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

RE: The way this is trading

[Vanchester]

It all depends on what the cut off grade is going to be. Will it be 1 million ounces with a grade of 7-8 gpt or will it be 2 million ounces with 3gpt. We have seen what the market does when the grade is lowered. We get slaughtered to say the least. When LSG came out with their latest NI43-101 for Timmins Mine it was at 7.8 gpt. LSG decides to go for more gold but at lower grades and the story changes from what original investors were sold on. With grades coming in at less than half the grade of the resource calculation, it no wonder why LSG has slipped so badly. Grades are going to improve, but probably will not get near the 7.8 value. It will be interesting what the updated NI43-101 will be for Timmins Mine. Will it be more gold at lower grades?? I hope not because we are losing money while gold is around $1700 and producing at these grades. Hell we even dipped into the credity facility for 20 million dollars.