Lake Shore Gold Announces Closing of First Tranche of Flow-Through Financing

TORONTO, ONTARIO--(Marketwire - Dec. 30, 2009) - Lake Shore Gold Corp. (TSX:LSG - News; "Lake Shore Gold" or the "Company") today announced the closing of the first tranche of a previously announced non-brokered structured flow-through financing (the "Financing"). The Financing involves the issuance of 2.7 million shares at an average price of $5.94 per share for gross proceeds of $16.0 million. The tranche closing earlier today includes the sale of 1,366,570 structured flow-through shares for total proceeds of $8.0 million. The remainder of the Financing is expected to close in January 2010.

About Lake Shore Gold

Lake Shore Gold is a rapidly growing mining company with large land positions on the west and east sides of the Timmins Gold Camp. The Company is carrying out an underground advanced exploration program at its 100%-owned Timmins Mine project, where it has both a shaft and a ramp, and is currently commencing advanced exploration work at the adjacent Thunder Creek property. The Bell Creek Mill, located on the east side of Timmins, has been refurbished to a capacity of 1,500 tonnes per day. The Company is also making progress with an underground advanced exploration program at its Bell Creek Complex, including the Bell Creek Mine, Schumacher and Vogel properties, which is moving forward to become the Company's second mining operation in the Timmins Camp. The Company continues to invest aggressively in exploration primarily in Timmins and in select other areas of Northern Ontario and Quebec, and owns a large land position in Mexico. The Company's common shares trade on the TSX under the symbol LSG.

Forward-looking Statements

Certain statements in this press release 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 operating and capital plans will not be disrupted by issues such as mechanical failure, unavailability of parts, labour disturbances, interruption in transportation or utilities, or adverse weather conditions, that there are no material unanticipated variations in budgeted costs, that contractors will complete projects according to schedule, and that actual mineralization on properties will not be less than identified mineral reserves. 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. In particular, fluctuations in the price of gold or in currency markets could prevent the Company from achieving its targets. 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 most recent Annual Information Form and other regulatory filings which are posted on SEDAR at www.sedar.com.

Tony Makuch
Lake Shore Gold Corp.
President & CEO
(416) 703-6298
info@lsgold.com

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