TORONTO, ONTARIO -- (Marketwired – July 30, 2015) – Lake Shore Gold Corp. (TSX:LSG)(NYSE MKT:LSG) ("Lake Shore Gold" or the "Company") today announced financial and operating results for the first half ("H1/15") and second quarter ("Q2/15") of 2015. Full details of the results are provided in the Company's Consolidated Financial Statements and Management's Discussion & Analysis, which are available on the Company's website at www.lsgold.com and on SEDAR at www.sedar.com.

A number of record half-year performances were achieved in H1/15, including:

Gold sales of 98,500 ounces (45,900 ounces in Q2/15)
Cash operating costs (1) of US$551 (based on production costs of $67.2 million (US$597 in Q2/15 based on production costs of $33.8 million)
All-in sustaining costs (2) of US$809 (US$877 in Q2/15)
Revenue of $146.6 million ($67.4 million in Q2/15)
Cash earnings from mine operations and earnings from mine operations of $79.6 million and $37.6 million, respectively ($33.7 million and $14.2 million in Q2/15)
Cash flows from operating activities of $62.3 million ($26.4 million in Q2/15)
Net earnings in H1/15 were $13.8 million or $0.03 per common share ($1.7 million or $0.00 per share in Q2/15). The Company generated solid cash flows and profitability in H1/15 at the same time that exploration expenditures increased $11.5 million compared to the first half of 2014 ("H1/14") mainly as a result of drilling success being achieved at the 144 Trend. During H1/15, drilling at the 144 Trend further extended the dimensions of the 144 Gap Zone and also resulted in the discovery of a second gold zone called the 144 Gap SW Zone. Finance expense in H1/15 declined $3.4 million from H1/14 as a result of further progress in reducing debt levels. On May 29, 2015, the Company completed the repayment of its senior secured debt. Cash and bullion(4) at July 29, 2015 totaled $83.8 million.

Tony Makuch, President and CEO of Lake Shore Gold, commented: "During H1/15, we had solid production and record performances in gold sales, unit costs and in a number of key financial measures. Based on our strong results, we have been able to increase our cash and bullion by 36% so far in 2015 at the same time as we have completed the repayment of our senior secured debt and significantly increased our commitment to exploration.

"Looking at exploration, 2015 has already been a very successful year. At the 144 Trend, we have continued to extend the dimensions of the 144 Gap Zone and have announced the discovery of a second significant gold zone, called the 144 Gap SW Zone. At Bell Creek, we more than doubled our reserve base earlier this year and, in May, announced a new underground exploration program to accelerate growth in reserves and resources and to help us evaluate the large resource base below the current reserve.

"Based on our strong first half, and our expectations for the second half of 2015 ("H2/15"), we are very well positioned to meet our revised guidance for 2015, including production of at least 180,000 ounces of gold at cash operating costs averaging better than US$650 per ounce sold and all-in sustaining costs below US$950 per ounce sold. Other catalysts over the remainder of 2015 will include additional drill results as we commence our underground exploration programs at both the 144 Trend and Bell Creek."

Consolidated Financial Information

Three months ended June 30, Six months ended June 30,

2015 2014 2015 2014
(in $'000, except the per share amounts)

Revenue $ 67,442 $ 75,091 $ 146,566 $ 136,550
Production costs $ 33,789 $ 32,732 $ 67,220 $ 62,405
Earnings from mine operations $ 14,205 $ 22,058 $ 37,550 $ 36,347
Net earnings $ 1,714 $ 12,907 $ 13,780 $ 17,494
Basic net income per share $ 0.00 $ 0.03 $ 0.03 $ 0.04
Cash flows from operating activities $ 26,399 $ 36,828 $ 62,254 $ 61,756

Key Performance Drivers

Three months ended June 30, Six months ended June 30,

2015 2014 2015 2014
Tonnes milled 327,100 309,800 627,000 593,600
Grade 4.2 5.4 4.9 5.3
Average mill recoveries 96.8% 96.6% 96.7% 96.6%
Ounces recovered 42,600 52,300 95,600 96,900
Ounces poured 44,400 53,500 96,400 99,200
Ounces sold 45,900 53,500 98,500 96,500
Average price (US$/oz) $ 1,197 $ 1,289 $ 1,208 $ 1,291
Average price ($/oz) $ 1,470 $ 1,404 $ 1,488 $ 1,416
Cash operating costs (US$/oz) $ 597 $ 560 $ 551 $ 588
Cash operating costs ($/oz) $ 734 $ 610 $ 680 $ 645
All - in sustaining costs (US$/oz) $ 877 $ 784 $ 809 $ 862
All - in sustaining costs ($/oz) $ 1,078 $ 854 $ 999 $ 946
Cash earnings from mine operations ($000s) $ 33,746 $ 42,460 $ 79,578 $ 74,341
Adjusted net earnings(5) ($000s) $ 554 $ 12,947 $ 11,656 $ 18,410
Adjusted net earnings per share ($/share) $ 0.00 $ 0.03 $ 0.03 $ 0.04
Outlook

The Company revised its full-year 2015 guidance on July 8, 2015. Production in 2015 is now expected to total at least 180,000 ounces, which compares to the previous guidance of between 170,000 and 180,000 ounces. Cash operating costs per ounce sold for the year are now targeted at below US$650 versus previous guidance of between US$650 and US$700, while all-in sustaining costs are targeted at under US$950 per ounce sold compared to the former target range of US$950 to US$1,000. The Company remains on track to mine and process approximately 1.3 million tonnes in 2015 at an average grade now expected to exceed the Company's full-year 2015 guidance of 4.4 grams per tonne.

2015 Targets
Revised 2015 Targets Initial 2015 Targets Q2/15 (Actual) H1/15 (Actual)
Ounces produced (in thousands) 180.0 170.0 -180.0 42,600 95,600
Cash operating costs (US$/oz) <650 650 - 700 597 551
All-in sustaining costs (US$/oz) <950 950 - 1,000 877 809
Total production costs ($ millions) 125 125 33.8 67.2
Key Assumptions in Targets



Average gold price (US$/oz) 1,170 1,170 1,197 1,208
US$/C$ exchange rate (US$) 0.81 0.90 0.81 0.81
Exploration work at the 144 Trend is progressing on schedule, with the Company targeting an initial resource for the 144 Gap Zone for the end of 2015 (to be released in early 2016). Exploration expenditures in H2/15 at the 144 Trend are expected to total approximately $14.0 million, which will fund the completion of the exploration drift from Thunder Creek, approximately 40,000 metres of underground drilling into the 144 Gap Zone and approximately 55,000 metres of surface drilling. At Bell Creek, the Company will invest approximately $6.0 million during H2/15 to complete 32,500 metres of underground drilling and 800 metres of development as part of the new underground exploration program.