Lake Shore Gold and West Timmins Agree to Business Combination

TORONTO, ONTARIO, Aug 27 (MARKET WIRE) --
Lake Shore Gold Corp. (TSX: LSG) ("Lake Shore Gold" or the "Company") and
West Timmins Mining Inc. (TSX: WTM) ("West Timmins") today announced that
they have signed a definitive business combination agreement under which
Lake Shore Gold has agreed to acquire all of the outstanding common
shares of West Timmins. The business combination will create the new
large-scale, wholly-owned Timmins West Gold Mine Complex on the western
Timmins mining trend, an extension of the world-class Timmins mining
trend where approximately 70 million ounces of gold have been produced
over the last century. The Timmins West Gold Mine Complex will consist of
the Company's adjacent 100%-owned Timmins Mine, with existing mine
infrastructure, the Thunder Creek Joint Venture ("Thunder Creek"), where
high-grade intercepts have been reported within 800 metres of the Timmins
shaft, and an extensive land package of adjacent exploration properties,
giving Lake Shore Gold a dominant position in this highly prospective
area.

Under terms of the agreement announced today:

- West Timmins shareholders will receive 0.73 of a Lake Shore Gold share
per West Timmins share

- Pro forma the transaction, Lake Shore Gold will be owned 67% by current
Lake Shore Gold shareholders and 33% by current West Timmins shareholders

- The transaction values West Timmins at approximately C$319 million
based on current shares outstanding

- Three of 13 seats of the Lake Shore Gold Board will go to West Timmins

- Transaction was unanimously approved by the Boards of both companies,
with the commitment of votes representing 5.3% of West Timmins common
shares having been secured

- Transaction to be completed by way of a court-approved plan of
arrangement

Tony Makuch, President and CEO of Lake Shore Gold, commented: "This is an
exciting time for the shareholders of both Lake Shore Gold and West
Timmins as we take a very important step towards building Canada's next
mid-tier gold producer. Through this combination we are creating a
dominant land position which covers about 130 square kilometers along the
Timmins gold structure west of the Mattagami River Fault, where the
geologic setting is very similar to the geology of past producing mines
in Timmins. The discoveries at Timmins Mine and Thunder Creek confirm the
exploration potential of this large land package and suggest that the
potential for additional discoveries is excellent. We are also
consolidating Thunder Creek and the Timmins Mine into one property,
creating a wholly-owned mining complex with the potential for
large-scale, long-life operations, well beyond what was originally
envisioned at the Timmins Mine. We can also potentially expedite
production from Thunder Creek by at least three years, and realize
significant synergies, through the use of the Timmins Mine
infrastructure, permits, closure plans, management and workforce. We may
also realize the reserve and resource scale to justify a dedicated mill,
providing the potential for further synergies."

Lake Shore Gold and West Timmins currently own 60% and 40% of Thunder
Creek, respectively, with Lake Shore Gold's other Timmins assets
comprised of projects nearing production, including the 100%-owned
Timmins Mine and Bell Creek Complex (Bell Creek Mill and Mine and Vogel
and Schumacher Properties). Lake Shore Gold is the operator of Thunder
Creek. In addition to its 40% interest in Thunder Creek, West Timmins has
approximately 120 square kilometres of prospective wholly-owned
exploration property in close proximity to Thunder Creek. Among these
properties are the Thorne Property, with a near 450,000 ounce inferred
resource and recent encouraging drill results including 11.15 gpt over
7.30 metres on July 6, 2009, and the 144 Property, with 4.0 kilometres of
the same volcanic/ultramafic, intrusive/sedimentary contact which hosts
the Timmins and Thunder Creek deposits. In Mexico, West Timmins owns 100%
of the high-grade Lluvia de Oro gold-silver and Montana de Oro projects.

Darin Wagner, President of West Timmins said: "This merger allows our
shareholders to rapidly transition from an exploration to a near-term
production scenario and still participate in the exploration upside of
the combined assets of the two companies moving forward. The marriage of
Thunder Creek with the Timmins Mine infrastructure, the Bell Creek
Complex and the exploration potential of our assets in Timmins are all a
natural fit. Through this transaction we reduce our effective interest in
the Thunder Creek joint venture from 40% to 33%, in the combined company,
and in doing so we add a significant interest in the Timmins Mine, the
Bell Creek Complex and additional exploration potential. This business
combination will allow for a rapid pace of development at Thunder Creek
which provides an excellent opportunity to significantly increase the
resource base and future production profile of the new company. The Board
of Directors of West Timmins recommends that shareholders vote in favour
of the transaction and the creation of a new aggressive, growth focused
gold company."

Mr. Makuch added: "Once the transaction has been completed, we plan to
commence an aggressive underground advanced exploration program at
Thunder Creek, accessing mineralization at the 240 metre level (where
results have included 24.61gpt over 7.0 metres) from the Timmins Mine
ramp and deeper mineralization at the 650 metre level (where results have
included 12.75gpt over 83.4 metres) from the Timmins Mine shaft. Based on
our current schedule, we expect to be into the Thunder Creek
mineralization by the fourth quarter of 2010 and to be bulk sampling
before the end of the year. The Timmins Mine shaft has been designed to
support a much larger operation than originally envisioned in the
pre-feasibility study. We are also considering deepening the shaft from
710 metres to 1,200 metres. Furthermore, over the next year we will be
deciding whether to undertake an expansion of our wholly-owned Bell Creek
Mill from 1,500 tonnes per day currently to 3,000 tonnes per day, or to
construct a new, stand-alone mill west of Timmins to process ore from our
Timmins West Gold Mine Complex. We have made excellent progress with our
growth plans to date, and by completing this transaction have taken
another important step towards becoming Canada's next mid-tier gold
producer."

Benefits to Lake Shore Gold Shareholders

- Creates new wholly-owned Timmins West Gold Mine Complex

- Establishes dominant land position covering approximately 130 square
kilometers along western extension of Timmins mine trend

- Unlocks significant synergies for development of Thunder Creek through
use of Timmins Mine infrastructure, permits, closure plans, management
and workforce - potentially expedites development by three years

- Creates portfolio of quality exploration assets in Timmins, along Casa
Berardi fault and in Mexico

- Delivers value to both current and new shareholders of the company

- Strong balance sheet, debt-free, and approximately C$115 million in pro
forma cash

Benefits to West Timmins Shareholders

- Provides West Timmins shareholders with near-term gold production
potential on multiple fronts

- All-share transaction allows West Timmins shareholders to continue to
participate in the exploration upside of a major land position in a
rapidly evolving gold district

- Provides for significant synergies in exploring and developing Thunder
Creek using Timmins Mine infrastructure

- Leverages Lake Shore Gold's highly experienced and successful
exploration and mine development team

- Provides for participation in cash flows from producing assets with
strong, diversified asset base

Summary of Transaction

The proposed business combination between West Timmins and Lake Shore
Gold is expected to be completed by way of a court approved plan of
arrangement whereby each West Timmins common share will be exchanged for
0.73 of a Lake Shore Gold share and West Timmins will become a
wholly-owned subsidiary of Lake Shore Gold. The number of Lake Shore Gold
shares received upon exercise, and the exercise price, of West Timmins'
outstanding options and warrants will be adjusted proportionately to
reflect the share exchange ratio. After giving effect to the transaction,
current West Timmins shareholders will own approximately 33% of Lake
Shore Gold (calculated on a fully-diluted basis). The transaction will be
subject to the approval of holders of not less than 66 2/3% of the West
Timmins common shares voted at a special meeting of shareholders that
will be called to approve the transaction. Full details of the
transaction will be included in the Management Information Circular to be
filed with the regulatory authorities and mailed to West Timmins
shareholders in accordance with applicable securities laws.

A Special Committee comprised of independent members of West Timmins'
Board was formed to consider the transaction. At meetings of the Special
Committee and Board of Directors of West Timmins held after the close of
markets on August 26, 2009, RBC Capital Markets delivered an oral
fairness opinion to the effect that as of the date thereof the
consideration to be received under the transaction is fair from a
financial point of view to the shareholders of West Timmins. The West
Timmins directors and officers have also agreed to vote their shares in
favour of the transaction under the terms of an agreement with Lake Shore
Gold.

The definitive business combination agreement entered into in connection
with the transaction includes a commitment by West Timmins not to solicit
or initiate discussions concerning alternative transactions to the
proposed transaction. If the transaction is not completed, West Timmins
has agreed to pay a termination fee to Lake Shore Gold, under certain
circumstances, of C$9 million. West Timmins has also provided Lake Shore
Gold with certain other customary rights, including a right to match
competing offers. The transaction is subject to customary closing
conditions including receipt of all necessary court and regulatory
approvals, including the approval of the Toronto Stock Exchange. The West
Timmins shareholder meeting is expected to be held on or before November
9, 2009 and the transaction is expected to close shortly thereafter.

Management Team and Board of Directors

Tony Makuch, President & CEO of Lake Shore Gold will continue to act in
his current role within the new company. The Board of Directors of Lake
Shore Gold will be comprised of 13 members, 10 from the Board of Lake
Shore Gold and 3 from the Board of West Timmins.

Advisors and Counsel

Lake Shore Gold's financial advisor is BMO Capital Markets and its legal
counsel is Cassels Brock & Blackwell LLP. The financial advisor to West
Timmins' Special Committee is RBC Capital Markets and its legal counsel
is Davies Ward Phillips & Vineberg LLP. Legal counsel to West Timmins is
Gowling Lafleur Henderson LLP. In addition, West Timmins retained Roscoe
Postle Associates Inc. as an advisor.

Conference Call

A conference call will be held on August 27, 2009 at 1pm EDT to discuss
this transaction. To listen to this conference call, please dial:

Local access: 416-641-2140 or 800-766-6630

A webcast will also be available at Lake Shore Gold's website:
www.lsgold.com

For more information see www.westtimminsmining.com

The call will be recorded and can be played back by dialing:

Local access: 416-695-5800 or 800-408-3053

Passcode: 6615122

The webcast will also be available for replay at www.lsgold.com

About Lake Shore Gold

Lake Shore Gold is a mineral development and exploration company that is
moving towards gold production through its wholly owned Timmins Mine
project, where the Company is sinking a shaft and driving a ramp to
access shallow mineralization. The wholly-owned Bell Creek Mill, located
on the east side of Timmins, was refurbished to a capacity of 800 tonnes
per day as of the end of 2008, with the Mill's capacity currently being
increased to 1,500 tonnes per day. The Company recently commenced an
underground advanced exploration program at its Bell Creek Complex,
including the Bell Creek Mine, Schumacher and Vogel properties, which
have the potential to become the Company's second mining project in the
Timmins Camp, and is pursuing a number of other highly prospective
exploration properties in Northern Ontario and Quebec. Lake Shore Gold's
common shares trade on the TSX under the symbol LSG.

About West Timmins

West Timmins is focused on the exploration and development of
district-scale gold projects in the major gold camps of North America.
Recent drill results have continued to expand the high-grade Rusk and
Porphyry Gold discoveries on the Company's Thunder Creek joint venture in
Timmins, Ontario. Drilling also continues to expand a number of zones of
gold mineralization along the Golden River Trend on West Timmins'
adjacent wholly owned Thorne Property. West Timmins is based in
Vancouver, British Columbia, Canada and trades on the Toronto Stock
Exchange under the symbol WTM.

Forward-looking Statements

Certain statements in this press release relating to the proposed
transaction and the companies' exploration activities, project
expenditures and business plans are "forward-looking statements" within
the meaning of securities legislation. The companies do 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 the required approval will be obtained from
the shareholders of West Timmins, that all third party regulatory and
governmental approvals to the transactions will be obtained and all other
conditions to completion of the transaction will be satisfied or waived,
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 companies make 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 companies 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 companies from achieving their targets. Readers should not place
undue reliance on forward-looking statements. More information about
risks and uncertainties affecting the companies and their business is
available in Lake Shore Gold's and West Timmins' most recent annual
information forms and other regulatory filings which are posted on sedar
at www.sedar.com.

There is no guarantee that drill results reported in this news release
will lead to the identification of a deposit that can be mined
economically, and further work is required to identify a reserve or
resource.

Contacts:
Lake Shore Gold
Tony Makuch
President and CEO
(416) 703-6298

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

West Timmins
Darin Wagner
President and CEO
(604) 685-8311
dwagner@westtimminsmining.com

West Timmins
John Toporowski
Manager, Investor Relations
(604) 685-8311
jtoporowski@westtimminsmining.com
www.westtimminsmining.com

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