credit agreement modification agreement

LAKE SHORE GOLD CORP.as Borrower

and

SPROTT RESOURCE LENDING PARTNERSHIPas Agent

and

THE SEVERAL LENDERSFROM TIME TO TIME PARTIES HERETO

THIRD CREDIT AGREEMENT MODIFICATION AGREEMENT

Dated as of August 29, 2012

Third Credit Agreement Modification Agreement

THIRD CREDIT AGREEMENT MODIFICATION AGREEMENT dated as ofAugust 29, 2012 between Lake Shore Gold Corp., a corporation incorporated under the laws of Canada(the "Borrower"), the several lenders from time to time parties hereto as Lenders (each a "Lender" and,collectively, the "Lenders") and Sprott Resource Lending Partnership, as administrative agent (the"Agent").

WHEREAS the Borrower, the Lenders and the Agent entered into a credit agreementdated as of June 13, 2012 (the "Credit Agreement");

WHEREAS the Borrower, the Lenders and the Agent entered into a credit agreementmodification agreement dated as of June 29, 2012 (the "Credit Agreement Modification Agreement');

WHEREAS the Borrower, the Lenders and the Agent entered into a second creditagreement modification agreement dated as of August 20, 2012 pursuant to which the Lenders agreed tomake certain accommodations to permit the Borrower to proceed with the Subordinated DebentureOffering (as defined below) (the "Second Credit Agreement Modification Agreement", and togetherwith the Credit Agreement and the Credit Agreement Modification Agreement, the "FacilityAgreements");

AND WHEREAS the Borrower has requested additional accommodations of theLenders not provided for in the Second Credit Agreement Modification Agreement, specifically to permitMaterial Subsidiaries of the Borrower to guarantee the obligations of the Borrower under theSubordinated Debentures and the Subordinated Debenture Indenture and to permit the payment ofaccrued but unpaid interest on Subordinated Debentures in cash upon the conversion of suchSubordinated Debentures;

NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of themutual covenants and agreements herein contained and for other good and valuable consideration (thereceipt and sufficiency of which are hereby acknowledged), the parties hereto covenant and agree asfollows:

ARTICLE 1INTERPRETATION

1.1 Defined Terms

Unless otherwise defined herein, all defined terms shall for all purposes of thisAgreement, or any amendment, substitution, supplement, replacement, restatement or addition hereto,have the meanings given in the Facility Agreements.

1.2 Other Usages

References to "this Agreement', "the Agreement", "hereof', "herein", "hereto" andlike references refer to this Agreement and not to any particular Article, Section or other subdivision ofthis Agreement. Any references herein to any agreements or documents shall mean such agreements ordocuments as amended, supplemented, restated or otherwise modified from time to time in accordancewith the terms hereof and thereof.


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1.3 Headings

The division of this Agreement into Articles and Sections and the insertion of headings inthis Agreement are for convenience of reference only and shall not affect the construction orinterpretation of this Agreement.

1.4 Applicable Law

This Agreement shall be governed by and construed in accordance with the laws of theProvince of Ontario and the federal laws of Canada applicable therein. Any legal action or proceedingwith respect to this Agreement may be brought in the courts of the Province of Ontario and, by executionand delivery of this Agreement, the parties hereby accept for themselves and in respect of their property,generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts. Each partyirrevocably consents to the service of process out of any of the aforementioned courts in any such actionor proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to suchparty to the address prescribed by Section 12.1 of the Credit Agreement, such service to become effectivefive Banking Days after such mailing. Nothing herein shall limit the right of any party to serve process inany manner permitted by law or to commence legal proceedings or otherwise proceed against any otherparty in any other jurisdiction.

1.5 Time of the Essence

Time shall in all respects be of the essence of this Agreement.

ARTICLE 2CONDITIONS PRECEDENT

2.1 Conditions Precedent

Notwithstanding any other term of the Second Credit Agreement ModificationAgreement, this Agreement and the Second Credit Agreement Modification Agreement are subject to andshall only become effective upon the Agent receiving the written consent of UniCredit Bank AG to theterms of this Agreement and the Second Credit Agreement Modification Agreement, in form andsubstance satisfactory to the Agent.

Notwithstanding the preceding sentence, it is acknowledged that the Borrower will payout and discharge all obligations owing by it under the Senior Credit Facilities and all security thereforand terminate the Senior Credit Facilities concurrently with or immediately following the issuance of theSubordinated Debentures, pursuant to a closing escrow under which the Subordinated Debentures will notbe released from the closing escrow unless and until all obligations owing by the Borrower to UniCreditBank AG under the Senior Credit Facilities have been paid in full, all security therefor discharged and tl~eSenior Credit Facilities terminated. If for any reason this does not occur, then both this Agreement andthe Second Credit Agreement Modification Agreement shall be null and void and be of no force andeffect as of the date hereof and thereof.

2.2 Evidence of Satisfaction of Conditions Precedent

The Borrower shall provide the Agent with evidence satisfactory to the Lender of thesatisfaction of the conditions precedent set forth in Section 2.1 above, including all acknowledgements,consents, releases and discharges of UniCredit Bank AG as the Agent may require, in form and on terms


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acceptable to the Agent, on or before September 7, 2012 or such later date as the Agent may agree to inwriting, failing which, this Agreement shall terminate and be of no force and effect.

ARTICLE 3AMENDMENTS TO DEFINITIONS

3.1 Definitions

(a) The definition of "Change of Control" contained in Section 1.1 of the Credit Agreementis hereby amended by deleting that definition in its entirety and replacing it with thefollowing:

""Change of Control" means, if after the Closing Date,

(a) any Person or one or more Persons acting jointly or in concert shall (a) acquire orotherwise become possessed of beneficial ownership (whether directly orindirectly and by whatever means) of more than 20% of the voting Shares of theBorrower or all or substantially all of the assets of the Borrower, or (b) succeedin having a sufficient number of nominees elected to the board of directors of theBorrower such that such nominees, when added to any existing directorremaining on the board of directors of the Borrower after such election who is anominee of such Person, will constitute a majority of the board of directors of theBorrower;

(b) at any time, during any period of 4 consecutive calendar weeks, a number ofdirectors of the Borrower which, in the aggregate, is equal to or greater than amajority of all of the directors of the Borrower at the beginning of such 4calendar week period, resigns; or

(c) there shall occur a Change of Control (as that term is defined in the SubordinatedDebentures or the Subordinated Debenture Indenture)."

(b) The definition of "Distribution" contained in Section 1.1 of the Credit Agreement ishereby amended by deleting that definition in its entirety and replacing it with thefollowing:

""Distribution" means:

(a) the declaration, payment or setting aside for payment of any dividend or otherdistribution on or in respect of any Shares in the capital of the Borrower, otherthan a dividend declared, paid or set aside for payment by the Borrower which ispayable in Shares of the Borrower;

(b) the redemption, retraction, purchase, retirement or other acquisition (which, forgreater certainty, shall exclude the conversion of the Subordinated Debentures),in whole or in part, of any Shares in the capital of the Borrower, the SubordinatedDebentures or any securities, instruments or contractual rights capable of beingconverted into, exchanged or exercised for Shares in the capital of the Borrower,including, without limitation, options, warrants, conversion or exchangeprivileges and similar rights; and


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(c) the payment or prepayment of interest or the repayment or prepayment ofprincipal with respect to (i) the Subordinated Debentures or (ii) any Indebtednessof the Borrower which is subordinated to the Secured Obligations."

(c) The definition of "Permitted Indebtedness" contained in Section 1.1 of the CreditAgreement is hereby amended by adding a new Subsection (k) to read as follows:

"(k) unsecured guarantees granted by any Material Subsidiary of the Borrowerguaranteeing the obligations under the Subordinated Debentures and the Subordinated DebentureIndenture following the satisfaction in full of all obligations under Section 8.1(s) of the Credit Agreementin respect of such Material Subsidiary."

ARTICLE 4EVENT OF DEFAULT

4.1 Event of Default

(a) Section 10.1 of the Credit Agreement is hereby amended by adding a new Subsection (s)to read as follows:

"(s) the occurrence of an Event of Default (as that term is defined in the SubordinatedDebentures or the Subordinated Debenture Indenture) or any event or circumstance under which anyIndebtedness is accelerated under the Subordinated Debentures or the Subordinated DebentureIndenture."

4.2 Acknowledgement

(a) The Borrower has advised the Lenders that the issuance of the Subordinated Debenturesby the Borrower will result in an Event of Default under the Senior Credit Facility (byvirtue of the fact that the indebtedness created by the Subordinated Debentures is notPermitted Indebtedness under the Senior Credit Facility), which in turn will result in anEvent of Default under the Credit Agreement. Provided that the Borrower pays out anddischarges all obligations owing under the Senior Credit Facility and all security thereforconcurrently with or immediately following the issuance of the Subordinated Debentures,the Lenders agree to waive the Event of Default under the Credit Agreement resultingfrom the issuance of the Subordinated Debentures in contravention of the terms of theSenior Credit Facility.

ARTICLE 5DISTRIBUTIONS

5.1 Distributions

(a) Section 8.2(e) of the Credit Agreement, as previously amended by Section 3.1(e) of theSecond Credit Agreement Modification Agreement is hereby deleted in its entirety andreplaced with the following:

"(e) Distributions. The Borrower shall not make any Distributions (i) other thanregularly scheduled interest payments in respect of the Subordinated Debentures, provided always that noDefault or Event of Default shall have occurred and that the making of any such regularly scheduledinterest payments in respect of the Subordinated Debentures would not cause or result in and could not


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reasonably be expected to cause or result in the occurrence of a Default or an Event of Default, (ii) otherthan the payment of accrued but unpaid interest on Subordinated Debentures in cash upon and inconnection with the conversion of such Subordinated Debentures into common shares in the capital of theBorrower in accordance with the terms of the Subordinated Debentures and the Subordinated DebentureIndenture, (iii) other than the payment of principal and all accrued but unpaid interest, in cash orotherwise, on the Subordinated Debentures on September 30, 2017, being the stated maturity date thereof,(iv) except as permitted in Sections (i), (ii) and (iii) above, at any time before the occurrence of a Defaultor an Event of Default without the prior written approval of the Agent, with the consent of the MajorityLenders, which approval shall not be unreasonably withheld; or (v) at any time after the occurrence of aDefault or an Event of Default."

ARTICLE 6MISCELLANEOUS

6.1 General Rule

Subject to the terms and conditions herein contained, the Facility Agreements are herebyamended to the extent necessary to give effect to the provisions of this Agreement and to incorporate theprovisions of this Agreement into the Facility Agreements.

6.2 Future References to the Credit Agreement

On and after the date of this Agreement, (i) each reference in the Facility Agreements to"this Agreement", "hereunder", "hereofl', or words of like import referring to the Credit Agreement, andeach reference in any related document to the "Credit Agreement", "thereunder", "thereofl', or words oflike import referring to the Credit Agreement, and (ii) each reference in the other Credit Documents to theCredit Agreement, shall mean and be a reference to the Facility Agreements as amended hereby. TheFacility Agreements, as amended hereby, are and shall continue to be in full force and effect and arehereby in all respects ratified and confirmed.

6.3 Enurement

This Agreement shall enure to the benefit of and shall be binding upon the parties heretoand their respective successors and permitted assigns.

6.4 Conflict

If any provision of this Agreement is inconsistent or conflicts with any provision of theFacility Agreements, the relevant provision of this Agreement shall prevail and be paramount.

6.5 Counterparts

This Agreement may be executed in one or more counterparts, each of which shall bedeemed to be an original and all of which taken together shall be deemed to constitute one and the sameinstrument.

6.6 Entire Agreement

This Agreement amends and modifies the Facility Agreements and together with themand the agreements referred to therein and delivered pursuant thereto, constitute the entire agreement


between the parties hereto and supersedes any prior agreements, undertakings, declarations,representations and understandings, both written and verbal, in respect of the subject matter hereof.

6.7 Amendments

This Agreement may only be amended or modified by further written instrument,executed and delivered by each of the parties hereto.

[The remainder of this page is intentionally left blank. Signature pages follow]

Third Credit Agreement Modificfition Agreement

IN WITNESS WHEREOF the parties hereto have executed and delivered this Agreement on thedate first written above.

LAKE SHORE GOLD CORP.

By: "Anthony Makuch "Authorized Signatory

By: "Mario Stifano "Authorized Signatory


SPROTT RESOURCE LENDINGPARTNERSHIP, by its managing partner SprottLending Consulting Limited Partnership, by itsgeneral partner Sprott Lending Consulting GPInc., as Agent

By: "Peter Grosskopf"Authorized Signatory

By: "Narinder Nags "Authorized Signatory

SPROTT RESOURCE LENDINGPARTNERSHIP, by its managing partner SprottLending Consulting Limited Partnership, by itsgeneral partner Sprott Lending Consulting GPInc., as Lender


By: "Narinder Nagra"Authorized Signatory


SAMGENPAR LTD., as Lender

By: "Steven Rostowsky "Authorized Signatory


EXPLORATION CAPITAL PARTNERS 2000LIMITED PARTNERSHIP, by its generalpartner, Resource Capital InvestmentCorporation, as Lender

By: "Rick Rule "Authorized Signatory


DUNDEE CORPORATION, as Lender

By: "Sivan Fox "Authorized Signatory

By: "Lill Mance"Authorized Signatory


SIGNED AND DELIVERED in the presence of:

"Tracy Hahn " )(Signature) )

Tracy Hahn )(Print Name) )

Suite 1028, 550 Burrard Street, Vancouver BC, )V6C 2B5 )(Address) )

Executive Assistant )(Occupation) )

"A. Murrav Sinclair"A. MURRAY SINCLAIR


CIDEL TRUST COMPANY, in trust for RRSP#135300 (Stewart Robertson), as Lender

By: "Laura Harewood "Authorized Signatory



and


and


SECOND CREDIT AGREEMENT MODIFICATION AGREEMENT

Dated as of August 20, 2012

Second Credit Agreement Modification Agreement

SECOND CREDIT AGREEMENT MODIFICATION AGREEMENT dated as ofAugust 20, 2012 between Lake Shore Gold Corp., a corporation incorporated under the laws of Canada(the "Borrower"), the several lenders from time to time parties hereto as Lenders (each a "Lender" and,collectively, the "Lenders") and Sprott Resource Lending Partnership, as administrative agent (the"Agent").

WHEREAS the Borrower, the Lenders and the Agent entered into a credit agreementdated as of June 13, 2012 (the "Credit Agreement");

WHEREAS the Borrower, the Lenders and the Agent entered into a credit agreementmodification agreement dated as of June 29, 2012 (the "Credit Agreement Modification Agreement",and together with the Credit Agreement, the "Facility Agreements");

AND WHEREAS pursuant to a news release issued by the Borrower on August 17,2012, the Borrower has publicly announced its intention to proceed with the issue of SubordinatedDebentures (as defined below);

AND WHEREAS the proceeds of the offering of Subordinated Debentures are to beused in part to pay out and discharge in full all indebtedness and obligations due or coming due toUniCredit Bank AG pursuant to the Senior Credit Facilities;

AND WHEREAS pursuant to Section 82(fl of the Credit Agreement, the Borrower isprohibited from creating, incurring, assuming or suffering to exist any Indebtedness other than PermittedIndebtedness;

AND WHEREAS pursuant to Section 8.2(e) of the Credit Agreement, the Borrower isprohibited from making any Distributions without the prior writte approval of the Agent, with theconsent of the Majority Lenders;

AND WHEREAS the Indebtedness to be created pursuant to the SubordinatedDebentures does not constitute Permitted Indebtedness and, accordingly, the Borrower has requested thatthe Agent and the Lenders agree to amend the Facility Agreements to permit the Borrower to incur theIndebtedness to be created pursuant to the Subordinated Debentures;

AND WHEREAS regularly scheduled payments of interest to be made by the Borrowerin accordance with the terms of the Subordinated Debentures constitute Distributions and, accordingly,the Borrower has requested that the Agent and the Lenders agree to amend the Facility Agreements topermit the Borrower to make regularly scheduled payments of interest in respect of the SubordinatedDebentures;

AND WHEREAS the Agent and the Lenders have agreed to amend the FacilityAgreements to (a) permit the Borrower to incur the Indebtedness to be created pursuant to theSubordinated Debentures and (b) permit the Borrower to make regularly scheduled payments of interestin accordance with the terms of the Subordinated Debentures on and subject to the terms of thisAgreement.



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1.1 Defined Terms

Unless otherwise defined herein, all defined terms shall for all purposes of thisAgreement, or any amendment, substitution, supplement, replacement, restatement or addition hereto,have the meanings given in the Facility Agreements.

1.2 Other Usages

References to "this Agreement", "the Agreement", "hereof ', "herein", "hereto" andlike references refer to this Agreement and not to any particular Article, Section or other subdivision ofthis Agreement. Any references herein to any agreements or documents shall mean such agreements ordocuments as amended, supplemented, restated or otherwise modified from time to time in accordancewith the terms hereof and thereof.

1.3 Headings


1.4 Applicable Law

This Agreement shall be governed by and construed in accordance with the laws of theProvince of Ontario and the federal laws of Canada applicable therein. Any legal action or proceedingwith respect to this Agreement may be brought in the courts of the Province of Ontario and, by executionand delivery of this Agreement, the parties hereby accept for themselves and in respect of their property,generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts. Each partyirrevocably consents to the service of process out of any of the aforementioned courts in any such actionor proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to suchparty to the address prescribed by Section 12.1 of the Credit Agreement, such service to become effectivefive Banking Days after such mailing. Nothing herein shall limit the right of any party to serve process inany manner permitted by law or to commence legal proceedings or otherwise proceed against any otherparty in any other jurisdiction.



ARTICLE 2CONDITIONS PRECEDENT

2.1 Conditions Precedent

Notwithstanding any other term of this Agreement, this Agreement is subject to and shallonly become effective upon the satisfaction or waiver in writing by the Agent of the following conditionsprecedent:


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(a) the payout and discharge of all liabilities and obligations under the Senior CreditFacilities;

(b) the release and discharge of all security granted in respect of the Senior Credit Facilities;

(c) the consent of UniCredit Bank AG to the terms of this Agreement; and

(d) the termination of the intercreditor agreement dated as of June 13, 2012 among theBorrower, Unicredit Bank AG and the Lender.

2.2 Evidence of Satisfaction of Conditions Precedent

The Borrower shall provide the Agent with evidence satisfactory to the Lender of thesatisfaction of the conditions precedent set forth in Section 2.1 above, including all acknowledgements,consents, releases and discharges of UniCredit Bank AG as the Agent may require, in form and on termsacceptable to the Agent, on or before September 7, 2012 or such later date as the Agent may agree to inwriting, failing which, this Agreement shall terminate and be of no force and effect.

ARTICLE 3AMENDMENTS TO DEFINITIONS

3.1 Definitions

(a) Section (c) of the definition of "Distribution" contained in Section 1.1 of the CreditAgreement is hereby amended by deleting that Section (c) and replacing it with thefollowing:

"(c) the payment or prepayment or interest or the repayment or prepayment ofprincipal with respect to (i) the Subordinated Debentures, or (ii) any Indebtedness of the Borrower whichis subordinated to the Secured Obligations."

(b) The definition of "Permitted Indebtedness" contained in Section 1.1 of the CreditAgreement is hereby amended by adding a new Subsection (j) to read as follows:

""Indebtedness in respect of the Subordinated Debentures incurred in connection with theclosing of the Subordinated Debenture Offering, including the exercise of the over-allotment option, up toa maximum principal amount of CAD$103,500,000, together with interest accruing thereon at the rate of6.25% per annum."

(c) Section 1.1 of the Credit Agreement is hereby amended by deleting the definition of"Senior Credit Facilities" and replacing it with the following:

""Senior Credit Facilities" means credit facilities made available to the Borrowerpursuant to a credit agreement (the "Senior Credit Agreement') dated as of February 24, 2011 betweenthe Borrower, the lending institutions from time to time parties thereto as lenders, and UniCredit BankAG, as administrative agent, and any replacement thereof approved in writing by the Majority Lenderswhere any such replacement facility is on substantially similar terms, in either case, therein providing fora revolving term credit facility in a maximum principal amount of up to USD50,000,000."

(d) Section 1.1 of the Credit Agreement is hereby amended by adding the followingdefinitions:


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""Subordinated Debenture Offering" means the offering of the SubordinatedDebentures substantially in accordance with the terms set forth in the Borrower's news release datedAugust 17, 2012."

""Subordinated Debentures" means the CAD$90,000,000 principal amount convertiblesenior unsecured debentures to be issued by the Borrower at a price of $1,000 per debenture, with aninterest rate of 6.25% per annum, payable semi-annually on the last day of March and Septembercommencing on March 31, 2013, maturing on September 30, 2017, as publicly announced by theBorrower pursuant to a news release dated August 17, 2012, together with up to an additionalCAD$13,500,000 principal amount convertible senior unsecured debentures to be issued by the Borroweron the same terms to cover over-allotments, if any, in connection therewith."

(e) Section 8.2(e) of the Credit Agreement is hereby deleted in its entirety and replaced withthe following:

"(e) Distributions. The Borrower shall not make any Distributions (i) other thanregularly scheduled interest payments in respect of the Subordinated Debentures, provided always that noDefault or Event of Default shall have occurred and that the making of any such regularly scheduledinterest payments in respect of the Subordinated Debentures would not cause or result in and could notreasonably be expected to cause or result in the occurrence of a Default or an Event of Default, (ii) exceptas permitted in Section (i) above, at any time before the occurrence of a Default or an Event of Defaultwithout the prior written approval of the Agent, with the consent of the Majority Lenders, which approvalshall not be unreasonably withheld; or (iii) at any time after the occurrence of a Default or an Event ofDefault."

ARTICLE 4EQUITY OFFERING COVENANT

4.1 Acknowledgement of Satisfaction of Equity Offering Covenant

The Lender hereby acknowledges and agrees that upon the closing and issuance of theSubordinated Debentures and the payment therefor by the subscribers thereto, the Borrower shall bedeemed to have satisfied the equity offering covenant contained in Section 8.1(w) of the CreditAgreement.

ARTICLE 5FENN-GIB AND THORNE PROPERTY SECURITY

5.1 Covenant to P-ovide Security and Title Opinion

Section 8.1(bb) of the Credit Agreement is hereby amended by deleting reference to"September 1, 2012" and replacing it with "September 15, 2012".

ARTICLE 6PRIORITY RANKING

6.1 Priority Ranking

(a) Section 7.1(aa) of the Credit Agreement is hereby amended by deleting that Section in itsentirety and replacing it with the following:


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"Priority Ranking. The payment obligations of the Borrower under the Credit Facilitiesrank in priority to the Subordinated Debentures and all of the Borrower's unsubordinated Indebtednessother than any such Indebtedness which is preferred by mandatory provisions of Applicable Law oroutstanding under the Senior Credit Facilities."

(b) Section 8.1(u) of the Credit Agreement is hereby amended by deleting that Section in itsentirety and replacing it with the following:

"Priority Ranking. The Borrower shall cause its payment obligations under the CreditFacilities to rank at all times in priority to the Subordinated Debentures and all of the Borrower'sunsubordinated Indebtedness other than any such Indebtedness which is preferred by mandatoryprovisions of Applicable Law and Indebtedness under the Senior Credit Facilities."


7.1 General Rule

Subject to the terms and conditions herein contained, the Facility Agreements are herebyamended to the extent necessary to give effect to the provisions of this Agreement and to incorporate theprovisions of this Agreement into the Facility Agreements.


On and after the date of this Agreement, (i) each reference in the Facility Agreements to"this Agreement", "hereunder", "hereof', or words of like import referring to the Credit Agreement, andeach reference in any related document to the "Credit Agreement", "thereunder", "thereof', or words oflike import referring to the Credit Agreement, and (ii) each reference in the other Credit Documents to theCredit Agreement, shall mean and be a reference to the Facility Agreements as amended hereby. TheFacility Agreements, as amended hereby, are and shall continue to be in full force and effect and arehereby in all respects ratified and confirmed.

7.3 Enurement

This Agreement shall enure to the benefit of and shall be binding upon the parties heretoand their respective successors and pernitted assigns.

7.4 Conflict

If any provision of this Agreement is inconsistent or conflicts with any provision of theFacility Agreements, the relevant provision of this Agreement shall prevail and be paramount.

7.5 Counterparts

This Agreement may be executed in one or more counterparts, each of which shall bedeemed to be an original and ail of which taken together shall be deemed to constitute one and the sameinstrument.


7.6 entire Agreement

This Agreement amends and modifies the Facility Agreements and together with themand the agreements referred to therein and delivered pursuant thereto, constitute the entire agreementbetween the parties hereto and supersedes any prior agreements, undertakings, declarations,representations and understandings, both written and verbal, in respect of the subject matter hereof.

7.7 Amendments


[The ieinainde of this page is intentionally left blink. Signatuje pages follow]




By: `Anthony Makuch"Authorized Signatory




By: "Jim Grosdanis "Authorized Signatory






SAMGENPAR LTD., as Lender




By: "Gretchen Carter"Authorized Signatory


DUNDEE CORPORATION, as Lender

By: "Lucie Presot"Authorized Signatory

C"Lili Mance "Authorized Signatory


SIGNED AND DELIVERED in the presence of:




Executive Assistant )(Occupation) )

"A. Murray Sinclair"A. MURRAY SINCLAIR



By: "Mohammed Patel "Authorized Signatory

By: "Bradley Gibbert"Authorized Signatory



and


and


CREDIT AGREEMENT MODIFICATION AGREEMENT

Dated as of June 2), 2012

Credit Agreement Modification Agreement - Execution Copy

CREDIT AGREEMENT MODIFICATION AGREEMENT dated as of June 29, 2012between Lake Shore Gold Corp., a corporation incorporated under the laws of Canada (the "Borrower"),the several lenders from time to time parties hereto as Lenders (each a "Lender" and, collectively, the"Lenders") and Sprott Resource Lending Partnership, as administrative agent (the "Agent").

WHEREAS the Borrower, the Lenders and the Agent have entered into a creditagreement dated as of June 13, 2012 (the "Credit Agreement");

AND WHEREAS pursuant to the Credit Agreement the Gold Loan Facility AvailabilityPeriod ends of June 29, 2012;

AND WHEREAS the Borrower has determined that additional time is required to satisfythe conditions precedent to the advance of the Gold Loan Facility as contemplated in Article 9 of theCredit Agreement;

AND WHEREAS the Agent and the Lenders have agreed to extend the Gold LoanFacility Availability Period pursuant to the terms of this Agreement;



1.1 Defined Terms

Unless otherwise defined herein, all defined terms shall for all purposes of thisAgreement, or any amendment, substitution, supplement, replacement, restatement or addition hereto,have the meanings given in the Credit Agreement.

1.2 Other Usages

References to "this Agreement', "the Agreement", "hereof ', "herein", "hereto" andlike references refer to this Agreement and not to any particular Article, Section or other subdivision ofthis Agreement. Any references herein to any agreements or documents shall mean such agreements ordocuments as amended, supplemented, restated or otherwise modified from time to time in accordancewith the terms hereof and thereof.

1.3 Headings


1.4 Applicable Law

This Agreement shall be governed by and construed in accordance with the laws of theProvince of Ontario and the federal laws of Canada applicable therein. Any legal action or proceeding


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with respect to this Agreement nay be brought in the courts of the Province of Ontario and, by executionand delivery of this Agreement, the parties hereby accept for themselves and in respect of their property,generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts. Each partyirrevocably consents to the service of process out of any of the aforementioned courts in any such actionor proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to suchparty to the address prescribed by Section 12.1 of the Credit Agreement, such service to become effectivefive Banking Days after such mailing. Nothing herein shall limit the right of any party to serve process inany manner permitted by law or to commence legal proceedings or otherwise proceed against any otherparty in any other jurisdiction.



ARTICLE 2EXTENSION OF GOLD LOAN FACILITY AVAILABILITY PERIOD

2.1 Definition of Gold Loan Facility Availability Period

The definition of "Gold Loan Facility Availability Period" in the Credit Agreement ishereby amended by deleting reference to "June 29, 2012" and replacing it with "July 16, 2012".

2.2 Termination of Credit Facilities

(a) Section 23(a)(ii) of the Credit Agreement is hereby amended by deleting reference to"June 29, 2012" and replacing it with "July 16, 2012".

(b) Section 2.3(b)(ii) of the Credit Agreement is hereby amended by deleting reference to"June 29, 2012" and replacing it with "July 16, 2012".

2.3 Conditions Precedent to Initial Extension of Credit under this Agreement

Section 9.2 of the Credit Agreement is hereby amended by deleting reference in the thirdline to "June 29, 2012" and replacing it with "July 16, 2012".


3.1 General Rule

Subject to the terms and conditions herein contained, the Credit Agreement is herebyamended to the extent necessary to give effect to the provisions of this agreement and to incorporate theprovisions of this agreement into the Credit Agreement.


On and after the date of this Agreement, (i) each reference in the Credit Agreement to"this agreement", "hereunder", "hereofl', or words of like import referring to the Credit Agreement, andeach reference in any related document to the "Credit Agreement', "thereunder", "thereof', or words oflike import referring to the Credit Agreement, and (ii) each reference in the other Credit Documents to theCredit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby. The Credit


~~

Agreement, as amended hereby, is and shall continue to be in full force and effect and is hereby in allrespects ratified and confirmed.

3.3 Enurement

This agreement shall enure to the benefit of and shall be binding upon the parties heretoand their respective successors and permitted assigns.

3.4 Conflict

If any provision of this agreement is inconsistent or conflicts with any provision of theCredit Agreement, the relevant provision of this agreement shall prevail and be paramount.

3.5 Counterparts

This Agreement may be executed in one or more counterparts, each of which shall bedeemed to be an original and all of which taken together shall be deemed to constitute one and the sameinstrument.

3.6 Entire Agreement

This Agreement amends and modifies the Credit Agreement and together with it and theagreements referred to therein and delivered pursuant thereto, constitute the entire agreement between theparties hereto and supersedes any prior agreements, undertakings, declarations, representations andunderstandings, both written and verbal, in respect of the subject matter hereof.

3.7 Amendments


The remainder of this page is intentionally left blank. Signature pages follow]




By: ` Anthony Makuch"Authorized Signatory




By: "Jim Grosdanis"Authorized Signatory






SAMGENPAIt LTU., as Lender




By: "Gretchen Carter"Authorized Signatory


DUND~~ CORPORATION, as Lender

By: "Sivan Fox "Authorized Signatory

By: "Lucie Presot"Authorized Signatory


HELMSDALE BANK CORP., as Lender

By: "Randy Barker"Authorized Signatory


SIGNED AND DELIVERED in the presenceof:




Executive Assistant )(Occupation)

`A. Murrav Sinclair"A. MURRAY SINCLAIR



By: "Laura Harewood "Authorized Signatory

By: "E. Adrian Meyer"Authorized Signatory


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