Lake Shore Gold Corp. (TSX:LSG)(NYSE Amex:LSG) (Lake Shore Gold or the Company) today reported that the Company has closed its previously announced royalty and equity investment agreements (the Agreements) with Franco-Nevada Corporation (TSX:FNV)(NYSE:FNV) (Franco-Nevada). Under terms of the Agreements, Franco-Nevada has paid to the Company US$35 million for a 2.25% net smelter return royalty on the sale of minerals from the Company's Timmins West Complex. In addition, Franco-Nevada has paid C$15 million to acquire 10,050,591 common shares of the Company on a private placement basis.
Tony Makuch , President and CEO of Lake Shore Gold, commented: We are pleased to have completed this transaction and to welcome Franco-Nevada as a new shareholder of the Company. With the funds we have received, our pro forma cash position at the end of February stood at approximately $95 million, which provides significant financial flexibility as we prepare for a sharp increase in production beginning late this year.
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 and around the century-old Timmins Gold Camp . The Company is in commercial production at the Timmins West Mine, comprising the Timmins and Thunder Creek deposits, and is progressing with an underground advanced exploration program at its Bell Creek Mine. Mine production is delivered to the Company's wholly owned mill (located on the Bell Creek Property east of Timmins) which is operational at a capacity of 2,000 tonnes per day and is currently being expanded to 3,000 tonnes per day with completion targeted for late 2012. The Company continues to invest aggressively in exploration at its multiple properties in and around the Timmins Camp. The Company's common shares trade on the TSX and NYSE Amex under the symbol LSG.
Certain statements in this press release 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 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 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 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.
FOR FURTHER INFORMATION PLEASE CONTACT: Lake Shore Gold Corp. Tony Makuch President & CEO (416) 703-6298
Lake Shore Gold Corp. Mark Utting Vice-President, Investor Relations (416) 703-6298 email@example.com www.lsgold.com
Source: Lake Shore Gold Corp.