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To: Veteran98 who wrote (201236)	7/21/2011 9:22:36 AM
From: mimur	Read Replies (1) \| Respond to of 313272

Lake Shore Gold* (LSG : TSX : $2.16), Net Change: -0.70, % Change: -24.48%, Volume: 17,229,393 Still Beached. Lake Shore Gold continued to sell-off after releasing disappointing Q2/11 production results on Tuesday. Quarterly production came in at 17,615 ounces of gold versus expectations for 31,800 ounces. The shortfall was caused by development delays at the Timmins mine, resulting in the use of lower grade sources and a head grade 60% lower than budgeted. Additionally, the company said grades during Q2 were adversely affected by the milling of low-grade stockpiles from Bell Creek Mine, which had been accumulated as part of the advanced exploration program at the project. Mill throughput averaged 1,790 tonnes per day in the Q2, compared with the company's expectations of average throughput of 2,000-2,100 tonnes per day. Worse yet, Lake Shore also expects cash operating costs for the Q2 to be sequentially higher due to lower grades and production levels (cash operating costs from the Timmins mine was $586 per ounce in the first quarter of commercial operation). The company suggests ore from the higher-grade UM1 zone will be mined in H2/11, but has reduced its 2011 production forecast from 125,000 oz Au to 85,000-100,000 ounces. Further, Lake Shore indicated that the Timmins mine orebody is broader than they previously understood. According to the company, “This will affect our average grades in 2011 as we mine more tonnes at lower grades, but in the longer term it may result in more overall ounces, although further work is required to confirm this.” At least five analysts downgraded Lake Shore on Wednesday.