Lake Shore Gold Announces Annual Resource and Reserve Update for Mines in Timmins, Ontario

Lake Shore Gold Corp.("Lake Shore Gold" or the "Company") today announced results of the Company's annual resource and reserve update for the Company's mines in Timmins, Ontario, including Timmins West and Bell Creek. Timmins West is located approximately 18 kilometres west of the centre of Timmins and includes the Timmins, Thunder Creek, and 144 Gap deposits. The Bell Creek Mine includes the Bell Creek Deposit and is located approximately 20 kilometres east of the centre of Timmins at the same location as the Company's milling facility.

At Timmins West, total resources are estimated at 903,400 ounces (5,775,000 tonnes at an average grade of 4.9 grams per tonne "gpt") in the Indicated category and 429,300 ounces (2,671,000 tonnes at an average grade of 5.0 gpt) in the Inferred category. The new resource estimates compare to the previous estimates, released on March 12, 2015, of 694,600 ounces (4,539,000 tonnes at an average grade of 4.8 gpt) in the Indicated category and 259,700 ounces (1,631,000 tonnes at an average grade of 5.0 gpt) in the Inferred category. The increases from the previous year's estimates result from the release of an initial resource at the Company's 144 Gap Deposit on February 8, 2016, including 301,700 ounces (1,734,000 tonnes at an average grade of 5.4 gpt) of Indicated resources and 319,200 ounces (1,914,000 tonnes at an average grade of 5.2 gpt) of Inferred resources.

The reserve estimate for Timmins West as at December 31, 2015 includes probable reserves at the Timmins and Thunder Creek deposits only. The release of an initial reserve for the 144 Gap Deposit is targeted for the end of the year following the completion of test stoping during the second half of 2016. Total reserves at the Timmins and Thunder Creek deposits are estimated at 391,800 ounces (2,895,000 tonnes at an average grade of 4.2 gpt). The new reserve estimate compares to the previous estimate of 509,700 ounces (3,691,000 tonnes at an average grade of 4.3 gpt) as at December 31, 2014.

The updated resource estimates at Bell Creek include 4,812,000 tonnes at an average grade of 4.4 gpt for 679,900 ounces in the measured and indicated categories and 4,124,000 tonnes at an average grade of 4.4 gpt for 584,000 ounces in the inferred category. The new resource estimates compare to the previous estimates of 4,904,000 tonnes at an average grade of 4.4 gpt for 686,700 ounces in the measured and indicated categories and 4,399,000 tonnes at an average grade of 4.8 gpt for 685,000 ounces in the inferred category. Proven and probable reserves at Bell Creek are estimated at 2,131,000 tonnes at an average grade of 4.5 gpt for 309,300 ounces, which compares to the previous estimate of 263,600 ounces (1,792,000 tonnes at an average grade of 4.6 gpt).

Tony Makuch, President and CEO of Lake Shore Gold, commented: "We achieved solid growth in total measured and indicated resources at our Timmins mining operations. As well, at Bell Creek, we increased total reserves as a result of success with our 2015 drilling program. At Timmins West, we released an initial resource at the 144 Gap Deposit last month, which resulted in increases of 30% and 65% in indicated and inferred resources, respectively, at the mine. Our plan this year is to complete a number of test stopes at the 144 Gap Deposit in the second half of the year and to use the information gained from our development and test stoping program to establish an initial reserve for the end of the year, which will add to the reserve base at Timmins West ahead of our next full reserve and resource update."

Mineral Resources

1. Mineral resource estimates have been classified according to CIM Definitions and Guidelines.
2. Mineral resources are reported inclusive of mineral reserves.
3. Mineral resources incorporate a minimum cut-off grade of 1.5 gpt gold for the Timmins and Thunder Creek deposits, 2.6 gpt gold for the 144 Gap Deposit and 2.2 gpt for the Bell Creek Mine.
4. Cut-off grade is determined using a weighted average gold price of US$1,100 per ounce and an exchange rate of CAD$/US$ $1.00/US$0.90.
5. Cut-off grades assume mining, general and administrative ("G&A") and surface haulage costs of up to $74 per tonne and/or processing costs of up to $22 per tonne for the Timmins West deposits, with assumed mining and G&A costs of up to $82 per tonne and/or processing costs of $22 per tonne at Bell Creek Mine. Assumed metallurgical recoveries are 97% for the Timmins West deposits and 95% for Bell Creek Mine.
6. Mineral resources have been estimated using Inverse Distance Squared estimation method and gold grades which have been capped between 20 and 120 grams per tonne based on statistical analysis of each zone.
7. Assumed minimum mining width is two metres.
8. The mineral resources were prepared under the supervision of, and verified by, Eric Kallio, P.Geo., Senior Vice-President, Exploration, Lake Shore Gold Corp., who is a qualified person under NI 43-101 and an employee of Lake Shore Gold.
9. Tonnes information is rounded to the nearest thousand and gold ounces to the nearest one hundred. As a result, totals may not add exactly due to rounding.

Mineral Reserves

1. The effective date of the mineral reserves is December 31, 2015.
2. The mineral reserve estimates are classified in accordance with the Canadian Institute of Mining Metallurgy and Petroleum's "CIM Standards on Mineral Resources and Reserves, Definition and Guidelines" as per Canadian Securities Administrator's National Instrument 43-101 requirements.
3. Mineral reserves are based on a long-term gold price of US$1,100 per ounce and an exchange rate of CAD$/US$ $1.00/US$0.80.
4. Mineral reserves are supported by a mine plan that features variable stope thicknesses, depending on zone, and expected cost levels, depending on the mining methods utilized.
5. Mineral reserves at the Timmins West Mine incorporate a minimum cut-off grade of 2.3 gpt. The cut-off grade assumes estimated mining and site G&A costs of $67.00 per tonne, surface haulage costs of $7.20 per tonne, processing costs of $22.62 per tonne, mining recovery of 95%, external dilution of 18% for Timmins Deposit and 12% for Thunder Creek Deposit, and a metallurgical recovery rate of 97%.
6. Mineral reserves at Bell Creek Mine incorporate a minimum cut-off grade of 2.5 gpt. The cut-off grade assumes estimated mining and site G&A costs of $82.50 per tonne, processing costs of $22.62 per tonne, mining recovery of 95%, external dilution of 15% and a metallurgical recovery rate of 95%.
7. The mineral reserves were prepared under the supervision of, and verified by, Natasha Vaz, P. Eng., Vice-President, Technical Services, Lake Shore Gold Corp., who is a qualified person under NI 43-101 and an employee of Lake Shore Gold Corp.
8. Tonnes information is rounded to the nearest thousand and gold ounces to the nearest one hundred. As a result, totals may not add exactly due to rounding.

The general parameters used in development of the block model mineral resource estimates for the Timmins West Mine are set out in a technical report entitled, "43]101 Technical Report, Updated Mineral Reserve Estimate for Timmins West Mine and Initial Resource Estimate for the 144 Gap Deposit, Timmins, Ontario, Canada" dated February 29, 2016, which was filed on SEDAR on March 9, 2016. The resource estimate for the 144 Gap Deposit was first reported in a press release dated February 8, 2016, and there is no material difference between that estimate and the resource estimate included in the technical report.

The calculation of mineral resources and mineral reserves has taken into account environmental, permitting, legal, title, taxation, socio-economic, marketing and political factors and constraints, none of which are considered to have the potential to affect materially the development of the Timmins West Mine. The mineral resource and mineral reserve estimates may be materially impacted by assumptions used for commodity prices, operating and capital costs, rock mechanics (geotechnical) constraints, constant underground access to all working areas, and metal recovery.

Qualified Person

Scientific and technical information contained in this press release related to reserves 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 contained in this press release, or source material for this press release, 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.

Quality Control

Lake Shore Gold has implemented a quality-control program to ensure best practice in the sampling and analysis of the drill core. Assays have been completed using a standard fire assay with a 30-gram aliquot. For samples that return a value greater than 10 grams per tonne gold, the sample is fire assayed with a gravimetric finish. Select zones with visible gold are tested by pulp metallic analysis. NQ size surface 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. BQ size underground drill core is either saw cut or whole core sampled. The drill core is transported in security sealed bags for preparation to the ALS Minerals analytical facility located in Val d'Or Quebec for fire assay. This ALS Minerals facility is registered ISO 9001-2008 (CERT-0051527) and is SCC ISO/IEC 17025:2005 Accredited (#689). Most underground drill core is analyzed by Activation Laboratories Ltd. (Actlabs) in Timmins, Ontario. Actlabs is an ISO/IEC 17025:2005 Accredited laboratory.

Source: http://www.lsgold.com/