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Tahoe's acquisition of Lake Shore creates new precious metals leader


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Tahoe's acquisition of Lake Shore creates new precious metals leader

Followingits acquisition ofLake Shore Gold Corp.on April 1, Tahoe ResourcesInc. said April 4 that it has emerged as a new leader in theprecious metals sector with a well-diversified, Americas-based operatingplatform.

Thecompany's asset base is anchored by the large-scale, high-grade silver mine inGuatemala. It also includes low-cost, growing gold operation in Peru and theTimmins Gold Camp of Northern Ontario.

Tahoe andLake Shore's combined gold operations expects total gold production of 370,000ounces per annum to 430,000 ounces per annum at total cash costs of US$675 perounce of gold to US$725 per ounce of gold and all-in sustaining costs of US$950per ounce of gold to US$1,000 per ounce of gold for the year.

Tahoe alsohas a total silver production guidance for the year of 18 million ounces to 21million ounces per annum at total cash costs US$7.50 per ounce to US$8.50 perounce of silver and all-in sustaining costs of US$10 per ounce to US$11 perounce of silver.

Pro formacash and equivalents of Tahoe and Lake Shore at Dec. 31, 2015, totaled US$179.3million while pro forma net cash totaled US$115.8 million, excluding LakeShore's convertible debentures. Pro forma cash flow from operating activitiestotaled US$243.8 million or US$148 million net of sustaining capital.

"Lookingahead, we have a number of key initiatives, such as growing gold productionfrom approximately 350,000 ounces per annum in 2015 to over 550,000 ounces perannum by 2020, increasing reserves and resources in order to add mine life inall three of our key areas of operation, and achieving low unit costs tosupport strong free cash flow generation in any conceivable metals priceenvironment," said Kevin McArthur, executive chair and CEO of Tahoe.

The companyis also looking to up gold productions at Timmins West by approximately 40% to over250,000 per year by 2020 which will require recommissioning and extending theshaft at the BellCreek mine to depth, continuing to advance the project and achievingcommercial production at the 144 Gap deposit by 2017.

"Weare also contemplating a further expansion of the Bell Creek mill to 5,500tonnes per day, with the crushing and grinding circuit already commissioned forthis level of performance," McArthur added.

Tahoe willalso target a growth of 2,000,000 ounces to 4,000,000 ounces in gold reservesand resources by 2020.

Followingthe completion of the transaction, Tahoe also named Alan Moon to the company'sboard.