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Lake Shore Gold posts record 2014 production, reduces costs and debt

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Shares of Lake Shore Gold (TSE:LSG)(NYSE MKT:LSG) were flat on Thursday after the gold miner unveiled record 2014 production when it reported its fourth quarter and full year financial and operational results.

"During the fourth quarter, we achieved a major milestone, reaching a half million ounces of total gold production from our Timmins operations," said Lake Shore Gold president and CEO Tony Makuch.

In the fourth quarter of 2014, production reached 43,200 ounces, at an average cash operating cost of US$597/oz. sold, with all-in sustaining costs averaging US$915/oz. sold. Total production costs were $28.1 million, according to the press release.

After focusing on cost cuts in 2013, the Ontario-focused gold miner said it achieved its highest production ever in 2014 at 185,600 oz. of gold, or 38 percent higher than in fiscal 2013. The company also managed to reduce expenses, as cash operating costs fell 23 percent during the year to US$592/oz of gold while all-in costs improved 23 percent to US$872/oz.

"We had a record year in 2014 with production, cash operating costs, all-in sustaining costs and total production costs all beating our targets for the year. We also grew our cash position by over 80% and paid off most of our senior secured debt," noted Makuch.

Indeed, the company made $44.7 million of debt repayments in 2014.

Lake Shore reported a net loss of $1.5 million, or breakeven per common share, which compared to a net loss of $225.7 million or $0.54 per common share in the fourth quarter of 2013, which reflected a $225.0 million impairment charge.

Adjusted net earnings totaled $2.5 million or $0.01 per common share, compared to adjusted net earnings of $2.3 million or $0.01 per common share in the fourth quarter of 2013.

Lake Shore's shares have rebounded after falling sharply to a 52-week low of C$0.69 during the first week of March. Today, shares were largely flat at C$1.10 after gaining 6.80 percent over the last five days. They have risen just over 41 percent year to date.

Lake Shore operates three gold complexes in the Timmins Gold Camp of Ontario. The company is now targeting the top end of its guidance range for the year of 170,000 - 180,000 ounces with estimated cash operating costs per ounce sold in the range of US$650 to US$700. These targets are similar to the previous year’s target range.

Quick facts: Lake Shore Gold Corp

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TSX:LSG
Market: TSX
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