Oh the irony

Lake Shore Gold arranges $75.25-million financing

Lake Shore Gold Corp (C:LSG)
Shares Issued 351,097,726
Last Close 8/17/2010 $3.73
Wednesday August 18 2010 - News Release

Mr. Tony Makuch reports

LAKE SHORE GOLD ANNOUNCES BOUGHT DEAL FINANCING

Lake Shore Gold Corp. has entered an agreement with a syndicate of underwriters led by BMO Capital Markets, under which the underwriters have agreed to buy on a bought deal basis, by way of a short form prospectus, 21.5 million common shares and flow-through common shares of Lake Shore. The offering will consist of 21,500,000 Common Shares at a price of C$3.50 per Common Share. The underwriters will have the option to require that up to 2,400,000 common shares be issued as flow-through common shares ("Flow-Through Common Shares") at a price of C$4.20 per Flow-Through Common Share. The allocation between Common Shares and Flow-Through Common Shares above the minimum number of Common Shares will be determined by BMO Capital Markets, on behalf of the Underwriters. To the extent the underwriters purchase 21,500,000 Common Shares, then the gross proceeds to the Company will be C$75,250,000. To the extent the underwriters purchase 19,100,000 Common Shares and the Company issues 2,400,000 Flow-Through Common Shares, then the gross proceeds to the Company will be C$76,930,000. The Company has also granted the underwriters an option to purchase up to an additional 15% of the Common Shares offered at the issue price to cover over-allotments, if any. The offering is expected to close on or about September 10, 2010 and is subject to Lake Shore Gold receiving all necessary regulatory approvals. The Company intends to use the net proceeds of the Common Shares for continued ramp up of the Timmins Mine, advanced exploration at Thunder Creek and Bell Creek, expansion of the Bell Creek mill, and general corporate purposes. An amount equal to the gross proceeds of the Flow-Through Common Shares shall be used for general exploration expenditures which will constitute Canadian Exploration Expenditures ("CEE") and Canadian Development Expenses ("CDE") each as defined in the Income Tax Act.

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