Lake Shore Gold on Track to Achieve 2008 Targets

TORONTO, ONTARIO–(Marketwire – Aug. 12, 2008) – Lake Shore Gold Corp. (TSX:LSG) (“Lake Shore Gold” or “the Company”) today announced financial and operating results for the second quarter and first six months of 2008, including resource property and deferred exploration expenditures during the first half of the year totaling $30.7 million ($15.7 million in the second quarter). The Company remains on track to record full-year expenditures in line with the previously announced 2008 project budget of $75.0 million, excluding corporate costs. Also during the first six months of 2008, Lake Shore Gold significantly strengthened its balance sheet, raising $144.3 million from two private placement transactions with Hochschild Mining Holdings Ltd. (“Hochschild”). At June 30, 2008, the Company’s cash position stood at $123.9 million. The Company’s net loss for the first half of 2008 was $2.1 million ($1.6 million in the second quarter) compared with a net loss of $1.7 million in the first six months of 2007 ($0.7 million in the second quarter).

Based on progress so far this year, Lake Shore Gold is well positioned to achieve its key 2008 targets, including commencing shaft sinking and ramp development at Timmins West during the third quarter, with shaft sinking work having recently begun; completing refurbishing of the Bell Creek mill by the fourth quarter, completing studies both for accessing shallow, high-grade mineralization at the Vogel property and for the rehabilitation of the Bell Creek mine by year end, and advancing exploration programs at these and other properties.

Tony Makuch, President and CEO of Lake Shore Gold, commented: “At the mid-point of the year, we are pleased with our progress and are on track to be producing gold from Timmins West by early 2009. The construction of the surface plant at Timmins West was completed on schedule and we have now moved underground with the commencement of shaft sinking. We also recently announced encouraging exploration results at the Bell Creek property, including the discovery of a new gold zone and the extension of the known mineralization, with additional drill results pending. Very importantly, in a volatile capital market environment, Lake Shore Gold is fully financed to complete our current development program and our planned exploration activities.

Private Placement Transactions with Hochschild Mining Holdings Ltd.

On June 17, 2008, the Company completed a second private placement transaction with Hochschild, involving the sale of 33,166,908 common shares of the Company at a price of $2.40 per share. The transaction brought Hochschild’s total shareholdings in the Company to 61,339,210 shares, representing 35% of issued and outstanding shares, for proceeds of $144.3 million. Near the end of the second quarter, Hochschild acquired 11.8 million additional shares through a private transaction with a subsidiary of FNX Mining Company priced at $1.82 per share, increasing its interest to 40% on a fully diluted basis. A standstill arrangement exists between Hochschild and Lake Shore Gold limiting Hochschild’s interest to 40%, on a fully diluted basis, until November 22, 2010.

Resource Property and Deferred________Three months ended__ Six months ended Exploration Expenditures__________________June 30, 2008______June 30, 2008 ——————————————————————– ——- Bell Creek mill____________________ $____________699,571 $________2,209,752 Timmins West__________________________________11,967,266________ 22,600,541 Bell Creek Mine and________________________________________________________ Vogel/Schumacher properties__________________ 1,050,025__________1,610,359 Thunder Creek Joint Venture________________________________________________ (Company’s share)________________________________95,211____________305,018 Blakelock – Little Abitibi________________________________________________ properties______________________________________ 44,406____________484,767 Casa Berardi____________________________________ 195,611____________833,985 Tipahaakaaning (Company’s share)______________ 1,256,888__________2,219,248 Other projects__________________________________ 378,119____________400,172 ——————————————————————– ——- Total expenditures__________________$________ 15,687,097 $______ 30,663,842 ——————————————————————– ——- ——————————————————————– ——-

Timmins West

Total expenditures at Timmins West during the first six months of 2008 were $22.6 million, of which $21.5 million related to advanced exploration and construction in progress. Installation of the head frame, collar house, hoist plant, sinking arrangement and other surface infrastructure was completed during the second quarter. Hoist commissioning was completed in July with the shaft sinking program commencing on July 31st. Timmins West expenditures, excluding ramp and exploration costs, for the full year are budgeted at $38.2 million.

Development of a ramp from surface to access mineral reserves at Timmins West above the 400 metre level is expected to commence during the third quarter of 2008 with first production from the ramp targeted for early in 2009. Total expenditures in 2008 for the Timmins West ramp project are budgeted at approximately $14.3 million ($0.2 million in the first six months of 2008).

Bell Creek Mill

Expenditures at the Bell Creek mill during the first six months of 2008 totaled $2.2 million. Work has focused on completing repairs and refurbishing of the crushing and grinding areas, relining the Carbon-In-Pulp tanks, inspecting conveyor belts and drives, testing electric motors and the process control system, cleaning and repairing the refinery oven, completing minor repairs to the piping system and pumps, and re-establishing the independent electric power line to the mill, which was achieved in April. Total expenditures for the year at the Bell Creek mill are budgeted at approximately $10.0 million, with the remaining $7.8 million relating largely to additional refurbishing work, construction of a new surge pond, carrying costs and planned mill improvements as well as a $1.2 million contingency.

Vogel and Bell Creek Mine

During the first half of 2008, internal studies were undertaken for mining mineral resources above the 320 metre level at the Vogel property via ramp access, and for an advanced underground exploration program at Bell Creek, which would include dewatering the mine and undertaking underground development and diamond drilling. A total of $1.2 million has been budgeted for 2008 for these studies, $0.8 million for Vogel and $0.4 million for Bell Creek, with $0.2 million incurred as of June 30, 2008.

Exploration Expenditures

Total exploration expenditures during the first six months of 2008 were $6.6 million, of which $2.2 million related to the Company’s share of expenditures for the Tipahaakaaning project, $1.4 million to Bell Creek, $0.9 million to Timmins West, $0.8 million to Casa Berardi, $0.5 million to Blakelock and Little Abitibi, $0.3 million to Thunder Creek and $0.5 million to other projects. During the second quarter of 2008, the Company staked claims to property (the “Burntbush” property) immediately adjacent to its Casa Berardi property, consisting of 914 units (14,625 hectares) and covering approximately 25 kilometres of strike length of the Casa Berardi structure.

In July 2008, the Company reported encouraging results from the first five holes of its ongoing resource expansion drill program at Bell Creek, including the discovery of a new gold zone (the “South Zone”), with intersections of 5.39 grams per tonne gold over 6.05 metres (including 11.70 grams per tonne gold over 1.7 metres) on hole BC-08-02, and the extension of the known Bell Creek gold mineralization by approximately 350 metres below the existing Bell Creek resource and by approximately 175 metres to the west, with intersections of 5.95 grams per tonne gold over 8.1 metres (including 8.65 grams per tonne gold over 0.45 metres, 9.28 grams per tonne gold over 0.70 metres and 33.26 grams per tonne gold over 0.80 metres) on hole BC-08-05. The results highlight the potential to identify new sources of gold mineralization on the property and to increase the known resource at the Bell Creek mine at depth.

On August 5, 2008, the Company announced the commencement of a 36- hole, 22,000 metre diamond drill program at Thunder Creek in order to further expand and infill the recently discovered, high-grade Rusk Zone, and to test the sediment-ultramafic contact as well as a number of other high priority gold targets. The Rusk Zone has been traced for 260 metres down plunge and remains open both up and down plunge. Recent intercepts were announced on March 31, 2008, and included 8.57 grams per tonne gold over 9.00 metres, 27.21 grams gold per tonne over 0.90 metres, 8.52 grams gold per tonne over 2.05 metres and 6.33 grams gold per tonne over 2.60 metres.

On August 6, 2008, Northern Superior announced the results of the winter-spring drill program at the Tipahaakaaning project and the launch of a new exploration program to involve overburden and bedrock mapping to be followed by a second phase of drilling. The exploration programs are aimed at gaining the information required to identify the source of gold grains associated with the highly- prospective, two kilometer long dispersal apron, first announced in the fourth quarter of 2007. The winter-spring 2008 drill program intersected several narrow gold-bearing structures that, although not of sufficient grade or width to be the source of the gold grains, demonstrated significant potential to host higher grades up- dip and/or along strike and to be located in close proximity to parallel structures with significant exploration potential.

Exploration spending for the full year is budgeted at $11.4 million. The Company is considering increasing its exploration expenditures in 2008 above the budgeted level as it moves forward with drilling programs at the Bell Creek Complex (Bell Creek, Vogel and Schumacher), Timmins West, Thunder Creek and other properties.

More information about the Company’s 2008 budget is available in the Lake Shore Gold press release dated May 20, 2008 available on SEDAR at www.sedar.com and on the Company’s website at www.lsgold.com.

Results of Operations – Second Quarter and Six Months 2008 ____________________Three months ended June 30,____Six months ended June 30, ____________________________2008__________ 2007__________2008__________ 2007 ——————————————————————– ——– __Consulting and__________________________________________________________ __ management fees__$____195,295__$____189,177__$____433,258__$____ 657,039 __General explora- ________________________________________________________ __ tion__________________284,314______ 226,409______ 525,112________404,420

holder______________________________________________________________ __ information__________ 183,019______ 144,453______ 352,378________286,734 __Legal and________________________________________________________________ __ accounting____________50,904________38,214______ 145,017________ 63,454 __Office expense______ 1,310,943______ 308,443____ 2,194,170________601,767 __Write-off of____________________________________________________________ __ resource proper- ________________________________________________________ __ ties and deferred______________________________________________________ __ exploration________________ -______ 218,360____________ – ________393,146 __Depreciation of__________________________________________________________ __ property, plant________________________________________________________ __ and equipment__________16,697____________ – ________32,509______________- __Accretion of asset______________________________________________________ __

rement______________________________________________________________ __ obligations____________30,788____________ – ________61,486______________- __Travel________________ 169,038________ 52,398______273,244________ 82,968 ____________________————————— ——————– ——- Loss before interest______________________________________________________ and other income__________________________________________________________ and income taxes____ (2,240,998)__ (1,177,454)__ (4,017,174)____(2,489,528) __Interest and other________________________________________________________ __ income,net____________412,232______ 346,619______ 728,140________514,734 __Recovery of income______________________________________________________ __ taxes________________ 249,936______ 144,000____ 1,163,936________315,500 ____________________———————————————— ——– Net loss for the__________________________________________________________ period____________ $ (1,578,830) $__ (686,835) $ (2,125,098) $__(1,659,294) ____________________———————————————— ——– ____________________———————————————— ——–

Net loss for the second quarter of 2008 totaled $1,578,830 or $0.01 per basic and diluted share compared to a net loss of $686,835 or $0.01 per basic and diluted share for the same period in 2007. For the six month periods ending June 30th, the net loss for 2008 and 2007 were $2,125,098 ($0.02 per basic and diluted share) and $1,659,294 ($0.02 per basic and diluted share), respectively. The higher net loss in the three and six month periods ended June 30th, 2008 was primarily due to increased office expense, reflecting higher overall office salaries and an increase in the number of employees. Also contributing to the higher net loss for these periods were the impact of increased general exploration activity and higher shareholder information and legal and accounting costs. Partially offsetting these factors were higher future income tax recoveries, largely due to the tax benefits of deductible expenses and share issue costs, increased interest and other income resulting from higher cash balances and no write offs of resource properties in the second quarter and first six months of 2008 compared to $218,360 and $393,146, respectively, in the three and six month periods ended June 30th, 2007.

As at June 30, 2008, the Company had cash of $123.9 million and working capital of $118.5 million.

More information about Lake Shore Gold’s results of operations and financial condition and liquidity is available in the Company’s consolidated financial statements and management’s discussion and analysis, which are available at www.sedar.com and at www.lsgold.com.

About Lake Shore Gold

Lake Shore Gold Corp. is a mineral development and exploration company that is rapidly moving towards gold production through a portfolio which includes an existing processing facility and a number of quality mineral properties located in the Timmins gold mining district of northern Ontario and Quebec. The Company has completed a pre-feasibility study and is moving forward with an advanced exploration program at its Timmins West property, is progressing refurbishing work at its 100%-owned Bell Creek mill and is continuing drilling programs at a number of prospective properties. The Company’s common shares trade on the Toronto Stock Exchange under the symbol LSG.

Forward-looking Statements

Certain statements in this press release relating to the Company’s project expenditures and business plans are “forward- looking statements” within the meaning of securities legislation. The Company does not intend, and does not assume any obligation, to update these forward-looking statements. These forward-looking statements represent management’s best judgment based on current facts and assumptions that management considers reasonable, including that demand for products develops as anticipated, that operating and capital plans will not be disrupted by issues such as mechanical failure, unavailability of parts and supplies, labour disturbances, interruption in transportation or utilities, or adverse weather conditions, and that there are no material unanticipated variations in the cost of energy or materials or supplies. The Company makes no representation that reasonable business people in possession of the same information would reach the same conclusions. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Readers should not place undue reliance on forward-looking statements. More information about risks and uncertainties affecting the Company and its business is available in Lake Shore Gold’s regulatory filings which are posted on sedar at www.sedar.com.

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