Mr. Kevin McArthur of Tahoe reports

TAHOE RESOURCES AND LAKE SHORE GOLD ANNOUNCE BUSINESS COMBINATION

Tahoe Resources Inc. and Lake Shore Gold Corp. have entered into a definitive agreement, whereby Tahoe will acquire all of the issued and outstanding shares of Lake Shore Gold. Under the terms of the arrangement agreement, all of the Lake Shore Gold issued and outstanding common shares will be exchanged on the basis of 0.1467 of a Tahoe common share per each Lake Shore Gold common share. Upon completion of the transaction, existing Tahoe and Lake Shore Gold shareholders will own approximately 74 per cent and 26 per cent of the pro forma company, respectively, on a fully diluted in-the-money basis.

The exchange ratio implies a consideration of $1.71 per Lake Shore Gold common share, based on the closing price of Tahoe common shares on the Toronto Stock Exchange on Feb. 5, 2016, representing a 14.8-per-cent premium to the closing price of Lake Shore Gold on Feb. 5, 2016, and a 28.6-per-cent premium to the closing share of Lake Shore Gold on Feb. 4, 2016. Based on each company's 20-day volume-weighted average price on the Toronto Stock Exchange, the exchange ratio implies a premium of 25.7 per cent and 30.4 per cent to Lake Shore Gold common shares for the periods ending Feb. 5, 2016, and Feb. 4, 2016, respectively. The implied equity value (assuming the conversion of in-the-money convertible debentures) is equal to $945-million.

Lake Shore Gold operates the low-cost Timmins West and Bell Creek mines in Timmins, Ont., Canada. Together with Tahoe's world-class Escobal mine in Guatemala, and its low-cost La Arena and Shahuindo mines in Peru, the combined company is firmly established as a premier Americas-based precious metals producer. With a diversified suite of low-cost, highly prospective assets and a quality pipeline of new development opportunities, Tahoe is well positioned to sustain and grow its production base. Further, with zero net debt, sector-leading operating margins and moderate capital requirements, the combined company will continue to generate strong free cash flows. Accordingly, following completion of the transaction, Tahoe intends to continue its dividend of two U.S. cents per share per month.

Highlights of the transaction

Key investment highlights of the pro forma company include:

• A leading Americas-based precious metals producer: The combined company will have a strong diversified producing platform anchored by the Escobal mine, one of the largest and highest-grade silver mines globally, and low-cost growing operations in Peru and Ontario.
• Significant low-cost production: Two thousand sixteen production guidance of 18 million to 21 million ounces of silver at total cash costs of $7.50 (U.S.) to $8.50 (U.S.)/ounce and all-in sustaining costs (AISC) of $10.00 (U.S.) to $11.00 (U.S.)/ounce and 370,000 to 430,000 ounces of gold at total cash costs of $675 (U.S.) to $725 (U.S.)/ounce and AISC of $950 (U.S.) to $1,000 (U.S.)/ounce. All operations generate free cash flow in the current commodity price environment.
• Low-risk growth: Growth to be driven by the expansion of Shahuindo to 36,000 tonnes per day and the advancement of a number of growth initiatives in Timmins, including the ramp-up of the 144 Gap deposit, extending the Bell Creek mine to depth and the potential for an open-pit mining operation at the Whitney project.
• Exciting exploration potential: Over 3.4 million ounces of measured and indicated gold resources, and six million ounces of inferred gold resources across eight exploration projects in Peru and Canada with strong near-mine potential to add additional gold resources. Large unexplored land packages across all regions.
• Strong balance sheet and superior financial performance: Zero net debt, modest capital requirements and strong free cash flow generation from operations provide industry leading financial strength and flexibility.

Kevin McArthur, executive chair of Tahoe, said: "The combination with Lake Shore Gold enhances Tahoe's position as the new leader in precious metals by adding another low-cost operation in Timmins, one of the most prolific gold camps in the world. We are impressed by the long-term presence and see tremendous regional opportunities going forward. We look forward to continuing the strong relationships that Lake Shore Gold has fostered in Timmins with local stakeholders. Finally, I am very pleased to welcome Alan Moon, the current chair of Lake Shore Gold, to our board of directors upon completion of the transaction, as well as Tony Makuch, the current chief executive officer of Lake Shore Gold, to Tahoe's management team as president of Canadian operations."

Tony Makuch, president and CEO of Lake Shore Gold, stated: "The combination with Tahoe represents a unique opportunity for our shareholders to gain exposure to a high-quality portfolio of long-life producing mines with substantial mineral reserves. Today's announcement of an initial resource at our 144 Gap deposit is a perfect example of the long-term growth potential of our Timmins portfolio. Tahoe's strong balance sheet and superior cash-generating capabilities will provide Lake Shore Gold with the financial resources to unlock the enormous growth potential of our asset base."

Benefits to Tahoe shareholders:

• Establishes a significant presence in Canada with well-established, low-cost operations, and a talented and focused management team;
• Enhanced high-margin gold production with organic growth opportunities;
• Strengthens Tahoe's ability to generate strong free cash flow on a per-share basis;
• Addition of significant exploration potential at existing operations as well as attractive targets in close proximity to established, well-built mining and milling infrastructure;
• Positions Tahoe to evaluate further consolidation opportunities in Ontario.

Benefits to Lake Shore Gold shareholders:

• Immediate upfront premium while maintaining meaningful equity participation;
• Superior financial strength and flexibility to support advancement of Timmins projects;
• Exposure to a large, long-life reserve base pro forma through Tahoe's world-class Escobal mine and growing low-cost platform in Peru;
• Expands operational capabilities, adding proven expertise in open-pit mining;
• Access to an attractive dividend policy;
• Increased trading liquidity, enhanced value proposition and capital markets profile.

Board of directors recommendations

The arrangement agreement has been unanimously approved by the boards of directors of Tahoe and Lake Shore Gold, and each board recommends that its respective shareholders vote in favour of the transaction.

GMP Securities LP and BMO Capital Markets have provided opinions to the board of directors of Tahoe and to the Lake Shore Gold special committee, respectively, stating that, and based upon and subject to the assumptions, limitations and qualifications set forth therein, the consideration offered pursuant to the transaction is fair, from a financial point of view, to the Tahoe shareholders and Lake Shore Gold shareholders, respectively.

Transaction summary

The proposed business combination will be effected by way of a plan of arrangement completed under the Canada Business Corporations Act. The transaction will require approval by 66-2/3 per cent of the votes cast by the shareholders of Lake Shore Gold at a special meeting of Lake Shore Gold shareholders. The issuance of Tahoe common shares in connection with the transaction will require the approval of a simple majority of the shareholders of Tahoe voting at a special meeting. Officers and directors of Lake Shore Gold and Tahoe intend to enter into voting support agreements, pursuant to which they will vote their common shares held in favour of the transaction. In addition to shareholder and court approvals, the transaction is subject to applicable regulatory approvals and the satisfaction of certain other closing conditions customary in transactions of this nature.

The arrangement agreement includes customary provisions including non-solicitation provisions, a right to match any superior proposal and a $37.8-million termination fee payable to Tahoe under certain circumstances. A $20.0-million termination fee is payable to Lake Shore Gold under certain circumstances.

A change of control offer will be made for Lake Shore Gold's outstanding 6.25-per-cent convertible senior unsecured debentures in accordance with their trust indenture dated Sept. 7, 2012. During the 30-day period following the effective date of the arrangement agreement, debentureholders will receive notice stating that a change of control has occurred along with an offer to purchase the debentures at 100 per cent of the principal amount plus accrued and unpaid interest on the date that is 30 business days following delivery of the debenture change of control notice. As part of the arrangement agreement, Lake Shore Gold has agreed not to purchase any of its outstanding securities. Accordingly, Lake Shore Gold is suspending its normal course issuer bid for the debentures.

Timing

Full details of the transaction will be included in the management information circulars of Tahoe and Lake Shore Gold, and are expected to be mailed to their respective shareholders in early March, 2016. It is anticipated that both shareholder meetings and closing of the transaction will take place in early April, 2016.

Advisers and counsel

GMP Securities LP and Canaccord Genuity Corp. acted as financial advisers to Tahoe, and McMillan LLP acted as its legal adviser.

BMO Capital Markets acted as financial adviser to Lake Shore Gold. Cassels, Brock & Blackwell LLP acted as Lake Shore Gold's legal adviser.

Conference call

Tahoe and Lake Shore Gold will host a joint conference call on Monday, Feb. 8, 2016, at 1:30 p.m. ET or 10:30 a.m. PT for members of the investment community to discuss the transaction. The call-in details are as follows:

Canada and United States toll-free:  1-800-319-4610

Outside of Canada and U.S.:  1-604-638-5340

A copy of the merger investor presentation is also available on the Tahoe and Lake Shore Gold investor pages. An audio recording of the conference call will be made available shortly after the call on the Tahoe and Lake Shore Gold investor pages.

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