during early part of year Shaft 650L Production weighted to H2/12* Typical 670L stoping blocks 690L 710L 730L 750L 790L *Examples of Forward Looking Statements. 810L 11
Timmins Deposit 545L Setting Ourselves Up g p 565L For Rapid Growth 585L In 2012: Ore delineation and 610L 610L infrastructure focus during early part of year Shaft 650L Production weighted to H2/12* Typical 670L stoping Going forward: blocks 690L • R d f stoping on th Ready for t i three 710L new levels• Four additional levels 730L accessed d 750L 790L *Examples of Forward Looking Statements. 810L 12
Thunder Creek DepositSetting Ourselves UpFor Rapid GrowthIn 2012: Extensive ramping, ore Thunder Creek delineation and Lower Mine infrastructure work Stope production 660L weighted to H2/12* 695L 730L 730L 765L i l i Typical stoping block 800L *Examples of Forward Looking Statements.13
Thunder Creek DepositSetting Ourselves UpFor Rapid GrowthIn 2012: Extensive ramping, ore Thunder Creek delineation and Lower Mine infrastructure work Stope production 660L weighted to H2/12*Going forward: 695L • Development advanced on four levels• Multiple stoping blocks 730L 730L accessible 765L Typical stoping i l i block 800L *Examples of Forward Looking Statements.14
Shaft Bell Creek Complex Bell Creek Mine Mined out areas 2012 work plan for ork Recent R t mining Bell Creek Mine focused on North A establishing new “Deep” mining complex (475 L and 600 L)* L)15 *Examples of Forward Looking Statements. Conceptual view of planned work in 2012
Processing – Expanding Mill to Meet Growth Mill continues to perform well Recoveries of 96.1% in 2011 Exceeded 2 000 tpd capacity i E d d 2,000 t d it in Q4/11 Expansion to 3 000 tpd to be 3,000 completed by late 2012* Total cost of expansion $61 million in 2012* ($22.6 million spent in 2011)16 *Examples of Forward Looking Statements.
Timmins West Mine – PEA (Feb. 28, 2012) PEA Disclaimer: The Timmins West Mine PEA is preliminary in nature. It includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be17 realized.
Timmins West Mine – Production & Costs* Average annual production 140 000 ozs cash costs US$625/oz 140,000 ozs, (exchange rate at par) Expected average head grade of 5.2 grams per tonne Years 3 – 9 A Y 9: Average production of 160 000 ozs, cash costs US$590/ d ti f 160,000 h t US$590/oz18 *Examples of Forward Looking Statements. See PEA disclaimer
PEA: Highlights*• Potential for $70M free cash flow in Year 2, increasing to over $100M of annual free cash flow1 beginning in Year 3 using analyst consensus pricing2 g• At analyst consensus2, total cash flow of $730M, NPV of $570M, IRR of 100%, payback period of 1.25 years• Growth capital of $160M, including $67M for expansion & other mill costs, with $225M of sustaining and other capital Significant opportunities for project enhancement: Reducing capital and operating costs Increasing throughput levels Increasing resources 1. All information is presented before income taxes. At December 31, 2011, the Company had total tax shelters of $540 million. 2. Gold price starting at US$1,744/oz in 2012, declining to a long-term price of US$1,200/oz in 2018, average exchange rate of $US:1.00 = $CDN 1.07.19 *Examples of Forward Looking Statements. See PEA disclaimer
Exploration Review 2011 drill program 2011 drill program • 176,000 metres • $32.1 million Focus in 2011 was on establishing Focus in 2011 was on establishing and updating resources and exploring for extensions and new discoveries 2012 program focused on drilling to support operations and exploring key targets: TW and BC, Fenn‐Gib, k t t TW d BC F Gib GRT and 144 20 drills currently active 10 Underground (TWM & BC) 2 Gold River Trend (surface) 1 144 property (surface) 3 Bell Creek (surface) 4 Fenn‐Gib (surface)20
LSG Resources Measured & Indicated Tonnes Au Grade (g/t) Contained Ounces Timmins West 5,826,000 5.99 1,122,500 Gold River Trend 690,000 5.29 117,400 Bell Creek Mine* 1,790,000 4.36 251,200 Vogel 2,219,000 1.75 (OP) 125,000 Marlhill 395,000 4.52 57,400 Fenn Gib 40,800,000 0.99 (OP) 1,300,000 Total 2,973,500 Inferred I f d Tonnes T Au G d (g/t) A Grade ( /t) Contained Ounces C t i dO Timmins West 4,272,000 5.76 791,500 Gold River Trend 5,273,000 6.06 1,027,800 Bell Creek Mine* 8,427,500 4.40 1,192,900 Vogel 1,459,000 3.60 (some OP) 168,800 Fenn Gib 24,500,000 0.95 (OP) 750,000 Total 3,931,00021 * Updated NI 43-101 resource pending OP – Open Pit
Timmins West Mine Thunder Creek Timmins DepositTimmins Deposit 200 Level 600,900 ozs (2,949,000 tonnes @ 6.34 gpt) in 300 Level Indicated 281,500 ozs (1,579,000 tonnes @ 5.54 gpt) in InferredThunder C kTh d Creek 521,600 ozs (2,877,000 650 Level tonnes @ 5.64 gpt) in Indicated 730 Level 510,000 ozs (2,693,000 tonnes @ 5.89 gpt) in Inferred Timmins West Mine 1,122,500 ozs (5,826,000 tonnes @ 5.99 gpt) Indicated gpt) Conceptual view - full development of current resources 791,500 ozs (4,272,000 tonnes @ 5.76 gpt) Inferred) gpt) *Examples of Forward Looking Statements.22
Gold River Trend – Updated Resources Total ounces nearly tripled and grade doubled Indicated: 117,400 ozs (690,000 tonnes grading 5.29 gpt) Inferred: 1,027,800 ozs (5,273,000 tonnes grading 6.06 gpt) 250 m *Examples of Forward Looking Statements.23
Fenn-Gib* Potential large-scale, P t ti l l l open-pit mine 40.8M tonnes @ 0.99 gpt for 1.3M ozs Indicated 24.5M tonnes @ 0.95 gpt for 0.75M ozs Inferred Excellent exploration potential, expect to increase resources24 *Examples of Forward Looking Statements.
LSG: Near-Term Catalysts* Updated resource for Bell Creek Updated reserve for Timmins West Mine Filing of NI 43-101 reports for Gold River Trend and Timmins West Mine (including TWM PEA) Mill expansion completed late 201225 *Examples of Forward Looking Statements.
LSG: Three Multi-Million Ounce Gold Complexes in Century Old Timmins Camp Century-Old Bell Creek Complex Destor-Porcupine Fault City of Timmins Fenn-Gib Timmins Timmins West Complex Strong production growth expected in 2013* Cash costs to improve as production ramps up* Large and growing resource base to drive future growth Excellent opportunities to enhance existing projects, discover and develop new deposits Potential for i ifi P t ti l f significant f t free cash fl h flow b i i over next 18 months* beginning t th *26 *Examples of Forward Looking Statements.