fourth quarter 2011

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Q4 & Year End 2011 Lake Shore Gold Conference Call March 27, 2012 TSX, NYSE Amex: LSG Lake Shore Gold

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Page 1: Fourth Quarter 2011

Q4 & Year End 2011 Lake Shore Gold Conference Call March 27, 2012TSX, NYSE Amex: LSG

Lake Shore Gold

Page 2: Fourth Quarter 2011

Certain statements in this presentation relating to the Company's expected production levels, production growth, exploration activities,potential for increasing resources project expenditures and business plans are "forward looking statements" or "forward looking

Forward Looking Statements 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 theUnited 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 representmanagement's best judgment based on current facts and assumptions that management considers reasonable, including that operating andcapital plans will not be disrupted by issues such as mechanical failure, unavailability of parts, labour disturbances, interruption in transportationor utilities, or adverse weather conditions, that there are no material unanticipated variations in budgeted costs, that contractors will complete, , p g , pprojects according to schedule, and that actual mineralization on properties will be consistent with models and will not be less than identifiedmineral reserves. The Company makes no representation that reasonable business people in possession of the same information would reachthe same conclusions. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause theactual results, performance or achievements of the Company to be materially different from any future results, performance or achievementsexpressed or implied by the forward-looking statements. In particular, delays in development or mining and fluctuations in the price of gold or incurrency markets could prevent the Company from achieving its targets. Readers should not place undue reliance on forward-lookingt t t M i f ti b t i k d t i ti ff ti th C d it b i i il bl i th C ' t tstatements. 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 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 Controlsamples consisting of 1 blank, 1 certified standard and 1 reject duplicate are inserted into groups of 20 drill core samples. The blanks and thecertified standards are checked to be within acceptable limits prior to being accepted into the GEMS SQL database. Routine assays have beencompleted using a standard fire assay with a 30-gram aliquot. For samples that return a value greater than three grams per tonne gold onexploration projects and greater than 10 gpt at the Timmins mine and Thunder Creek underground project, the remaining pulp is taken and fireassayed with a gravimetric finish. Select zones with visible gold are typically tested by pulp metallic analysis on some projects. NQ size drill coreis 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 istransported in security-sealed bags for preparation at ALS Chemex Prep Lab located in Timmins, Ontario, and the pulps shipped to ALS ChemexAssay Laboratory in Vancouver B C ALS Chemex is an ISO 9001 2000 registered laboratory preparing for ISO 17025 certificationAssay Laboratory in Vancouver, B.C. ALS Chemex is an ISO 9001-2000 registered laboratory 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 diamonddrilling projects at the Timmins deposit surface; Thunder Creek, Gold River Trend and 144 properties; Bell Creek Mine; and Casa Berardioptioned property are Jacques Samson, P.Geo., Stephen Conquer, P.Geo, and Keith Green, respectively. Dean Crick, P.Geo. is the QP for theTimmins deposit and Thunder Creek underground drilling projects, and Bob Kusins, P.Geo., is the QP for resource estimation at all of theCompany’s properties. As QPs, Messrs. Samson, Conquer, Green, Crick and Kusins have prepared or supervised the preparation of thescientific or technical information for their respective properties as provided in this presentation. Messrs., Samson, Conquer, Kusins, Crick andGreen are employees of the Company.

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Page 3: Fourth Quarter 2011

LSG: Good Progress in 2011

Doubled production to 86,565 ounces poured

Finished year strong with >26 000 ozs poured inFinished year strong with >26,000 ozs poured in Q4/11

D bl d f d tiDoubled resources for second consecutive yearo Initial resources for Thunder Creek, Fenn-Gib,

V l d M lhillVogel and Marlhill

Commenced 50% mill expansion – remains on track

Continued to achieve significant exploration success

3 *Examples of Forward Looking Statements.

Page 4: Fourth Quarter 2011

W k l f d i i i d illi it

LSG: Turning to 2012* Work plan focused on ramping up mining and milling capacity to 3,000 tonnes per day by late 2012

Work at Timmins West Mine and Bell Creek in first half 2012Work 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 2012Mill 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 per ounceg $ $ p

First Quarter 2012: expected production of approx. 15,000 ounces, cash costs US$1,450 per oz, to improve as

4 *Examples of Forward Looking Statements.

production ramps up

Page 5: Fourth Quarter 2011

LSG: Turning to 2012* Capital expenditures - $93M Timmins West Mine, $67M mill expansion and other mill improvements

E dit t B ll C k l ti t b dExpenditures at Bell Creek, exploration to be assessed as year progresses

Company funded to develop and bring Timmins West Mine toCompany 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 gsupport other expenditures

5 *Examples of Forward Looking Statements.

Page 6: Fourth Quarter 2011

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 TrendUpdated resource for Gold River TrendTotal ounces nearly tripled and grade doubledIndicated: 117,400 ozs (690,000 tonnes @ 5.29 gpt)( @ gp )Inferred: 1,027,800 ozs (5,273,000 tonnes @ 6.06 gpt)

Timmins West Mine PEATimmins West Mine PEA Demonstrates potential for substantial cash flows, attractive returns and favourable economics

6 *Examples of Forward Looking Statements.

Page 7: Fourth Quarter 2011

LSG: 2011 Operating Highlights

Q4/11 2011G ld d 26 550 86 565Gold poured 26,550 86,565

Total tonnes 186,231 671,467

Average grade 4 03 4 34Average grade 4.03 4.34

Total Production 24,809 82,585

Cash Costs* ($/t) (Timmins Deposit) 102 95

*Denotes a non-GAAP measure

Cash Costs ($/t) (Timmins Deposit) 102 95

Cash Costs* (US$/oz) (Timmins Deposit) 762 811Denotes a non-GAAP measure.

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Page 8: Fourth Quarter 2011

LSG: 2011 Financial Highlights Q4/11 2011Q4/11 2011

Gold sold (oz) 21,956 91,468Average price (US$/oz) 1 687 1 546Average price (US$/oz) 1,687 1,546Proceeds from gold sales ($M) 37.8 140.2Proceeds from commercial gold sales ($M) 14.8 66.2Cash earnings from operations*

$ millions 8.1 31.7Net lossNet loss

$ million$ per share

5.50.01

10.90.03

*Denotes a non-GAAP measure.

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Page 9: Fourth Quarter 2011

LSG: 2011 Expenditures

2011Projects 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 2012

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in February 2012

Page 10: Fourth Quarter 2011

Timmins Deposit Timmins Deposit Thunder Creek Thunder Creek

200 Level200 Level

Timmins West MineTimmins West Mine

Timmins and 200 Level200 Level

300 Level300 Level

Timmins and Thunder Creek deposits combined

Initial ThunderInitial Thunder Creek resource released Nov. 2011

Updated Timmins

650 Level650 Level

730 Level730 Level2012 Work 2012 Work 2012 Work2012 Work

Updated Timmins deposit resource February 2012

PEA first evaluation 730 Level730 LevelProgram*Program*

2012 Work 2012 Work Program*Program*of fully integrated

operation

Conceptual view - full development

*Examples of Forward Looking Statements.

of current resources

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Page 11: Fourth Quarter 2011

Timmins Deposit Setting Ourselves Up

545L 

565L g pFor Rapid Growth

585L 

610L

In 2012:Ore delineation and 610L 

Shaft 650L 

Ore delineation and infrastructure focus during early part of yearProduction weighted to

670L 

690L 

Production weighted to H2/12* Typical 

stoping blocks 

710L 

730L 

750L 

11

790L 

810L *Examples of Forward Looking Statements.

Page 12: Fourth Quarter 2011

Timmins Deposit Setting Ourselves Up

545L 

565L g pFor Rapid Growth

585L 

610L

In 2012:Ore delineation and 610L 

Shaft 650L 

Ore delineation and infrastructure focus during early part of yearProduction weighted to

670L 

690L Going forward:

R d f t i th

Production weighted to H2/12* Typical 

stoping blocks 

710L 

730L 

• Ready for stoping on three new levels

• Four additional levels d

750L accessed

12

790L 

810L *Examples of Forward Looking Statements.

Page 13: Fourth Quarter 2011

Thunder Creek Deposit Setting Ourselves UpSetting Ourselves Up For Rapid Growth In 2012:

Thunder Creek Lower Mine

Extensive ramping, ore delineation and infrastructure work

660L Stope production weighted to H2/12*

695L 

730L730L 

765L 

i l i

800L 13

Typical stoping block 

*Examples of Forward Looking Statements.

Page 14: Fourth Quarter 2011

Thunder Creek Deposit Setting Ourselves UpSetting Ourselves Up For Rapid Growth In 2012:

Thunder Creek Lower Mine

Extensive ramping, ore delineation and infrastructure work

660L Stope production weighted to H2/12*

Going forward:695L 

730L

Going forward: • Development advanced

on four levels• Multiple stoping blocks 730L 

765L 

i l i

• Multiple stoping blocks accessible

800L 

Typical stoping block 

14 *Examples of Forward Looking Statements.

Page 15: Fourth Quarter 2011

Bell Creek Complex2012 ork plan for

Bell Creek Mine Mined out areas

R t

Shaft

2012 work plan for Bell Creek Mine focused on

Recent mining

establishing new mining complex (475 L and 600 L)*

North A“Deep”

L and 600 L)

15*Examples of Forward Looking Statements. Conceptual view of planned work in 2012

Page 16: Fourth Quarter 2011

Processing – Expanding Mill to Meet GrowthMill continues to perform wellMill continues to perform well

Recoveries of 96.1% in 2011

E d d 2 000 t d it iExceeded 2,000 tpd capacity in Q4/11

Expansion to 3 000 tpd to beExpansion to 3,000 tpd to be completed by late 2012*

Total cost of expansion $61Total cost of expansion $61 million in 2012* ($22.6 million spent in 2011)

16 *Examples of Forward Looking Statements.

Page 17: Fourth Quarter 2011

Timmins West Mine – PEA (Feb. 28, 2012)

PEA Disclaimer:PEA Disclaimer:The Timmins West Mine PEA is preliminary in nature. It includes inferred mineral

1717

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 be realized.

Page 18: Fourth Quarter 2011

Timmins West Mine – Production & Costs*Average annual production 140 000 ozs cash costs US$625/ozAverage annual production 140,000 ozs, cash costs US$625/oz (exchange rate at par)Expected average head grade of 5.2 grams per tonneY 3 9 A d ti f 160 000 h t US$590/Years 3 – 9: Average production of 160,000 ozs, cash costs US$590/oz

18*Examples of Forward Looking Statements. See PEA disclaimer

Page 19: Fourth Quarter 2011

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 pricing2g

• 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:Significant opportunities for project enhancement:Reducing capital and operating costsIncreasing throughput levelsIncreasing throughput levelsIncreasing resources

19

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.

*Examples of Forward Looking Statements. See PEA disclaimer

Page 20: Fourth Quarter 2011

Exploration Review  2011 drill program2011 drill program 

• 176,000 metres• $32.1 million 

Focus in 2011 was on establishingFocus in 2011 was on establishing and updating resources and exploring for extensions and new discoveriesdiscoveries2012 program focused on drilling to support operations and exploring k t t TW d BC F Gibkey targets: TW and BC, Fenn‐Gib, GRT and 144

20 drills currently active10 Underground (TWM & BC)2 Gold River Trend (surface) 1 144 property (surface)3 Bell Creek (surface)4 Fenn‐Gib (surface)

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Page 21: Fourth Quarter 2011

Measured & Indicated Tonnes Au Grade (g/t) Contained Ounces

LSG ResourcesMeasured & Indicated Tonnes Au Grade (g/t) Contained Ounces

Timmins West 5,826,000 5.99 1,122,500Gold River Trend 690,000 5.29 117,400Bell Creek Mine* 1,790,000 4.36 251,200

Vogel 2,219,000 1.75 (OP) 125,000Marlhill 395,000 4.52 57,400

Fenn Gib 40,800,000 0.99 (OP) 1,300,000Total 2,973,500

I f d T A G d ( /t) C t i d OInferred Tonnes Au Grade (g/t) Contained Ounces

Timmins West 4,272,000 5.76 791,500Gold River Trend 5,273,000 6.06 1,027,800Bell Creek Mine* 8,427,500 4.40 1,192,900

Vogel 1,459,000 3.60 (some OP) 168,800Fenn Gib 24,500,000 0.95 (OP) 750,000

Total 3,931,000

* Updated NI 43-101 resource pending OP – Open Pit21

Page 22: Fourth Quarter 2011

Timmins Deposit Timmins Deposit Thunder Creek Thunder Creek

200 Level200 Level

Timmins West MineTimmins West Mine

200 Level200 Level

300 Level300 Level

Timmins Deposit600,900 ozs (2,949,000 tonnes @ 6.34 gpt) in Indicated281,500 ozs (1,579,000 tonnes @ 5.54 gpt) in Inferred

Th d C k650 Level650 Level

730 Level730 Level

Thunder Creek 521,600 ozs (2,877,000 tonnes @ 5.64 gpt) in Indicated 730 Level730 Level510,000 ozs (2,693,000 tonnes @ 5.89 gpt) in Inferred

Conceptual view - full development

Timmins West MineTimmins West Mine1,122,500 1,122,500 ozsozs (5,826,000 (5,826,000 tonnestonnes@ 5.99 @ 5.99 gptgpt) Indicated) Indicated

*Examples of Forward Looking Statements.

of current resources

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791,500 791,500 ozsozs (4,272,000 (4,272,000 tonnestonnes @ @ 5.76 5.76 gptgpt) Inferred) ) Inferred)

Page 23: Fourth Quarter 2011

Gold River Trend – Updated Resources Total ounces nearly tripled and grade doubledTotal ounces nearly tripled and grade doubledIndicated: 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

23 *Examples of Forward Looking Statements.

Page 24: Fourth Quarter 2011

Fenn-Gib* P t ti l l lPotential large-scale, open-pit mine

40.8M tonnes @ 0.99 gpt for 1.3M ozs Indicated

24.5M tonnes @ 0.95 gpt for 0.75M ozs Inferredfor 0.75M ozs InferredExcellent exploration potential, expect to increase resourcesincrease resources

24*Examples of Forward Looking Statements.

Page 25: Fourth Quarter 2011

LSG: Near-Term Catalysts*

Updated resource for Bell Creek

Updated reserve for Timmins West MineUpdated reserve for Timmins West Mine

Filing of NI 43-101 reports for Gold River Trend and Timmins West Mine (including TWM PEA)West Mine (including TWM PEA)

Mill expansion completed late 2012

25 *Examples of Forward Looking Statements.

Page 26: Fourth Quarter 2011

LSG: Three Multi-Million Ounce Gold Complexes in Century Old Timmins CampComplexes in Century-Old Timmins Camp

Bell Creek Complex

Destor-Porcupine Fault

TimminsCity of Timmins

Timmins West Complex

Fenn-Gib

Strong production growth expected in 2013*Cash costs to improve as production ramps up*Large and growing resource base to drive future growthLarge and growing resource base to drive future growth Excellent opportunities to enhance existing projects, discover and develop new depositsP t ti l f i ifi t f h fl b i i t 18 th *Potential for significant free cash flow beginning over next 18 months*

26 *Examples of Forward Looking Statements.