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

RE:I'm Hoping There Is No Take Over

[JRaffles]

I agree that LSG shareholders have more to gain if the company had a year or so to prove its reaserves and increase cash resources.  However, an opportunist take over of LSG if the POG were to fall to $1000 may include:-

1. The LSG SP should be far less impacted by the low POG, due to its low cash and AISC. Other high cost but long term sound producers, such as KGI, would be downsized far more than LSG.  In this scenario, if LSG shareholders were offered a substantial premium over a $1000 POG SP, then the proceeds could be used to buy even more depressed gold producers.
2. If the POG were to fall to US$1000, this is likely to arise when the $ Index against other currencies is 100/110 (currently ~ 95).  In this scenario, the C$ POG could be C$1200+.

In summary,  a fall in the POG would be likely to improve LSG's position relative to other higher cost gold producers.