Second Quarter 2012


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Second Quarter 2012

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Second Quarter 2012

  1. 1. Lake Shore Gold Corp.Second Quarter 2012Conference Call & Webcast TSX & NYSE MKT : LSGAugust 10, 2012
  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, 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 diamond drillingprojects at the Timmins deposit surface; Thunder Creek, Gold River Trend and 144 properties; Bell Creek Mine; and Casa Berardi optioned property areJacques Samson, P.Geo., Stephen Conquer, P.Geo, and Keith Green, respectively. Dean Crick, P.Geo. is the QP for the Timmins deposit and ThunderCreek 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 respectiveproperties as provided in this presentation. Messrs., Samson, Conquer, Kusins, Crick and Green are employees of the Company. 2
  3. 3. Strong Second Quarter 2012 Results Performed well against targets in Q2/12 Actual Gold produced (ozs) 24,426 Cash costs (US$/oz)* $849 Three consecutive quarters of meeting or exceeding targets Significant progress with development program  Key to realizing full potential of assets Effective balance sheet management – Finalized $70M Sprott credit facility, reduced 2012 capex budget by $15.0 to $20.0 million (1) Cash costs based on ounces produced 3
  4. 4. LSG – 2012 YTD Operating Highlights Q2/12 6 Months Gold poured 24,298 40,479 2012 Target 85,000-100,000 Total tonnes 183,215 343,724 ozs Average grade 4.30 3.87 Total production 24,426 41,106 Cash costs produced 2012 Target $849 $949 $825-$875/oz (US$/oz)  Sharp pick up in tonnes and grade drives strong production growth – 46% from Q1/12 and 39% from Q2/11 4
  5. 5. LSG – 2012 YTD Financial Highlights Q2/12 6 Months Commercial gold sales (ozs) 24,915 39,352(1) Average price (US$/oz) $1,605 $1,641 Gold sales ($M) $40.7 $72.0 Commercial gold sales ($M) $40.7 $65.3 Cash earnings from ops ($M) $16.8 $26.3 Capital expenditures $48.8 $92.3  Cash earnings from operations increased 79% from Q1/12 and >500% from Q2/11  Reduced capital budget by $15 to $20 million – 2012 capital costs now estimated at $170-$175M(2) (1) Total gold sales in H1/12 of 43,389 ozs (2) Example of forward looking information 5
  6. 6. Funded to Achieve Development Plans(1) Sources of Cash $ millions Cash and bullion inventory (June 30, 2012) 33.3 Gold Loan (Received July 16, 2012) 35.0 Standby Line (Available Nov. 1/12) 35.0 H2/12 Operating Cash Flow(2) 37.5 Total sources of cash 140.8 Uses of Cash (Estimates for H2/12) $ millions 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 2.5 Total uses of cash 86.5 (1) Examples of forward-looking information (2) Assumptions include 50,000 ozs Au sold in the 2H’12 at US$875oz cash cost (plus royalties), US$1,650/oz gold price, C$/US$ exchange rate: $0.98 6
  7. 7. LSG – Effective Execution in Q2 & H1/12  Q2/12 and H1/12 production tracked well against targets  Processed 24,426 ozs in Q2/12 (183,215 t grading 4.30 gpt) o Timmins Mine: 18,894 ozs (136,455 tonnes @ 4.44 gpt) o Bell Creek: 5,532 ozs (46,760 tonnes @ 3.83 gpt)  Improved grade reflects mining in higher-grade areas and greater proportion of mill feed from stoping versus development in Q2/12  Operating costs in line with expectations - $116/tonne YTD  Excellent progress with development program (YTD) o 5,186 metres of total capital development o 64,875 metres of definition and delineation drilling  Mill operating extremely well o Throughput of 2,013 tpd in Q2 (exceeded capacity) o Quarterly record for recoveries at 96.8% 7
  8. 8. Timmins West Mine Timmins Deposit Thunder CreekH1/12 Work Program Timmins Deposit Thunder Creek 200 Level Total of 4,300 m of capital development completed (60% at 300 Level Thunder Creek) 58,400 metres of U/G drilling completed Major infrastructure completed includes 650 Level refuge stations, 2012 Work 2012 Work accesses to Program* Program* 730 Level ventilation raises, escape ways and passes Conceptual view - full development of current resources *Examples of Forward Looking Statements.8 8
  9. 9. LSG – Timmins Deposit 565L In H1/12 585L  Sill development in UM Zone below 650L 610L  Established Shaft  infrastructure on 690L, 650L  670L, 730L & 710L 670L  Targeting multiple 690L  mining horizons 710L  between 650L and 730L by year end(1) 730L  750L  790L  (1) Examples of Forward Looking Statements. 9
  10. 10. LSG – Thunder CreekIn H1/12 Work largely focused on ramp development from Thunder Creek  Lower Mine 730L up to 695L and down to 765L 660L  Large test stope in Q2/12 from 695L  730L to 765L Targeting multiple 730L  mining horizons between the 660L and 800L by year 765L  end 800L  10
  11. 11. ShaftBell Creek Mine – H1/12 Mined out areas 723m of development completed - North A Deep ramp reached 565L (total Recent mining vertical advance of 67m) 163m of development in North A 535L exploration drift “Deep” completed – definition drilling program in North A Deep commenced June/12 Mining of upper North A Deep and North B zones completed Q2/12 (1) Examples of Forward Looking Statements. (1) Examples of Forward Looking Statements 11
  12. 12. Milling Facility – Record Recoveries 183,215 tonnes processed in Q2/12 – 2,013 tpd Quarterly record for recoveries – 96.8% Expansion on track to reach 2,500 tpd in Q4/12, 3,000 tpd in 2013(1) (1) Examples of Forward Looking Statements. 12
  13. 13. Recent exploration focused on Timmins West Complexrefinement of geological models, investigation of new prospects ~ 10,000 m of drilling planned for Q3 and Q4 with focus on 144 Project Thunder Creek – 144 Trend Thunder  Timmins 144 Creek Mine 2,000 Lv 13
  14. 14. 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 14
  15. 15. Highway 144 ProjectConfirming Expansion Potential at Thunder Creek • Recent work by LSG includes 34 widely  spaced  Thunder Creek holes focused on areas within 300m of surface TC‐144 Gap Zone TC‐10‐85a 8.07 gpt /2.1m • Results confirm minimum 3.5km extension of  structure with similar rock types, alteration and  better grades and widths of gold as Thunder Creek  at similar depths. HWY‐11‐12 4.9 gpt / 5.4m • New drilling to focus on 1.5 km gap between  14.4 gpt /0.95m Thunder Creek and 144 as well as extension of  2.4 gpt /19.0m structure to the southwest 144 N Drill core from Thunder Creek and 144 Projects TC07‐36: 63 gpt/0.60m HWY‐11‐28 12.6 gpt / 1.3m 1.3 gpt /57.7mProjected SW  Inc 4.1gpt /7.6m Extension 144 South HWY‐11‐11 16.60 gpt/0.50m 15
  16. 16. SW Extension of 144 and TC‐144 Gap Targets 144SW  144 South Thunder Timmins 144 North TC‐144 Gap Creek Mine Open 1.5km1km Lv Syenite Intrusives * View looking to west 16
  17. 17. New Thibeault and Red Porphyry Trends Identified at Gold  River Allerston Bristol shaft Timmins West Mine  TC DA 144 Red Porphyry Gold River Trend Thibeault Wakemac 17
  18. 18. LSG – The Bottom Line LSG building track record of meeting targets o Met/exceeded production targets in 3 consecutive quarters o Effectively managing capital and operating costs Successfully developing mines and mill key to L/T value creation o Establishing multiple mining horizons in order to achieve production & cost estimates o 2012 development program advancing well o On track for strong production growth starting in 2013(1) o Expanding mill to support growth – mill operating well Managing balance sheet for shareholders o Completed Sprott credit facility Significant exploration upside TSX, NYSE MKT: LSG (1) Examples of Forward Looking Statements. 18