LAKE SHORE GOLD CORP 6.25 PCT DEBS T.LSG.DB

Upcoming Financial Results

[gil]

Here is my take on the operating cost per ounce for the second quarter. In the first quarter, Lakeshore Gold produced 22,328 ounces at a cost of $586 per ounce for a total operating cost of $13,084,208.00. Assuming nothing has changed in the second quarter and everyone still had a job and the shifts remained the same, the total operating cost should be approximately the same. They only recovered 17,421 ounces in the second quarter thus giving a cost per ounce of $751.00 ($13,084,208.00 / 17,421). This would seem to be in line with the figures that Dogwag provided us a while back using management's comments from the webcast. The only unknown is whether more money was spent doing the prep work to get to the UM1 zone or if this was part of the regular crews' duties. As the gold price has been consistently at or above $1500 per ounce for most of the quarter and rounding up the operating cost to $800 per ounce, their operating profit would then be $700 per ounce or approximately $12,000,000 (17,421 ounces*$700).  Of course, that is not the same as total earnings for the quarter.

P.S. If you listen to the webcast, Dan Gagnon seems to imply that the second half forecast was made conservatively and that there is room to exceed those numbers. Since he is the 'new' guy, we can't blame him for past misses so I look forward to the next six months, especially if there are finally some positive surprises!!!