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TORONTO, ONTARIO--(Marketwire
- February 28, 2011) - Lake Shore Gold Corp. (TSX:LSG) ("Lake
Shore Gold" or the "Company") today announced that the
Company has finalized a US$50 million, three-year corporate revolving
credit facility (the "Facility") with UniCredit
Bank AG ("UniCredit" or the
"Bank"). The Facility is intended to provide the Company with
financial flexibility with any amounts drawn to be used for capital
expenditures related to the Company's projects, principally its Timmins
Mine, Thunder Creek, the Bell Creek Complex and Bell Creek Mill, and
for general corporate purposes. The cost of the Facility, including
structuring fees, is expected to average between 5.0%
to 6.0% on drawn amounts over the term of the facility based on current
interest rates. There is no hedging requirement related to the
Facility.
Tony Makuch, President and CEO of Lake Shore
Gold, commented: "We are very pleased with the support we received
from UniCredit following a thorough due
diligence review and look forward to working with the Bank as we
advance our projects. We already have a strong balance sheet and are
well positioned to fund our expenditure program, through which we
expect to significantly grow both production and resources. The
Facility augments our existing capital strength at a very low cost of
capital and provides valuable flexibility to fund our growth regardless
of the market environment and to also consider potential new
opportunities.
"Looking at our growth profile, we are on track to nearly triple
gold production in 2011, to 125,000 ounces, and to achieve continued
growth over the next several years as we further expand milling
capacity and move forward with development of Thunder Creek and Bell
Creek. In addition, with an initial resource for Thunder Creek targeted
for later this year, and updates to resources at Timmins Mine, Bell
Creek and Gold River Trend anticipated for early next year, we also
expect to significantly grow our total resource base in the short term.
Our exploration budget this year is $31 million, which reflects our
belief that the potential exists to establish, develop and mine
multiple large-tonnage deposits along the western extension of the
Timmins Gold Camp and at our Bell Creek Complex."
About Lake Shore Gold
Lake Shore Gold is a rapidly growing mining company with a vision to
become a mid-tier gold producer through the successful exploration,
development and operation of its properties in the Abitibi Greenstone
belt in Northern Ontario and Quebec, starting with its strong base in
Timmins, Ontario. In Timmins, the Company is in commercial production
at the Timmins Mine, has intersected underground, and is developing
along, mineralization at the adjacent Thunder Creek deposit and is
advancing an underground advanced exploration program at its Bell Creek
Mine. Mine production is delivered to the Company's mill (also located
in Timmins), which has been refurbished and currently has an operating
capacity of 2,000 tonnes per day. The Company
continues to invest aggressively in exploration in the Timmins Camp and
in its other properties in Northern Ontario and Quebec, and owns a
large and prospective land position in Mexico. The Company's common
shares trade on the TSX under the symbol LSG.
About UniCredit
UniCredit has been an active mining finance
house for over 20 years catering to the needs of its diverse and broad
client base. Its deep rooted industry and sector knowledge, coupled
with its expertise in complementary banking and risk management services,
makes UniCredit a strong partner in financing
the mining and metals industries. UniCredit
is a major international financial institution with strong roots in 22
European countries as well as representative offices in 27 other
markets, with approx. 10,000 branches and 160,000 employees.
Forward-looking Statements
Certain statements in this press release relating to the Company's
production growth, exploration activities, potential for increasing
resources, project expenditures and business plans are
"forward-looking statements" within the meaning of securities
legislation. The Company does not intend, and does not assume any
obligation, to update these forward-looking statements. These
forward-looking statements represent management's 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 projects according to schedule, and that actual mineralization
on properties 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, 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. More information about risks and
uncertainties affecting the Company and its business is available in Lake
Shore Gold's most recent Annual Information Form and other regulatory
filings which are posted on sedar at www.sedar.com.
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