Lake Shore Gold provides 2008/2009 budget plan

Lake Shore Gold Corp. provided a project update and outlook for 2008 and 2009, which envisions initial deliveries of ore from its Timmins West property to the Company’s 100%-owned Bell Creek mill by early in 2009 and a steady ramp up in production which could reach approximately 200,000 ounces of gold by 2011.

Lake Shore Gold’s Board of Directors has approved a project budget for 2008 totalling $75.0 million ($15.0 million incurred in the first quarter of 2008) and gave preliminary approval for a 2009 budget totalling $78.5 million, excluding corporate costs.

Through the expenditures planned to the end of next year, and subject to favourable advanced exploration and other results, specific milestones expected to be achieved include:

- Refurbishing of the Bell Creek mill by the fourth quarter of 2008, with capacity of 800 tonnes per day, to be increased to 1,500 tonnes per day as ore production increases;

- Developing a ramp at the Timmins West property with a goal of delivering development ore to the Bell Creek mill by early in 2009;

- Carrying out an advanced exploration program, including sinking a shaft to the deeper, primary deposit at Timmins West, which will be collared at the 200 metre, 400 metre, 525 metre and 650 metre levels, with development from the 650 metre level to intersect mineralized zones planned for the second half of 2009;

- Commencing development of a surface ramp to the 100%-owned Vogel property, with ramp portal and culvert construction to begin by mid-2009;

- Completing a study for the rehabilitation of the Bell Creek mine and, pending favourable results, commencing advanced exploration work including dewatering the mine and undertaking underground development and diamond drilling; and,

- Continuing exploration programs at each of the Company’s properties.

Tony Makuch, President and CEO of Lake Shore Gold, said that his company is on track with its goal to become Canada’s next intermediate gold producer at a time when the outlook for gold prices remains highly favourable.

He added we have an excellent portfolio of properties, with 1.2 million ounces of probable reserves (uncut) already having been identified at our Timmins West property, a 100%-owned mill at Bell Creek, the refurbishing of which is being accomplished at a fraction of the cost and time required to construct a greenfield mill, and very encouraging prospects for identifying additional reserves both at Timmins West and at a number of our other properties.

While much work remains, we are targeting solid production growth, starting with an estimated 30,000 ounces of gold in 2009 from Timmins West. Production could then grow to just over 100,000 ounces in 2010 as we increase output at Timmins West and begin producing from the Vogel ramp, added Mr Makuch.

In 2011, the Company anticipates that production could reach up to 200,000 ounces reflecting increased production from Timmins West and the Vogel ramp and initial output from the Bell Creek mine. Production growth in subsequent years is expected to come from continued progress at these and other properties.