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

RE:The next year should be exciting

[Allthewaydown]

For any investment you should have a clear idea why you are there. Want exploration windfall? Wrong company. Go with an exploration junior. Want rock solid income stream? Wrong company - go with a major. Want exposure to gold? Wrong investment - buy futures. You go into this one because you want aggressive income growth potential and are willing to accept risk. Therefore you want to see the company do things that are consistent with aggressive growth. More ounces defined, translated in the near term into more mill throughput. Organic growth through focused exploration and strategic acquisition or merger. If the company tries to do anything other than this, it is trying to be something that it is not. Do not expect the company to generate cash so that they can sit on it, and do not expect dividends. Expect that money will be used to pay down debt to the point that capital expansion can be funded from non-predatory sources in a non-dilutive way. The company needs an expansion plan over the next couple of years, and it will either be spearheaded by exploration (which they are attempting) or by merger/acquisition. The peculiarity of our financial system is that you cannot develop too big a pot of cash, otherwise you will be the subject of a leveraged buyout. Instead you need to replace predatory debt with good debt, and stay within a narrow debt to equity ratio.