Lake Shore Gold Completes Credit Facility Agreement for Up to $70 Million With Sprott Resource Lending Partnership

Lake Shore Gold Corp. LSG today announced the signing of a definitive agreement (the "Agreement") with Sprott Resource Lending Partnership ("Sprott") for a credit facility (the "Facility") totaling up to $70 million. The Facility involves two components, a $35 million gold-linked note (the "Gold Note") maturing on May 31, 2015 and a standby line of credit (the "Standby Line") for an additional $35 million. The Standby Line will be available to the Company as of November 1, 2012 and will mature on January 1, 2015. Funding is subject to certain closing conditions, including consents from the Ministry of Northern Development and Mines and various third parties to the security on the mining properties and to approvals from the TSX and NYSE MKT. Tony Makuch, President and CEO of Lake Shore Gold, commented: "The $35 million of cash available from the Gold Note and $35 million of additional liquidity through the Standby Line will provide important balance sheet strength for Lake Shore Gold. With this Facility, as well as our $50 million of cash and gold bullion inventory and plans to reduce 2012 capital expenditures by $15 to $20 million, announced yesterday, we are now well positioned to finance our business as we progress towards strong production growth and positive free cash flow from Timmins West Mine in 2013. We very much appreciate Sprott's support for our company, and its hard work and commitment in completing the due diligence period and documentation required to close the transaction."