Mr. Tony Makuch reports

LAKE SHORE GOLD REPORTS RECORD OPERATING RESULTS IN 2013, COMPANY GROWING PRODUCTION AND GENERATING FREE CASH FLOW IN 2014

Lake Shore Gold Corp. has released its financial and operating results for the fourth quarter of 2013 and full-year 2013. Full details of the results are provided in the company's management's discussion and analysis, available on the company's website and on SEDAR. Key highlights of the results include:

Fourth quarter 2013

• Net cash flow provided by continuing operating activities of $34.3-million, cash and bullion increased $18.8-million during fourth quarter, to $34-million at Dec. 31, 2013;
• Production of 51,700 ounces, more than double the 23,700 ounces produced in the fourth quarter of 2012;
• Gold sales of 49,600 ounces, up sharply from 19,900 ounces in the fourth quarter of 2012;
• Cash operating cost of $609 (U.S.) per ounce sold, 38-per-cent improvement from the fourth quarter of 2012;
• All-in sustaining cost (AISC) of $849 (U.S.) per ounce, a 52-per-cent improvement from the fourth quarter of 2012;
• Total production costs of $32-million, compared with $19.8-million in the fourth quarter of 2012, reflecting higher volumes;
• Average grade of 5.2 grams per tonne, 24 per cent higher than the fourth quarter of 2012;
• Investment in mining interests of $10.3-million, all sustaining capital;
• Net loss of $225.7-million or 54 cents per common share, including a $225-million impairment charge; adjusted net loss of $700,000 before impairment charge, compared with net loss of $300,000 on same basis in the fourth quarter of 2012;
• Before impairment charge of $225-million, adjusted earnings from mine operations totalled $11.7-million, more than triple the fourth quarter 2012 level of $3.3-million on same basis.

Full-year 2013

• Net cash flow provided by continuing operating activities of $70.6-million, cash and bullion reduced by $27-million, reflecting, in part, investment of $90.4-million;
• Production of 134,600 ounces, a 57-per-cent increase from 2012 and at the top end of the guidance range of 120,000 to 135,000 ounces;
• Gold sales of 135,550 ounces, a 62-per-cent increase from 2012;
• Cash operating cost of $766 (U.S.) per ounce sold, 23 per cent lower than in 2012 and better than the target range of $800 (U.S.) to $875 (U.S.) per ounce sold;
• AISC of $1,139 (U.S.) per ounce, a 37-per-cent improvement from 2012;
• Total production costs of $107.5-million, compared with $80-million in 2012, due to strong production growth;
• Average grade of 4.6 g/t, an increase of 18 per cent from the previous year;
• Investment in mining interests of $90.4-million, in line with guidance of $90-million;
• Net loss of $233.5-million or 56 cents per common share, including a $225-million impairment charge; adjusted net loss of $8.5-million before impairment charge, compared with net loss on same basis of $15.4-million in 2012;
• Before impairment charge of $225-million, adjusted earnings from mine operations totalled $25-million, compared with $10.3-million on the same basis in 2012.

Tony Makuch, president and chief executive officer of Lake Shore Gold, commented: "We had a successful year in 2013, completing our mill expansion, increasing production by 57 per cent, improving cash operating costs to $766 (U.S.) per ounce sold, making approximately $20-million of debt repayments to Sprott and generating free cash flow during the fourth quarter. We also extended the maturity of our standby line of credit and negotiated improvements to our debt covenants that provide us with greater flexibility. The momentum we established has continued into 2014, with production during the first two months of the year totalling 29,500 ounces and cash and bullion increasing to $42.1-million.

"Looking ahead, our reserves and resources support current levels of annual production (160,000 to 180,000 ounces) for the next five years. Over this period, we expect to average cash operating costs of below $700 (U.S.) per ounce and AISC below $1,000 (U.S.) per ounce. With our mining and milling infrastructure completed and in place, we have entered a very exciting time when the company is positioned to generate significant free cash flow. We have considerable leverage to the gold price and have a natural hedge related to the Canadian-dollar-U.S.-dollar exchange rate.

"Also exciting is that, after being in a depletion phase for two years, we are now in a position to replenish our resources and reserves and pursue additional growth. We launched a new exploration program in January, 2014, focused on a number of highly prospective targets at our existing operations, and are evaluating a number of our wholly owned projects at, or in close proximity to, our mines."

Outlook

In 2014, the company is targeting gold production of 160,000 to 180,000 ounces, with expected cash operating costs per ounce sold in the range of $675 (U.S.) to $775 (U.S.), AISC per ounce sold in the range of $950 (U.S.) to $1,050 (U.S.) and total production costs of $128-million. Mill throughput for the year is targeted to average 3,200 to 3,300 tonnes per day, with average grades between 4.5 and five g/t.

Based on the company's business plan for the year, and using a Canadian-dollar gold price of $1,300 per ounce, the company is well positioned to finance all cash and capital requirements and to increase its cash position during 2014. The company is planning total debt repayments in 2014 of $20-million to $25-million, with approximately $15-million related to the gold-linked note and $5-million to $10-million to be paid on the company's standby line of credit.

Impairment charge

The company recorded an impairment charge of $225-million as part of its full-year and fourth quarter 2013 results. The impairment charge represents a reduction in the estimated net carrying value of the Timmins cash-generating unit (CGU), which comprises the company's Timmins West mine and surrounding properties, the Bell Creek mine and surrounding properties, and the Bell Creek mill. Among the indicators triggering the impairment assessment was the fact that the carrying amount of the company's net assets materially exceeded its market capitalization.

Contributing to the reduction in the estimated carrying value of the Timmins CGU were lower short- and long-term gold price assumptions used in the determination of fair value. For purposes of the impairment assessment, the Canadian-dollar gold price used was $1,391 ($1,300 (U.S.)) per ounce for 2014, increasing to $1,430 ($1,300 (U.S.)) per ounce by 2017 and followed by a longer-term price of $1,443 ($1,300 (U.S.)). On average, the Canadian-dollar gold price used for the 2013 impairment assessment was $240 per ounce lower than the gold price assumptions used in 2012 for the years 2014 to 2016.

The reduction in the estimated carrying value of the Timmins CGU also reflected a decrease in resources and reserves. The company has been in a depletion phase for the last two years, with all drilling focused within existing resources, largely in support of production. As a result, no new ounces have been added to reserves or resources to replace production or to offset losses. Over the last year, 140,000 contained ounces were mined from the company's Timmins West and Bell Creek mines. In addition, 190,000 ounces have been removed from the Timmins West mine reserves, reflecting a significant reduction in the assumed average gold price and the results of extensive definition drilling, which have indicated lower grades and changes in the interpretation of geology in some areas. The key effect of the lower grades is removal of certain low-grade sections from new resource and reserve models and more conservative projection of grades, especially near zone boundaries. When the company files an updated National Instrument 43-101 technical report for the Timmins West mine (expected by March 31, 2014), its total reserves and resources are expected to support a five-year mine plan at current production rates. The updated Timmins West mine NI 43-101 technical report assumes an weighted average gold price of $1,150 (approximately $1,100 (U.S.)) per ounce, compared with $1,500 (approximately $1,430 (U.S.)) per ounce used for the previous reserve update.

Mr. Makuch added: "The impairment charge is a non-cash charge that largely results from using lower gold prices, both for the assessment of fair value of our Timmins CGU and for the purpose of calculating our reserves and resources. We also have completed extensive drilling and used the information gained to refine our block models and geological shapes at Timmins West mine to create a solid five-year plan focused on high-quality areas that will deliver reliable, consistent production and generate free cash flow. Supported by this strong base, we are now in a position to start drilling to expand our resources and reserves, exploring for new extensions and discoveries, and advancing our other projects."

Resources (March, 2014, update)

     TIMMINS WEST MINE -- IN-SITU RESOURCE AT 1.5 G/T CUT-OFF GRADE
   
                                          Tonnes     Grade         Ounces   

Timmins deposit          Indicated     1,893,497       5.2        314,153   
                          Inferred     2,075,079       5.7        378,516   
Thunder Creek            Indicated     2,470,674       5.0        400,480   
                          Inferred       863,633       5.0        137,823   
Total Timmins West mine  Indicated     4,364,171       5.1        714,633   
                          Inferred     2,938,712       5.5        516,339   


      BELL CREEK MINE -- IN-SITU RESOURCE AT 2.2 G/T CUT-OFF GRADE                

                                         Tonnes       Grade        Ounces   

                         Indicated     4,541,722       4.6        672,047   
                          Inferred     5,934,889       4.6        872,058

Notes:
1. Mineral resources for the Timmins West mine are reported at a cut-off
   grade of 1.5 g/t gold. The cut-off grade was determined using a
   weighted average gold price of $1,150 (approximately $1,100 (U.S.))
   per ounce.  
2. Mineral resources for the Bell Creek mine are reported at a cut-off
   grade of 2.2 g/t gold. The cut-off grade was determined using a
   weighted average gold price of $1,150 (approximately $1,100 (U.S.))
   per ounce. 
3. A minimum mining width of two metres was used. 
4. Capped gold grades are used in estimating the mineral resource average
   grade. 
5. Sums may not add up due to rounding. 
6. Grades were estimated with inverse distance to the power two (ID2):
   indicated resources were defined by a maximum 30-metre search radius and
   inferred resources used up to a maximum 60-metre radius.  

Canadian Institute of Mining, Metallurgy and Petroleum (CIM) definitions were followed for classification of mineral resources.

Reserves (March, 2014, update)

              TIMMINS WEST MINE -- 3.0 G/T CUT-OFF GRADE                                  
                                                                Contained  
                                          Tonnes     Grade         ounces   

Timmins deposit          Probable      1,540,344       4.6        227,707   
Thunder Creek            Probable      1,791,821       4.6        264,539   
Total Timmins West mine
reserves                 Probable      3,332,165       4.6        492,246                                              
                          

               BELL CREEK MINE -- 3.0 G/T CUT-OFF GRADE                                    
                                                                Contained  
                                         Tonnes       Grade        ounces   

                         Probable       706,939        4.7        106,573   
Total reserves           Probable     4,039,104        4.6        598,819   

1.  Mineral reserves are included within the mineral resources. 
2.  Mineral reserves were estimated by management according to CIM
    definitions. 
3.  Mineral reserves for the Timmins West mine were reported using a cut-off
    grade of three g/t. The cut-off grade was determined using a weighted
    average gold price of $1,150 (approximately $1,100 (U.S.)) per ounce.  
4.  Mineral reserves for the Bell Creek mine were reported using a cut-off
    grade of three g/t. The cut-off grade was determined using a weighted
    average gold price of $1,150 (approximately $1,100 (U.S.)) per ounce.  
5.  Tonnage and gold ounce information is rounded to the nearest thousand.
    As a result, totals may not add exactly due to rounding.

More information regarding the general parameters used in development of the block-model mineral resource estimates for the Timmins West mine for the 2013 year-end will be provided in the Timmins West mine NI 43-101 technical report and the company's annual information form, both of which will be filed on SEDAR on or before March 31, 2014.

The general parameters used in development of the block-model mineral resource estimates for the Bell Creek mine are set out in a technical report entitled "NI 43-101 Technical Report, Resource Estimate Update and Prefeasibility Study and Mineral Reserve Estimate For Bell Creek Mine Hoyle Township Timmins, Ontario, Canada," dated March 28, 2013, and filed on SEDAR.

The calculation of mineral resources and mineral reserves has taken into account environmental, permitting, legal, title, taxation, socio-economic, marketing and political factors and constraints, not one of which is considered to have the potential to materially affect the development of the Timmins West mine or the Bell Creek mine. The mineral resource and mineral reserve estimates may be materially affected by assumptions used for commodity prices, operating and capital costs, rock mechanics (geotechnical) constraints, constant underground access to all working areas, and metal recovery.

Conference call and webcast

Lake Shore Gold will also host a conference call and webcast on Wednesday, March 19, 2014, at 10 a.m. ET to discuss the company's fourth quarter and full-year 2013 financial and operating results. Those wishing to access the call can do so using the telephone numbers that follow. The call will also be webcast and available on the company's website.

Participant call-in:  416-340-8527 or 800-766-6630

Replay number:  905-694-9451 or 800-408-3053

Redial ID:  9188050

Available until:  11:59 p.m. (March 26, 2014)

Qualified person

Scientific and technical information contained in this press release related to reserves has been reviewed and approved by Dan Gagnon, PGeo, senior vice-president, operations, and Natasha Vaz, PEng, vice-president, technical services, both of whom are employees of Lake Shore Gold and are qualified persons as defined by NI 43-101.

Scientific and technical information related to resources, drilling and all matters involving mine production geology contained in this press release, or source material for this press release, was reviewed and approved by Eric Kallio, PGeo, vice-president, exploration. Mr. Kallio is an employee of Lake Shore Gold and is a qualified person as defined by NI 43-101.

Quality control

Lake Shore Gold has a quality control program to ensure best practices in the sampling and analysis of drill core. Three quality control samples, consisting of one blank, one certified standard and one reject duplicate, are inserted into groups of 20 drill core samples. The blanks and the certified standards are checked to be within acceptable limits prior to being accepted into the GEMS SQL database. Routine assays have been completed using a standard fire assay with a 30-gram aliquot. For samples that return a value greater than three g/t gold on exploration projects and greater than 10 g/t at the Timmins mine and the Thunder Creek underground project, the remaining pulp is taken and fire assayed with a gravimetric finish. Select zones with visible gold are typically tested by pulp metallic analysis on some projects. NQ-size drill core is saw cut, and half the drill core is sampled in standard intervals. The remaining half of the core is stored in a secure location. The drill core is transported in security-sealed bags for preparation at an ALS Chemex lab in Timmins, Ont.

We seek Safe Harbor.