Page 58 vestment for the year of approximate ly 90 million T ony Makuch president and CEO of Lake Shore commented on Aug 12 W e are very encouraged by our re sults in the second quarter which in cluded record production improved unit operating costs and excellent progress advancing our mill expan sion towards completion Commissioning of the expansion commenced late last month with our new crushing and grinding circuit now ramping up towards the new de sign capacity of over 3000 tonnes per day which is expected by early Sep tember When we achieve this level of throughput our production will in crease our unit operating costs will improve and our capital requirements will decline dramatically At that point we expect our AIS to improve to around US1000 per ounce with the company on track to generate net free cash fow during the fourth quar ter at current gold prices Looking at our cost performance more closely we were particularly pleased with the progress that was made in the second quarter Higher throughput levels and the impact of cost management initiatives helped us to pull our costs down with min ing costs during the quarter averaging 74 per tonne trucking costs averag ing 5 per tonne and processing costs averaging 22 per tonne On an ounces sold basis our cash op erating costs were increased by inven tory movements that included higher costs of production from previous pe riods capitalized in opening inventory balances Excl uding inventor y move ments and royalty payments cash op erating cost per ounce for the second quarter averaged US795 per ounce Given that we produced 3200 ounces more than we sold during the quarter unit costs on ounces produced would be even lower Our AISC in the frst half of 2013 averaged US1398 per ounce and as indicated above this number is expected to improve fol lowing comple tion of our mill expan sion The company poured 52300 ounces of gold during the frst six months of 2013 and produced 54000 ounces of gold 428560 tonnes at an average grade of 41 grams per tonne Throughput at the company s mill av eraged 2540 tonnes per day during the second quarter of 2013 includ ing over 2600 tonnes per day in both May and June Mill throughput aver aged 2370 tonnes per day during the frst six months of 2013 The company recorded a net loss in the second quarter of 2013 of 54 million or 001 per common share and 61 milli on or 001 per com mon share for the frst six months of 2013 which compared to a net loss of 20 million or 000 per common share for the second quarter of 2012 and 49 milli on or 001 per com mon share for the frst six months of 2012 The higher net loss in both the second quarter and frst six months of 2013 lar gely refected the impact of lower gold prices mainly in the second quarter as well as a 28 million in crease in interest and other fnancing costs the latter due to increa sed debt since the second quarter of 2012 Lake Shore s T immins W est Com plex is located 18 kilometres west of T immins and hosts the T immins W est Mine including the T immins and Thunder Creek deposits as well as the Gold River T rend project and 144 exploration property On the east side of T immins the Bell Creek Complex hosts the company s milling facility as well as the Bell Creek Mine Bell Creek also hosts a number of exploration properties in cluding V ogel Marlhill W etmore and others The company s third gold complex is the FennGib project located ap proximately 60 kilometres east of Bell Creek FennGib is an advanced stage exploration project which hosts a lar ge near surface potential open pitable resource and excellent poten tial for further growth Contd from pg 57 Better days ahead for Lake Shore Gold Corp