LAKE SHORE GOLD CORP

The takeover closed on 1 April 2016. Tahoe issued 69,239,629 shares at 0.1467 per Lake Shore Gold share, making the company a wholly-owned subsidiary and leaving former holders with 23.32% of Tahoe's 296,900,457 shares; the Lake Shore Gold listings on the TSX and NYSE MKT were withdrawn. The $103,181,000 of 6.25% debentures stayed listed and now convert into Tahoe shares at the same ratio, and Tahoe elected to redeem them. From the US listing in August 2011 to this exit was four years and eight months; from first commercial production at the Timmins deposit in January 2011, about five years and three months.

business combination

Lake Shore Gold shareholders approved the Tahoe arrangement with about 95.1% of votes cast in favour, with the court's final order sought for 1 April 2016.

business combination

Final annual resource and reserve update before the takeover. Timmins West indicated resources rose to 903,400 ounces (5,775,000 t at 4.9 g/t) from 694,600 a year earlier on the 144 Gap addition, while its probable reserves fell to 391,800 ounces from 509,700 as mining outpaced conversion; Bell Creek held 679,900 ounces measured and indicated with reserves up to 309,300 ounces from 263,600. Across both mines: 1,583,300 ounces measured and indicated, 1,013,300 inferred.

resource reserve update

First resource for the 144 Gap deposit: 301,700 ounces indicated (1,734,000 t at 5.41 g/t) and 319,200 ounces inferred (1,914,000 t at 5.19 g/t), sixteen months after the October 2014 discovery hole. Intercepts inside the resource but not yet counted in it included 49.92 g/t over 22.7 m and 31.27 g/t over 18.5 m.

resource reserve update

Tahoe Resources agreed to acquire Lake Shore Gold outright, all in shares: 0.1467 of a Tahoe share for each Lake Shore Gold share, worth C$1.71 a share on Tahoe's 5 February close and implying equity value of C$945 million. That was a 14.8% premium to the 5 February close and 28.6% to the 4 February close, or 25.7% and 30.4% against 20-day volume-weighted averages, leaving Lake Shore Gold holders about 26% of the combined company. It was announced the same day as the maiden 144 Gap resource.

business combination

The first 13 holes (1,600 m) of a 30,000 m programme at the Whitney project - the first drilling there since the Temex acquisition closed in September 2015 - confirmed and expanded the shallow 110 Zone south of the Hallnor shaft, with 29.42 g/t over 12.0 m, 8.45 g/t over 9.5 m and 6.45 g/t over 9.2 m, all within 100 m of surface.

drilling result

Preliminary 2015 cash operating cost of about US$580 an ounce sold beat the better-than-US$650 target and all-in sustaining cost of US$870 beat the below-US$950 target, on total production costs of about $135.0 million. A third consecutive year of costs coming in under guidance.

production update

Sixty holes and 11 wedge cuts (39,050 m) across the 144 trend: the first underground hole into the western part of the 144 Gap cut 6.85 g/t over 59.2 m, delineation holes returned 79.52 g/t over 8.3 m and 6.98 g/t over 36.1 m, and surface drilling discovered new gold at 144 South 450 m below and northeast of previous holes.

drilling result

Nine-month 2015 production of 136,200 ounces from 952,000 t at 4.6 g/t and 96.7% recovery, with estimated cash operating costs of US$567 an ounce sold and all-in sustaining costs of US$844 - both running better than the full-year targets, and the at-least-180,000-ounce guidance intact.

production update

The first ten underground holes (4,771 m) from the new exploration drift into the 144 Gap returned 7.81 g/t over 10.4 m, 6.29 g/t over 36.8 m, 7.83 g/t over 18.8 m and 10.97 g/t over 14.4 m, with the drift over 90% complete and a first resource still targeted for early 2016.

drilling result

Temex shareholders approved the arrangement with about 88% of votes cast in favour, clearing the way to close on the court's final order. Lake Shore Gold would issue roughly 20 million shares, under 5% of its own count, to take all of Temex.

business combination

Signed a binding arrangement agreement with Temex on the 16 July terms, after Temex terminated an agreement it had signed with Oban Mining on 29 June. Lake Shore Gold lent Temex the money to pay Oban its $691,856 break fee - it funded the exit from the rival deal to get the asset.

business combination

Two announcements in one filing. Preliminary first-half cash operating cost of US$551 an ounce sold and all-in sustaining cost of US$810. And a binding proposal to buy Temex Resources at 0.105 Lake Shore Gold shares per Temex share, worth $0.13 on the 15 July close - the target being Temex's 60% of the Whitney joint venture with Goldcorp next door to Bell Creek (218,100 ounces measured at 7.02 g/t, 490,500 indicated at 6.77 g/t, 170,700 inferred at 5.34 g/t) plus 100% of the Juby project.

business combination

First-half 2015 production of 95,600 ounces from 627,000 t at 4.9 g/t and 96.7% recovery, with 98,500 ounces sold at US$1,208. Full-year guidance was raised to at least 180,000 ounces and unit cost targets cut to below US$650 cash and US$950 all-in sustaining; cash and bullion stood at about $82.0 million.

production update

Made the final payment on the Sprott senior secured debt, clearing the $70 million facility arranged in mid-2012 to fund the Bell Creek mill expansion. Three years from first drawdown to no secured debt at all, with the C$90 million of convertible debentures due September 2017 still outstanding.

debt financing

Expanded the 144 Gap drill programme, opened new exploration along the 144 trend to the southwest and added an underground programme at Bell Creek. Management framed it as the turn from stabilising and deleveraging to spending on growth, after debt repayment and cost targets had been met.

drilling result

Twenty-two holes and five wedges (29,089 m) took the 144 Gap to 400 m along strike and 400 m of vertical height, with the high-grade core now at least 300 m tall. Intercepts included 11.79 g/t over 21.1 m within a broader 5.74 g/t over 55.0 m, 8.81 g/t over 8.2 m and 8.14 g/t over 15.1 m.

drilling result

Filed an updated Bell Creek reserve at 31 December 2014 of 1,792,295 t grading 4.6 g/t for 263,608 ounces mined to surface, of which 172,228 t at 4.5 g/t is proven, using a US$1,100 gold price and a 0.90 exchange rate.

resource reserve update

Ten holes and a wedge (11,092 m) defined a thick, high-grade core inside the 144 Gap over 250 m of vertical height, 75-100 m wide and 50-75 m along strike, with 5.36 g/t over 47.0 m (including 9.70 g/t over 18.4 m), 4.09 g/t over 56.9 m and, near the northeast limit, 78.44 g/t over 1.9 m.

drilling result

Tripled the 144 Gap's minimum strike length, taking the zone to 350 m along strike and 350 m down dip, and pushed mineralisation 200 m northeast to within 500 m of Thunder Creek (3.68 g/t over 18.0 m, 6.56 g/t over 12.4 m, and 100.00 g/t over 0.40 m). Six surface rigs were on site with 90,000 m planned for 2015.

drilling result

Preliminary 2014 cash operating cost of about US$595 an ounce sold beat guidance of US$675-775 and was 22% better than 2013, with all-in sustaining cost at US$875 against a US$950-1,050 target and total production costs of about $120 million versus $128 million guided. This is the year the mine turned into a free-cash-flow generator.

production update

Four more holes (4,898 m) at the 144 Gap returned 7.18 g/t over 24.0 m including 12.61 g/t over 11.5 m, 5.09 g/t over 24.8 m and 5.92 g/t over 20.7 m, confirming minimum dimensions of 100 m along strike by 250 m down dip. The programme was expanded from 10,000 to 15,000 m with a fourth rig.

drilling result

The first hole of a new 10,000 m surface programme at the 144 property cut 5.37 g/t over 46.0 m, including 21.87 g/t over 6.0 m and 12.54 g/t over 4.4 m, confirming as a real discovery the mineralisation first glimpsed 770 m from Thunder Creek in the 2012 drilling. Being 500 m from an operating mine, it could be reached from existing infrastructure.

drilling result

Nine-month 2014 production of 142,500 ounces was 72% above the same period of 2013, with the third quarter at 45,600 ounces from 320,800 t at 4.6 g/t and 96.7% recovery, about 3,490 tonnes a day. Cash and bullion reached about $67.0 million and the company expected to meet or beat the top of its 160,000-180,000 ounce guidance.

production update

Prepaid $10 million of the Sprott standby line on 4 June, cutting it from $30 million to $20 million and total Sprott debt to about $35 million. Cash and bullion had climbed from a low of $15 million at the end of September 2013 to about $55 million - the mine was now funding its own deleveraging.

debt financing

Updated Timmins West reserve of 3,332,164 t at 4.6 g/t for 492,246 ounces - Timmins deposit 227,707 ounces, Thunder Creek 264,539 ounces - with a life-of-mine plan averaging about 2,800 tonnes a day through 2016 and ending in the third quarter of 2017. That is down from the 823,848 ounces first booked in April 2012 after two years of mining, and leaves roughly three and a half years of reserve life ahead of the mine.

resource reserve update

Sprott agreed to stretch the standby line's repayment into 18 equal monthly instalments running from 30 June 2015 to 30 November 2016, instead of the whole $35 million falling due on 1 January 2015, and Lake Shore Gold prepaid $5 million to cut the balance to $30 million. This was maturity relief, not tightening; 2013 debt repayments totalled about $20 million.

debt financing

Raised 2014 production guidance to 160,000-180,000 ounces from 140,000-160,000, with cash operating costs of US$675-775 and all-in sustaining costs of US$950-1,050 an ounce, and said about $15 million of debt would have been repaid during 2013.

production update

Closed the Mexico sale: the subsidiary holding the portfolio, carried at about $2.2 million, went to Revolution Resources for 20 million shares, taking Lake Shore Gold to 26,713,740 Revolution shares or 22.4%, locked up for 18 months, with rights to at least two Revolution board seats. The same filing carried amendments to the option plan and by-law being put to the 15 May shareholder meeting, including a new 1%-of-shares cap on options to non-executive directors.

asset acquisition disposition

Warned that its 2012 year-end accounts would carry a write-down of the Timmins and Mexican assets, a non-cash impairment whose size was not yet known, reflecting the gap between book value and market capitalisation as mining assets were being repriced. Guidance for 2013 was reaffirmed at 120,000 to 135,000 ounces, at least 40% growth.

other

Drew the full $35 million Sprott standby line and paid the drawdown fee in 885,964 shares. Management said the draw was mainly to keep headroom under covenants attached to other debt, with the year having opened at about $61 million of cash and bullion - a defensive draw rather than a funding need.

debt financing

Agreed to sell the entire Mexican portfolio - Universo, Montana de Oro, La Bufa and Lluvia de Oro, over 400,000 hectares - outright to Revolution Resources for 20 million Revolution shares plus net smelter royalties, replacing the 2011 option arrangement. The properties had come with the 2009 acquisition of West Timmins Mining, which is also where Thunder Creek came from.

asset acquisition disposition

The 2012 programme of 35 holes and two extensions (27,411 m) found new mineralisation 850 m south of Thunder Creek in the 144 Gap (13.54 g/t over 2.0 m, 6.07 g/t over 3.0 m), doubled the 144 North plunge length to 800 m depth and hit shallow gold at 144 South (14.76 g/t over 3.0 m). The company later dated the 144 Gap discovery to this 2012 drilling.

drilling result

Completed the first stage of the mill expansion, lifting Bell Creek processing capacity 25% to 2,500 tonnes a day, with the second stage to 3,000 t/d due in the second quarter of 2013. Fourth-quarter grades were running 4.2 g/t overall and 4.4 g/t at Timmins West.

production update

Closed the C$90 million convertible debenture offering for net proceeds of C$86.4 million and used them to repay and extinguish the US$50 million three-year senior secured revolver with UniCredit Bank AG; the debentures began trading on the TSX as LSG.DB. Cheaper and longer-dated than the undrawn C$35 million Sprott standby line it left in place.

capital raising announcement

Launched a bought-deal offering of C$75 million of 6.25% convertible senior unsecured debentures due 30 September 2017, convertible at C$1.40 a share. The proceeds were earmarked to repay and extinguish a US$50 million three-year revolving facility that had not appeared anywhere earlier in this filing record.

capital raising announcement

Two announcements in one filing. The Sprott facility went definitive on terms largely as announced in April - a $35 million gold-linked note to 31 May 2015 and a $35 million standby line available from 1 November 2012 - subject to ministry, third-party and exchange consents. The day before, the company said it would cut 2012 capital spending by $15 to $20 million by deferring Timmins West development and re-timing the mill expansion, while holding production guidance at 85,000 to 100,000 ounces.

debt financing

Twenty-six holes (15,846 m) at Fenn-Gib returned 1.93 g/t over 241.2 m, 1.26 g/t over 324.0 m, 0.89 g/t over 260.5 m and 0.73 g/t over 284.0 m, extended mineralisation up to 200 m below the resource and pushed the Main Zone at least 200 m east. Silver assays averaged 1 to 2 g/t and were not in the resource at all.

drilling result

Agreed a facility of up to $70 million with Sprott Resource Lending, but the committed money was the $35 million gold loan - repayable in 29 monthly cash payments tied to the gold price, about 924 ounces a month at the then US$1,650 spot, maturing 31 May 2015. The other $35 million was a standby line available until end-2014, not cash in hand. Management framed it as funding Timmins West to full production with little dilution.

debt financing

Two announcements in one filing. Bell Creek measured and indicated resources rose more than 150% to 646,431 ounces (4,249,451 t at 4.73 g/t) with 953,845 ounces inferred (6,088,506 t at 4.87 g/t), reflecting roughly 425,000 ounces converted from inferred and 185,000 ounces newly added. And Timmins West got its first reserve: 823,848 ounces probable (4,922,180 t at 5.21 g/t), a 73% conversion of indicated resources and enough for five years of production.

resource reserve update

Closed the Franco-Nevada transaction announced on 8 February: the US$35 million royalty payment and the C$15 million share purchase were both received, taking pro-forma cash to about C$95 million at the end of February.

material agreement

Updated the Timmins West resource to 1,914,000 ounces in total - 1,122,500 ounces indicated (5,826,000 t at 5.99 g/t) and 791,500 ounces inferred at 5.76 g/t - across the Timmins and Thunder Creek deposits, with the Timmins deposit alone at 882,400 ounces. A preliminary economic assessment and first reserve were promised for the quarter.

resource reserve update

Franco-Nevada agreed to pay US$35 million for a 2.25% net smelter royalty over the Timmins West Complex and a further C$15 million for 10,050,591 shares at C$1.49, a 5% premium to the 10-day average. About C$50 million of funding ahead of the mine ramp-up, for roughly 3% dilution plus a permanent revenue slice.

material agreement

One filing carrying two maiden resources: Thunder Creek at 2,877,000 t grading 5.64 g/t for 521,600 ounces indicated plus 2,693,000 t at 5.89 g/t for 510,000 ounces inferred, and Fenn-Gib at 40.8 Mt grading 0.99 g/t for 1.30 million ounces indicated plus 24.5 Mt at 0.95 g/t for 0.75 million ounces inferred. Fenn-Gib met the 2-million-ounce target set when Barrick sold it three months earlier.

resource reserve update

Fenn-Gib hole FG-11-04 cut 1.31 g/t gold over 414.0 m, including 1.54 g/t over 264.0 m, and ended in mineralisation 470 m below surface; shallow mineralisation was extended 200 m north. Three twin holes matched or beat the historic results and check sampling of about 200 core halves averaged 1.12 g/t against 0.91 g/t originally, so the inherited data was if anything understated.

drilling result

Completed the purchase of Barrick Gold's Fenn-Gib and Guibord Main properties, 60 km east of Timmins, for 14.9 million shares - 3.9% of the company and no cash. Management targeted a first resource of at least 2 to 3 million ounces there, making it the third gold complex Lake Shore Gold held along the Porcupine-Destor fault.

asset acquisition disposition

NYSE Amex approved a US listing, with trading to start 1 August 2011 under LSG alongside the existing TSX line. This is where the SEC filing record held here begins; the company was already producing in Timmins and had been TSX-listed for years.

listing compliance notice

Underground and surface drilling at Thunder Creek confirmed and extended the deposit above and below the 730 Level, with 7.57 g/t gold over 108.8 m, 7.01 g/t over 112.7 m, 4.70 g/t over 145.7 m and 10.19 g/t over 55.0 m (including 18.95 g/t over 20.5 m). Surface holes also picked up a possible new zone 500 m southwest along the TC-144 trend - the corridor the company would drill out from 2012 as the 144 Gap.

drilling result