Lake Shore Gold Announces First Quarter 2008 Results

Anthony (Tony) Makuch, President and CEO of Lake Shore Gold, commented: "Supported by our progress during the first quarter of 2008, we remain on track to achieve our key targets, including completing refurbishing the Bell Creek Mill by the fourth quarter of 2008, achieving initial deliveries of development ore from Timmins West, via surface ramp, by early in 2009, completing the Timmins West shaft by mid-2009 and, pending favourable advanced exploration results, progressing into pre-production development of the primary Timmins West deposit late next year, and moving forward with other projects such as driving a surface ramp to access shallow mineralization at the Vogel property and evaluating the rehabilitation and re-opening of the Bell Creek mine."

Private Placement Transactions with Hochschild Mining Holdings Ltd.

On February 25, 2008, The Company completed a private placement transaction with Hochschild Mining Holdings Ltd. ("Hochschild"), through which Lake Shore Gold raised $64.7 million by issuing to Hochschild 28.2 million common shares at a price of $2.30 per share, resulting in Hochschild holding 19.9% of the Company's issued and outstanding shares. On April 16, 2008, the Company reached an agreement with Hochschild to raise an additional $79.0 million through a second private placement transaction, involving the sale to Hochschild of 32.9 million shares at a price of $2.40 per share. The transaction, which will increase Hochschild's interest in the Company to 35% of issued and outstanding shares, is subject to Toronto Stock Exchange and shareholder approval.

First Quarter 2008 Property Expenditure Review

Timmins West

Expenditures of $10.6 million were incurred at Timmins West during the first quarter of 2008, including $8.8 million of expenditures related to the advanced exploration program, $1.6 million of construction in progress (representing assets under construction that will be used in the advanced exploration program), and $0.2 million related to exploration drilling and related activities. Work on the advanced exploration program continued during the first quarter, with the shaft collar sunk to the 35 metre level and installation work progressing for the head frame, collar house, hoist plant, sinking arrangement and other surface infrastructure. Shaft sinking is scheduled to begin during the third quarter.

Bell Creek Mill

Expenditures at the Bell Creek mill during the first quarter of 2008 totaled $1.5 million. Work commenced in the crushing and grinding areas during the quarter. Repairs to the cone crusher were largely completed along with thorough inspections, cleaning, and lubrication of the grind mill ball wheels, pinions and main beams. Other work completed included relining the bottoms of the six carbon-in-pulp tanks, inspections of the conveyor belts and drives, and testing of electronic motors and the process control system. Work was also undertaken to re-establish the independent electric power line to the mill, which has now been completed.

Bell Creek Mine and Vogel/Schumacher

The Company incurred expenditures of $0.6 million on the Bell Creek mine and Vogel and Schumacher properties (collectively with the Bell Creek mill known as the Bell Creek Complex) in the first quarter of 2008, of which $0.4 million was related to diamond drilling at the Bell Creek mine. Drilling is being performed to test an area about 500 metres down dip of the lower extremity of the currently outlined mineral resource.

Preliminary work began during the first quarter of 2008 on an internal study for mining mineral resources above the 320 metre level at Vogel via surface ramp access. A ramp portal location was selected during the first quarter, with testing of overburden planned for the second quarter. The Company is targeting completion of the study and presentation of its results to the Company's Board of Directors during the second half of the year.

Thunder Creek

Expenditures of $0.4 million were incurred by the Company on behalf of the Thunder Creek joint venture during the first quarter of 2008 (the Company's 60% share being $0.2 million). During the first quarter, the Company received additional assay results from the ongoing diamond drill program on the property, including an intersection containing 8.57 grams per tonne gold over 9.00 metre in hole TC07-43. Other significant intersections include 27.21 grams gold per tonne over 0.90 metres, 8.52 grams per tonne gold over 2.05 metres and 6.33 grams per tonne gold over 2.60 metres (for more details refer to the press release dated March 31, 2008 on www.lsgold.com). The new gold mineralization is located 120 metres down plunge from the 24.61 grams per tonne gold over 7.00 metres intersection in hole TC07-36 announced late in 2007.

Blakelock and Little Abitibi

Expenditures totaling $0.4 million were incurred at the Company's Blakelock and Little Abitibi properties during the first quarter of 2008. An extensive reverse circulation ("RC") drill program was conducted during the first quarter, including drilling 59 RC holes primarily located on the central part of the Blakelock property. RC samples were collected from the overburden till cover and from the bedrock. Samples collected from this program will be analyzed for their gold grain content and shape in an attempt to determine proximity to the in situ source of any gold mineralization to the north, in the up-ice direction.

Casa Berardi

Expenditures of $0.6 million (net of estimated Quebec refundable tax credits of $0.5 million) were incurred at the Casa Berardi property by the Company during the first quarter of 2008. Under terms of a joint venture agreement with Aurizon Mines Ltd., Lake Shore Gold can earn a 50% interest in the Casa Berardi property by spending $5.0 million over a five-year period, with a firm commitment of $600,000 in the first year.

Tipahaakaaning

During the first quarter of 2008, several diamond drill holes were completed by Northern Superior Resources Inc., Lake Shore Gold's 50:50 joint venture partner. Northern Superior is a related party to the Company by virtue of certain common directors. The drill program is testing targets in search of the source of the previously reported strong gold grain dispersal train and builds on the geological data derived from the previous drill program. Northern Superior spent $1.7 million on the property during the first quarter, with the Company's share being $1.0 million.

First Quarter 2008 Results of Operations

Net Loss for the three months ended March 31,            2008         2007
---------------------------------------------------------------------------
 Consulting and management fees                   $   237,963   $  467,862
 General exploration                                  240,798      178,011
 Shareholder information                              169,359      142,281
 Legal and accounting                                  94,113       25,240
 Office expense                                       883,227      293,324

Write-off of resource properties and deferred

  exploration                                               -      174,786
 Depreciation of property, plant and equipment         15,812            -
 Accretion of asset retirement obligations             30,698            -
 Travel                                               104,206       30,570
                                                  ------------  -----------

Loss before interest and other income and income

 taxes                                             (1,776,176)  (1,312,074)
Interest and other income, net                        315,908      168,115

Recovery of income taxes                              914,000      171,500
                                                  ------------  -----------
Net loss for the period                           $  (546,268) $  (972,459)
                                                  ------------  -----------
                                                  ------------  -----------

Net loss for the first quarter of 2008 totaled $546,268 or $0.00 per basic and diluted share compared to a net loss of $972,459 or $0.01 per share for the same period in 2007. The lower net loss in 2008 was primarily due to a higher future income tax recovery, no write offs of resource properties in 2008 compared to $174,786 in 2007 and lower consulting and management fees, partially offset by higher office expenses.

Office expense in the first quarter of 2008 increased by $589,903 to $883,277 from $293,324 in the first quarter of 2007 mainly due to an increase in overall office salaries and the number of employees, partially offset by a decrease in stock-based compensation expense allocated to office expense. The Company reports stock-based compensation by allocating the expense to office expense for employees, consulting fees for consultants and general exploration for individuals involved in exploration work.

General exploration expenditures, which include expenditures of a general reconnaissance nature, that are not project specific or do not result in the acquisition of resource properties, in the first quarter of 2008 totaled $240,798 (first quarter of 2007 - $178,011), of which $121,539 (first quarter of 2007 - $94,297) related to the allocation of stock-based compensation expense.

Consulting and management fees were $237,963 in the first quarter of 2008 compared to $467,862 in the first quarter of 2007. Excluding the impact of allocated stock-based compensation expense (2008 -$82,452; 2007 - $264,302), consulting and management fees decreased by $48,050 in 2008, mainly reflecting higher consulting fees in 2007 related to the investigation of financing options. The decrease in stock-based compensation expense reflected the lower weighted average grant date fair value of options granted in 2008.

Shareholder information costs increased by $27,078 from $142,281 in the first quarter of 2007 to $169,359 in 2008. The increase was due to higher regulatory and transfer agent fees, as well as higher expenditures related to investor relations activities.

Travel expenses in the first quarter of 2008 were $104,206 as compared to $30,570 in the same period in 2007, while the Company incurred $94,113 of legal and accounting fees in the 2008 first quarter as compared to $25,240 in the same period a year earlier. Both increases were due primarily to increased business activity as the Company moved forward with its growth plans.

Interest and other income in 2008 increased by $147,793 from $168,115 in the first quarter of 2007, to $315,908 in the same period in 2008 mainly due to higher cash balances resulting from a private placement transaction with Hochschild Mining Holdings Ltd. in February 2008.

As a result of the tax benefits of deductible expenses and share issue costs incurred, future income tax liabilities decreased by $961,391 during the three month period ended March 31, 2008 (March 31, 2007 -$171,500). The reduction is comprised of $914,000 (March 31, 2007 - $171,500) recorded as a recovery of income tax in the statement of loss and deficit and $47,391 (March 31, 2007 - $Nil) recorded as an adjustment to share capital.

As at March 31, 2008, the Company had cash of $64.5 million and working capital of $56.9 million.

Webcast of Annual and Special Meeting

Lake Shore Gold will provide a webcast of its annual and special meeting, to be held today, Thursday, May 15, at 4:30 pm. The webcast will be available on the Company's website at www.lsgold.com and through the following url: http://events.onlinebroadcasting.com/lakeshore/051508/index.php. An audio feed of the meeting, and slides accompanying remarks by Tony Makuch, President and CEO of Lake Shore Gold, will be accessible via the webcast.

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, has begun work to refurbish its 100%-owned Bell Creek mill and is continuing drilling programs at a number of other 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 Hochschild's investment in Lake Shore Gold, and the growth and development of the Company's projects and properties 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 supplies. The Company makes no representation that reasonable business people in possession of the same information would reach the same conclusions.

Forward-looking statements include, but are not limited to, statements with respect to the future price of gold and other metals, the estimation of mineral resources, the realization of mineral resource estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, timing of completion of pre-feasibility studies, success of exploration and development activities, permitting time lines, currency fluctuations, requirements for additional capital, government regulation of exploration operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, completion of acquisitions and their potential impact on the Company and its operations, limitations on insurance coverage and the timing and possible outcome of pending litigation. In certain cases, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".

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. Such factors include, among others, risks related to the completion and integration of acquisitions and actual effects of the acquisitions; risks related to joint venture operations; actual results of current exploration activities; actual results of current reclamation activities; conclusions of future economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold and other metals; possible variations in ore resources, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities; as well as those factors discussed in the section entitled "Risk Factors" in the Company's Annual Information Form filed with Canadian provincial securities regulatory authorities. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements.

FOR FURTHER INFORMATION PLEASE CONTACT:
        Lake Shore Gold Corp.
        Tony Makuch
        President & CEO
        (416) 703-6298
        Email: info@lsgold.com

        Lake Shore Gold Corp.
        Mark Utting
        Vice-President, Investor Relations
        (416) 703-6298
        Email: info@lsgold.com
        Website: www.lsgold.com

Source: Lake Shore Gold Corp.