Third Quarter 2012


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Third Quarter 2012

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Third Quarter 2012

  1. 1. Lake Shore Gold Corp.Third Quarter 2012Conference Call & Webcast TSX & NYSE MKT : LSGNovember 8, 2012
  2. 2. Forward Looking StatementsInformation included in this presentation relating to the Companys 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-lookinginformation" within the meaning of certain securities laws, including under the provisions of Canadian provincial securities laws and under the United StatesPrivate Securities Litigation Reform Act of 1995 and are referred to herein as "forward-looking statements." The Company does not intend, and does notassume any obligation, to update these forward-looking statements. These forward-looking statements represent managements best judgment based oncurrent facts and assumptions that management considers reasonable, including that operating and capital plans will not be disrupted by issues such asmechanical failure, unavailability of parts, labour disturbances, interruption in transportation or utilities, or adverse weather conditions, that there are nomaterial unanticipated variations in budgeted costs, that contractors will complete projects according to schedule, and that actual mineralization onproperties will be consistent with models and will not be less than identified mineral reserves. The Company makes no representation that reasonablebusiness 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 futureresults, performance or achievements expressed or implied by the forward-looking statements. In particular, delays in development or mining andfluctuations in the price of gold or in currency markets could prevent the Company from achieving its targets. Readers should not place undue reliance onforward-looking statements. More information about risks and uncertainties affecting the Company and its business is available in the Companys mostrecent Annual Information Form and other regulatory filings with the Canadian Securities Administrators, which are posted on sedar at, orthe 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. Q3/12 Results – Significant Progress Q3/12 a strong quarter in many areas  Record mine and mill throughput  Low per tonne cash operating costs  Excellent progress with mine development and mill expansion  Capital spending in line despite external cost pressures  Exploration success – expanding high-grade mineralization at Timmins Deposit and Thunder Creek, confirming potential of North A Deep Zone at Bell Creek Positioned for strong Q4/12 results and sharp increase in production in 2013 (1) Examples of forward-looking information 3
  4. 4. Keys to Higher Share Price Report strong Q4/12 – Over 85,000 ounces Au in 2012  Average grade (quarter to date): >4.0gpt  Current throughput: 2,300 tpd  (Throughput to reach 2,500 tpd by late November(1)) Remain on track to achieve production ramp to >150,000 ozs by 2014 at cash costs under US$700/oz (incl. royalties)(1)  Strong growth expected in 2013 and again in 2014(1)  Mill to reach 3,000 tpd during Q2/13(1) Advance projects and realize exploration upside  Current drilling focused on expanding Timmins West Mine and advancing other projects/properties Maintain strong balance sheet  $76 million of cash and bullion (November 6, 2012)  Manage expenditures in relation to cash and capital resources (1) Examples of forward-looking information 4
  5. 5. LSG – 2012 YTD Financial Highlights Q3/12 9 Months Commercial gold sales (ozs) 20,450 59,802(1) Average price (US$/oz) $1,665 $1,649 Commercial gold sales ($M) $33.7 $99.0 Cash earnings from ops ($M) $13.2 $26.3 Capital expenditures $39.5 $131.8  Cash earnings from operations increased 45% from Q3/11, 9M cash earnings up 71% from 2011 level  2012 capital expenditures tracking to target of $170- $175M(2) (1) Total gold sales in 9M/12 of 63,839 ozs (2) Example of forward looking information 5
  6. 6. Strong Cash Position at Year-End 2012 Sources of Cash $ millions Cash and bullion inventory (Sept. 30, 2012) 90.0 Q4/12 operating cash flow(1) 18.0 Total sources of cash (to end of 2012) 108.0 Additional liquidity (standby line) 35.0 Total liquidity at end of 2012 143.0 Uses of Cash (Estimates for Q4/12)(1) $ millions Estimated project spending 42.0 Exploration 1.5 Corporate G&A 3.5 Financing costs 1.6 Total uses of cash 48.6 (1) Examples of forward-looking information 6
  7. 7. LSG – 2012 YTD Operating Highlights Q3/12 9 Months 2012 Target Gold poured 20,665 61,143 Over 85,000 ozs Total tonnes 193,999 537,723 Record mill performance in Q3, Average grade 3.5 3.7 2,108 tpd, 97.1% recoveries Total production(1) 20,939 62,048 Grade reflected Cash costs produced deferral of high-grade 105 112 stopes (C$/tonne) Cash cost per tonne Cash costs produced $985 $970 better than expected, (US$/oz)(2) Per ounce cash costs reflect lower grades (1) Q3/12 includes 16,054 ozs (146,958 tonnes @ 3.5 gpt) from Timmins Mine and 4,884 ozs (46,041 tonnes @ 3.3 gpt) from Bell Creek 7 (2) Before royalties of $31 and $27 per ounce for Q3 and 9M/12, respectively
  8. 8. Timmins West Mine Timmins Deposit Thunder Creek Timmins Deposit Thunder Creek9M/12 Work Program 200 Level Total of 6,820 m of capital development completed YTD 300 Level 60% of development at Thunder Creek – focused on ramping above and below 730L, excavation of infrastructure & raise 650 Level development 2012 Work 2012 Work Program* Timmins Deposit 730 Level Program* development focused on ramping to 750L, connecting ramp to shaft bottom, establishing infrastructure on 670L, Conceptual view - full development 690L, 710L of current resources and 730L *Examples of Forward Looking Statements.8 8
  9. 9. Timmins West Mine – YTD 2012 Drilling 85,000 metres of infill & delineation drilling 650 DDr. completed YTD 47,000 m at Timmins Deposit upgrading resources from 650L to 800L and drilling to 730 DDr. 7.5m centres between 710 L and 730L 750 DDr. 38,000 m at Thunder Creek focused on upgrading resources from 600L to 800L and drilling to 15m centres in near-term Timmins Deposit blocks between 695L and 765L Drilling at both Timmins Deposit and Thunder Creek intersecting high-grade 680 DDr. 710 DDr. mineralization outside existing resource 715 DDr. Kilt Zone 765 DDr. Thunder Creek 9
  10. 10. TWM – Timmins Deposit – By End of 2012 Timmins Deposit Timmins Deposit  Complete ramp development to connect Lower Timmins Deposit from 470L to 790L  Two stoping blocks in UM Complex between 650L and 730L completed, two additional blocks pending  Remainder of stoping in UM1 Zone between 545L and 585L completed  Complete mining of Main Zone from the Upper Mine 10
  11. 11. TWM – Thunder Creek – By End of 2012 Thunder Creek Thunder Creek  Connect ramp in Lower mine from 660L to 765L  Develop ramp in Upper TC to the 395L  Complete 2 stopes from Upper TC & 4 stopes from Lower TC 11
  12. 12. TWM – Grades Reconciling Well 43‐101 BLOCK MODEL GEOTRACKER (MUCKS) MILL PROCESSED Zone Mining Levels Tonnes Grade oz Tonnes Grade oz Tonnes Grade 0z Total FW 525_480 Block model 109,436 2.28 8,039 104,620 2.43 8,187 117,131 2.48 9,326 Total UM1 650_565 Block model 295,188 6.08 57,720 307,233 6.56 64,821 309,673 6.05 60,217 Total UM1a 650_630 Block Model 31,488 4.57 4,628 23,210 5.76 4,295 30,726 4.60 4,543 Total  UM2 650_610 Block Model 53,866 3.22 5,578 44,158 4.10 5,820 50,159 3.76 6,060 Total 489,978 4.82 75,965 479,221 5.40 83,124 507,688 4.91 80,146 12
  13. 13. Shaft Shaft Mined out Bell Creek Mine areas 1,231m of development completed - North A Deep ramp reached 595L (total vertical Recent mining advance of 95m) 610mL 625mL 610L exploration drift collared Drilling target from 535mL 775mL by end of Q3/12 Drilling target from 610mL Development for upper stope 1000mL complexes continued (NA Deep North A and North A East) “Deep” 21,000 m of drilling completed, mainly focused on NA Deep and associated FW and HW structures By year end, complete 610L drill drift, commence mining upper NA Deep, North B & NA East (285L-300L), develop escapeway 490L to 385L (1) Examples of Forward Looking Statements. (1) Examples of Forward Looking Statements 13
  14. 14. Timmins West Mine – 3D Model Looking WestB TW Shaft Ramp A 200 Level Rusk Shear 300 Level Rusk Zones Bristol FaultThunder Creek New  results outside  Stock 730 Level 650 Level current resource at 750Lv: Porphyry Zones 750‐005: 7.5gpt/21.0m A Holme Sh 750‐006: 7.3gpt/17.1m ear r Zo ne 650‐223: 10.3gpt/39.5m Mafic volcanics incl 58.0gpt /3.0m         Timmins Mine Turbidites, felsic volcanic deposit 50m west extension to Rusk  Pyroxenite (AIC) zone at 765 Lv Syenite, monzonite 15.8gpt/5.8m B 10.5gpt/ 3.4m e D3 shear zone on rZ 6.8gpt/5.7m ea 0 400 Sh meters UM Complex sk Thunder Creek Ru Rusk East-west “Greenstone Nose” Shear Zone **Selected drill results, Not true widths 14
  15. 15. Timmins Deposit – UM & FW Zones 150m wide  Schematic Section Deformation Corridor 15
  16. 16. Thunder Creek – Schematic Section 200m wide Corridor 16
  17. 17. Bell Creek – YTD Delineation Drilling Campaign 535 mL BC535-669 635 mL BC535-670 ‐669, NA_D      7.37/5.8m Hole BC535 ‐670, NA_D     Hole BC535 7.30/6.0m BC535-671 ‐671, NA_D         10.59/4.5m Hole BC535 Bell Creek Cross Section ‐672, NA_D Hole BC535 3.06/11.5m Section 5800 E +/- 7 m Looking West- North A ‐673, NA_D Hole BC535 6.93/9.2m BC535-672 2012 YTD Drilling BC535-673 17
  18. 18. Recent exploration focused on Timmins West Complexrefinement of geological models, investigation of new prospects Thunder Creek – 144 Trend Thunder  Timmins 144 Creek Mine 2,000 Lv 18
  19. 19. Highway 144 ProjectNew 10,000 meter drill program Ongoing • Targeting continuation of Thunder Creek  structure to  the SW along volcanic – sedimentary  contact  Thunder Creek • 5 holes  (4,000m) completed in Q3 and 9 holes  (7,500m) to date. 5 in the “Gap” and 4 in the SW  extension.  “Gap” holes are widely spaced and targeting  the 650 Lv.   SW extension holes  are targeting Hwy‐11‐ 28 area between 275 and 600m. • Results pending but observations to date indicate  general shallowing of mafic‐sediment contact , multiple  lenses of syenite, strong local alteration and quartz  144 North veins.   Drill core from Thunder Creek and 144 Projects TC07‐36: 63 gpt/0.60m 144 South HWY‐11‐11 16.60 gpt/0.50m 19
  20. 20. SW Extension of 144 and TC-144 GapTargets144SW  144 South Thunder Timmins 144 North TC‐144 Gap Creek Mine Open 1.5km1km Lv Syenite Intrusives * View looking to west 20
  21. 21. Timmins West Complex – Gold River Trend Gold River Trend Resources  Tonnes    Grade  Ounces (millions)  (gpt) Indicated        0.69        5.29       117,400 Inferred           5.27        6.06      1,027,800     Open800 Lv 10.46gpt/9.0m 5.52gpt/5.4m18.48gpt/4.0m 8.71gpt/1.0m 8.44 gpt/1.0m 1.03 gpt 118m incl 2.56 gpt /19m Open Open 2,000 Lv 21
  22. 22. Fenn-Gib – Expanding in All Directions, NewTargets Identified Current Resource Pit New Pit  Outline 22 22
  23. 23. Mill Expansion – Increasing Capacity by 50% Crusher 6,000 tonne Ore bin SAG Mill Building Truck Dump New CIL Tanks New Thickener Mill operating very well: 2,108 tpd, recoveries 97.1% (Q3/12) First shutdown completed in October: Current throughput 2,300 tpd 2nd shutdown to increase throughput to 2,500 tpd in late Nov., capacity to grow to 3,000 tpd during Q2/13 Total budget of approx. $100M (Spend to Sept 30/12: $75.8M) Further expansion contemplated to 5,500 tpd(1) (1) Examples of Forward Looking Statements. 23
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  28. 28. To Create Value, LSG Is Focused On(1) ….. Delivering strong Q4/12 results – Over 85,000 ozs for full-year 2012 Remaining on track to achieve near-term priorities  Strong production growth in 2013  >150,000 ozs by 2014 with cash costs below US$700/oz (including royalties) Advancing projects and realizing exploration upside  Continue drilling to grow Timmins West Mine and advance other projects/properties Maintaining strong balance sheet TSX, NYSE MKT: LSG (1) Examples of Forward Looking Statements. 28