Denver Gold Forum presentation

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Information about Denver Gold Forum presentation

Published on September 21, 2015

Author: Lake_Shore

Source: slideshare.net

1. TSX, NYSE MKT: LSG Lake Shore Gold TSX: LSG NYSE MKT: LSG L AKE SHORE GOL D CORP. Denver Gold Forum September 20 – 23, 2015

2. Information included in this presentation relating to the Company's 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-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 be consistent with models and 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, delays in development or mining and 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. QUALITY CONTROL Lake 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 samples consisting 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 are checked to be within acceptable limits prior to being accepted into the GEMS SQL database. Routine assays have been completed using a standard fire assay 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 the Timmins mine and Thunder Creek underground project, the remaining pulp is taken and fire assayed with a gravimetric finish. Select zones with visible gold are 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. The remaining 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 Lab located in Timmins, Ontario, and the pulps shipped to ALS Chemex Assay Laboratory in Vancouver, B.C. ALS Chemex is an ISO 9001-2000 registered laboratory preparing for ISO 17025 certification. QUALIFIED PERSON Scientific and technical information related to mine production and reserves contained in this presentation has been reviewed and approved by Natasha Vaz, P.Eng., Vice- President, Technical Services, who is an employee of Lake Shore Gold Corp., and a “qualified person” as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). Scientific and technical information related to resources, drilling and all matters involving mine production geology, as well as exploration drilling, contained in this presentation, or source material for this presentation, was reviewed and approved by Eric Kallio, P.Geo., Senior Vice-President, Exploration. Mr. Kallio is an employee of Lake Shore Gold Corp., and is a “qualified person” as defined by NI 43-101. Forward-Looking Statements

3.  Two producing mines and a central mill in Timmins, Ontario, Canada • Timmins West Mine • Bell Creek Mine & Mill  Large land position in right geology  Strong organic growth • Large resource base, exploration upside LSG: Low-Cost Canadian Gold Producer Timmins, Ontario  Over 70M ozs Au of mined resources to date  Favourable geology  Supportive government  Part of Abitibi Greenstone Belt Timmins Canada

4. $25 $37 $28 $21 $36 $26 ($14) ($13) ($14) ($16) ($13) ($11) $11 $24 $14 $5 $23 $16 $1,430 $1,404 $1,397 $1,360 $1,504 $1,470 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Operating Cash Flow Capex Net Cash Flow Realized Gold Price (C$/oz) HISTORICAL FINANCIAL PERFORMANCE (C$ MM)LAKE SHORE GOLD PERFORMANCE Lake Shore Gold has outperformed both spot gold and the gold index in a challenging market environment LSG – Strong Returns and Cash Flows -- 10 20 30 40 50 -- $0.30 $0.60 $0.90 $1.20 $1.50 31-Dec-13 31-May-14 31-Oct-14 31-Mar-15 31-Aug-15 Volume(millions) SharePrice(C$) Volume LSG Share Price Gold Price (Indexed) S&P/TSX Global Gold (Indexed)

5. A Quality Gold Company Solid Operating Performance Strong Internal Cash Flow Attractive Projects & Exploration Upside People Financial Strength Exploration In a World-Leading, Low-Risk Jurisdiction Infrastructure Growth

6. Hollinger/McIntyre 32M ozs @ 9.8 gpt Dome 24M ozs @ 6.9 gpt LSG Timmins West Complex LSG Bell Creek Complex Mattagami River Fault Timmins Destor-Porcupine Fault Zone (DPFZ) Historic Timmins Gold Camp >70 M oz of gold production TimminsDeposit Thunder Creek Deposit 144 Gap Zone Discovery 144 Gap Zone SW Discovery 144 North 144 South Gold River West & East  Continuation of DPFZ extends camp to west of Timmins  Bell Creek Complex situated along New Mine Trend  Historic camp, both LSG complexes centred around large sedimentary basins LSG – Land Position on the Western Extension of the PDFZ Bell Creek Mine Whitney Project Marhill Vogel Hoyle Pond 3M ozs @ 13.0 gpt

7. 2012 2013 2014 2015 85,800 134,600 160,000 180,000 180,000 185,600 (Actual)  Record production of 185,600 in 2014  95,600 oz produced in H1/15, guidance revised to at least 180,000 oz • Previous guidance: 170,000 to 180,000 oz  Three consecutive years of meeting or beating guidance Guidance Guidance(1) (1) Contains Forward-looking Information 95,600 oz (H1/15) Solid Production - @ 635,000 Oz Produced Since Development Began

8. 135 220 355 540 635 0.82 0.93 0.60 0.77 3.37 3.40 2.99 2.96 3.69 3.47 3.33 2.84 100 200 300 400 500 600 700 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 2011 2012 2013 2014 2015 Cumulative Production Reserves M&I Resources Inferred Resources Reserves Similar to Pre-Commercial Production Levels Despite >Half Million Oz Produced (End of 2014) Last Resource & Reserve Estimates dated Dec. 31/14 Strong Track Record for Replacing Reserves Mine Ounces (Millions) Ounces (Thousands)

9. 0 200 400 600 800 1000 2012 2013 2014 H1/15 966 766 592 551 Cash Operating Costs(1)(2) (US$/Ounce) Low Unit Costs (1) Example of Non-GAAP measure, see Slide 23 for more information (2) Contains Forward-looking Information  2015 guidance revised to <US$950/oz from between US$950 and US$1,000  2015 guidance revised to <US$650/oz from between US$650 and US$700 <650 Guidance 775 675 0 500 1,000 1,500 2,000 2012 2013 2014 H1/15 1,813 1,139 872 809 All-In Sustaining Costs(1)(2) (US$/Ounce) 1,050 950 Guidance <950 (2015 Guidance) (2015 Guidance)

10. Lake Shore Gold – Established Quality Operations  Large-scale mining complex with multiple deposits • Timmins Deposit • Thunder Creek • Gold River  Timmins West Mine: 142.2k oz in 2014, 75.0k oz in H1/15  509.7k oz in reserves (3.7M tonnes at 4.3 grams per tonne)  Two major discoveries at 144, exploration upside along 144 Trend Lake Shore Gold: an established low-cost producer, generating free cash flow and a leading growth story TIMMINS WEST COMPLEX BELL CREEK COMPLEX - MINE BELL CREEK COMPLEX – MILL  Produced 43.4k oz in 2014, 20.6k oz in H1/15  More than doubled reserves in Mar. ’15 to 263.6k oz (1.8M tonnes at 4.6 grams per tonne)  Underground exploration program focused on increasing reserves and resources and further extending mine life  Significant resource potential at depth  Conventional gold mill circuit, involving crushing and grinding, gravity and leaching, followed by CIL and CIP processes for gold recovery • Achieved recoveries of 96.7% in H1-15 (consistently above 95%)  Processed 1,245,000 tonnes in 2014, 627,000 tonnes in H1/15

11. 0 10 20 30 40 50 60 70 80 90 15 34 39 53 67 62 77 84 Change in Cash & Bullion ($ Millions) Strong Growth in Cash Position

12. Senior Secured Debt Fully Repaid 0 10 20 30 40 50 60 70 60 52 49 35 31 7 3 0 Senior Secured Debt ($ Millions) Senior Secured Debt Fully Repaid as of May 29, 2015

13. Timmins West Complex Potential for Multiple Gold Deposits Timmins West Mine 144 Gap Zone Discovery (Within 500 m of Thunder Creek) Near-Term Exploration Targets Gold River Trend TC–144 Trend Gold River Project M&I: 690k tonnes @ 5.3 gpt (117k oz) Inferred: 5.3M tonnes at 6.1 gpt (1.0M oz) Timmins Deposit Thunder Creek 144 North 144 South 144 Gap SW Zone Discovery (Within 200 m of 144 Gap Zone) 144 Gap

14. H2/15: U/G Infill Drilling at 144 Gap & Surface Drilling at 144 SW Zone, 144 North & 144 South  Exploration success continues at 144 Gap Zone • Expenditures of C$11.4 million in H1/15 • 85,400 m drilled from surface • Exploration drift extended 1,020 m (H1/15) • Second gold discovery – 144 Gap SW Zone Upcoming Catalysts  Additional drill results –144 Trend • Completion of exploration drift • 40,000 m U/G drilling H2/15 • @ 55,000 m surface drilling – 144 Gap SW Zone – 144 North – 144 South 144 GAP & 144 GAP SW ZONES DISCOVERED CLOSE TO THUNDER CREEKOVERVIEW Lake Shore Gold – Continued Exploration Success Two Discoveries at 144: 144 Gap Zone & 144 Gap SW Zone

15.  $25.0M exploration program in 2015 • 140,000 m surface drilling • 40,000 U/G drilling • Exploration drift into 144 Gap Zone (940 m of 1,200 m completed) • New surface geophysical program SW of 144 Gap & western ext. Gold River Key Objectives  First resource 144 Gap Zone early in 2016(1)  Evaluate potential for multiple gold deposits along 144 Trend 144 – 2015 Exploration Targeting First Resource at 144 Gap Zone for Year-End 2015 (Released in Q1/16) (1) Contains Forward-looking Information 2015 EXPLORATION PROGRAM

16.  Intersects multiple zones of high-grade mineralization • Key intercepts: 7.81 gpt/10.40 m, 6.29 gpt//36.8 m, 7.83 gpt/18.8 m, 5.29 gpt/31.8 m, 10.97 gpt/14.40 m, 4.51 gpt/12.90 m, 4.05 gpt/24.5 m, 5.35 gpt/12.0 m & 8.16 gpt/10.30 m  Thunder Creek Stock extended to depth, potential for new zones of gold mineralization  40,000 m U/G drill program on track for completion before end of 2015(1) Underground Drill Program Encouraging Initial Results (Press Release September 16/15) (1) Contains Forward-looking Information FIRST 10 HOLES FROM U/G DRILLING

17. 775 mL 925 mL 1260 mL Bottom of current reserve at 1,165 L 1050 mL 1625 mL Key Target for Recent Drilling Reserves P&P(1): 1,792,000 tonnes @ 4.6 gpt 263,600 oz Resources M&I(2): 4,904,000 @ 4.29 gpt 687,000oz Inferred: 4,399,000 @ 4.84 gpt 685,000ozs Bell Creek Mine – 2015 Exploration (1) Refers to proven and probable (2) Refers to measured and indicated  Commenced near end of Q2/15  32,500 m of U/G drilling  @ 800 metres of development Key Objectives  Accelerate growth in reserves and resources  Provide information to help assess expansion to depth U/G EXPLORATION PROGRAM

18. Temex Transaction Whitney Project – In-Market Acquisition Acquisition Terms  0.105 LSG share per Temex share  @ 20.0M LSG shares to be issued, <5% of shares outstanding

19. Temex Transaction Whitney Project – In-Market Acquisition (1) Lake Shore Gold has not verified the mineral resources disclosed in the technical reports for either the Whitney Project. To the best of Lake Shore Gold’s knowledge, information, and belief, there is no new material scientific or technical information that would make the disclosure of the mineral resources inaccurate or misleading. Whitney Project – Resources(1) Tonnes Grade* Ounces Measured 970,000 7.02 218,100 Indicated 2,300,000 6.77 490,500 Total M&I 3,270,000 6.85 708,600 Inferred 1,000,000 5.34 170,700 * Grams per tonne (1) Lake Shore Gold has not verified the mineral resources disclosed in the technical reports for either the Whitney Project. To the best of Lake Shore Gold’s knowledge, information, and belief, there is no new material scientific or technical information that would make the disclosure of the mineral resources inaccurate or misleading.

20. A Quality Gold Company Solid Operating Performance Strong Internal Cash Flow Attractive Projects & Exploration Upside People Financial Strength Exploration In a World-Leading, Low-Risk Jurisdiction Infrastructure Growth

21. L AKE SHORE GOL D CORP. Denver Gold Forum September 20 – 23, 2015

22. 22 APPENDIX

23. Cash Operating Costs per Ounce Cash operating cost per ounce is a Non-GAAP measure. In the gold mining industry, cash operating cost per ounce is a common performance measure but does not have any standardized meaning. Cash operating costs per ounce are based on ounces sold and are derived from amounts included in the Consolidated Statements of Comprehensive Loss (Income) and include mine site operating costs such as mining, processing and administration, but exclude depreciation, depletion and share-based payment expenses and reclamation costs. The Company discloses cash cost per ounce as it believes this measure provides valuable assistance to investors and analysts in evaluating the Company’s performance and ability to generate cash flow. This measure should not be considered in isolation or as a substitute for measures prepared in accordance with GAAP such as total production costs. A reconciliation of cash operating costs and cash operating cost per ounce to total production costs for the years ended December 31, 2014 and 2013 is set out on page 19 of the Company’s 2014 and fourth quarter of 2014 Management Discussion & Analysis (“MD&A”). A reconciliation of cash operating costs and cash operating cost per ounce to total production costs for the three and six months ended June 30, 2015 is set out on page 19 of the Company’s second quarter 2015 MD&A. All-In Sustaining Costs per Ounce Effective the second quarter 2013, the Company has adopted a total all-in sustaining cost (“AISC”) performance measure. AISC is a Non-GAAP measure. The measure is intended to assist readers in evaluating the total costs of producing gold from current operations. While there is no standardized meaning across the industry for this measure, the Company’s definition conforms to the AISC definition as set out by the World Gold Council in its guidance note dated June 27, 2013. The Company defines all-in sustaining cost as the sum of cash costs from mine operations, sustaining capital (capital required to maintain current operations at existing levels), corporate general and administrative expenses, in-mine exploration expenses and reclamation cost accretion related to current operations. All-in sustaining cost excludes growth capital, growth exploration expenditures, reclamation cost accretion not related to current operations and interest and other financing costs. A reconciliation of all-in sustaining costs and all- in sustaining cost per ounce to total production costs for the years ended December 31, 2014 and 2013 is set out on page 20 of the Company’s 2014 and fourth quarter 2014 MD&A. A reconciliation of cash operating costs and cash operating cost per ounce to total production costs for the three and six months ended June 30, 2015 is set out on page 20 of the Company’s second quarter 2015 MD&A. Non-GAAP Measures(1) (1) The Company’s MDA”s for the full year and fourth quarter of 2014 and first and second quarters of 2015 are posted at www.sedar.com and on the Company’s website at www.lsgold.com.

24. Probable Reserves(1) Tonnes Au Grade (g/t) Contained Ounces Timmins West Mine 3,691,000 4.3 509,700 Bell Creek Mine 1,792,000 4.6 263,600 Total 5,483,000 4.4 773,300 Measured & Indicated(2) Tonnes Au Grade (g/t) Contained Ounces Timmins West Mine 4,539,000 4.8 695,000 Gold River 690,000 5.3 117,000 Bell Creek Mine 4,904,000 4.4 687,000 Vogel 1,860,000 1.64(3) 98,000 Marlhill 395,000 4.5 57,000 Fenn Gib 40,800,000 0.99(3) 1,300,000 Total 2,954,000 Inferred Tonnes Au Grade (g/t) Contained Ounces Timmins West Mine 1,631,000 5.0 260,000 Gold River 5,273,000 6.1 1,028,000 Bell Creek Mine 4,399,000 4.8 685,000 Vogel 900,000 4.15 120,000 Fenn-Gib 24,500,000 0.95(3) 750,000 Total 2,843,000 (1) Reserves as at December 31,2014 and calculated using average price of US$1,100/oz (2) Resources are inclusive of reserves (3) Open-pit resources. See press release dated March 12, 2015 for details of assumptions and estimates used in reserve and resource calculations for Timmins West Mine and Bell Creek Mine. See www.lsgold.com for estimates and assumptions relating to resources at other properties Reserves & Resources

25. Quarterly Production: 2011 – Q2/15 0 10 20 30 40 50 60 22 18 19 25 17 24 21 24 23 31 29 52 45 52 46 43 53 43 Production (Ounces) 2011 2012 2013 2014 2015

26. Quarterly Unit Costs : 2011 – Q2/15 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 586 1,187 884 762 1,048 949 1,014 990 982 908 701 609 621 556 594 597 510 597 1,557 1,891 1,741 1,548 1,257 1,027 849 960 784 858 915 750 877 Cash Costs All-In Sustaining Costs US$/oz 2011 2012 2013 2014 2015 AISC not reported * * Also called AISC

27. Quarterly Throughput & Grades: 2011 – Q2/15 2011 2015 148 163 174 186 161 183 194 182 198 231 202 322 284 310 321 332 300 327 4.89 3.55 3.49 4.34 3.40 4.30 3.50 4.20 3.80 4.30 4.70 5.20 5.10 5.40 4.60 4.20 5.70 4.20 2.00 3.00 4.00 5.00 6.00 7.00 8.00 0 50 100 150 200 250 300 350 Mill Throughput Grade 2012 2013 2011 Grams per tonneTonnes (Thousands)

28. Timmins West Mine A New Mine in a Proven Gold Camp  H1/15 production • 75,000 oz • 482,900 tonnes at grade of 5.0 gpt  Reserves updated (Dec. 31/14)(1) • 509,700 oz (3.7M tonnes at 4.3 gpt) • Replaced reserves mined in 2014 (1) See press release dated March 12, 2015 for more information about reserves and resources 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 2012 2013 2014 64,000 110,000 142,200 (Ounces) Production Timmins DepositThunder Creek 270 Access Level 730 Access Level 260 Level 525 Level 650 Level

29.  Mining Methods: • Sill development • Longitudinal longhole stoping  Dip: 50 – 85 degrees  Strike length: 14 – 48 m  Width: 5 – 20 m  Mining primarily in UM (5, 6, 7) and FW zones  Mining horizons: 770L – 930L for longhole and sill development  Mining recovery estimates: 95% Timmins West Mine – Timmins Deposit Timmins Deposit Long Section

30. Highlightsof Production Plan - TC  Mining Methods: • Sill Development • Transverse Longhole stoping in Porphyry • Longitudinal Longhole stoping in Rusk  Dip: 60 – 70  Strike length: 10 to 35 m in Porphyry Zone, 15 – 30 m in Rusk  Width: 10 – 15 m in Porphyry, 5 – 22 m in Rusk  Mining horizons: 555L – 695L for longhole and 485L to 785L for sill development  Mining recovery estimates: 95% Thunder Creek Long Section Timmins West Mine – Thunder Creek

31. Bell Creek Mine  H1/15 • 20,900 oz (10,600 oz in Q2/15) • 144,100 tonnes processed at 4.6 gpt  More than doubled reserves in ‘14 update(1) • 263,600 oz (1.8M tonnes at 4.6 gpt) Bell Creek Mine Shaft Deep Zone Potential shaft extension 0 10,000 20,000 30,000 40,000 50,000 2012 2013 2014 22,500 27,500 43,400 (Ounces) Production (1) See press release dated March 12, 2015 for more information about reserves and resources

32. Highlightsof Production Plan - BC  Mining Methods: • Sill development • Longhole stoping  Dip: 72 degrees  Strike length: Avg. 20 m  Width: Avg. 3 m  Mining primarily the NA, NA2, NA4 and NB2/NB3 zones  Mining horizons: 460L – 850L for longhole and 445L – 880L for sill development  Mining recovery estimates: 95% Bell Creek Long Section Bell Creek Mine

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