A Lake Shore recovery

The price of gold has come down from the $1600,an ounce , level to it's present level-a drop of about 20%.Some of the junior gold stocks have followed suit;one of them is Lake Shore Gold.Four months ago it was in the $1.00 a share range;it has fallen recently to the $.32 range.It has come out recently with second quarter results and has rebounded to about $.45 per share.Lake Shore provided guidance for production of 120,00 to 135,000 ounces of gold in the fourth quarter of 2012.It has stuck to it and still promises to meet guidance of 120,000 to 135,000 ounces.However it stated that in 2013 it would reduce capital expenditures as it would finish constructing it's mill in the first quarter of 2013 but capital expenditures have remained high through the second quarter of 2013.Now it appears that the mill should be finished in the third quarter.This means that capital expenditures will finally fall off and they have reduced their costs of production from the $950 to $1000 an ounce down to the $750 an ounce range.A tremenduous improvement.There was some concern that the grade of gold ore was very low and that some ore might come in at a 2% level but here is Lake Shore's biggest surprise ;the ore at the Bell Creek mine came in at 3.5% and then 4%.The second quarter showed grades
 at the 4.3% level.This means that with increased capacity at it's mill and constant or increasing grades of ore that Lake Shore will increase it's production levels(in ounces of gold)gradually.Lake Shore expects a positive cash flow in the fourth quarter .With it's mill finished and ore grades rising the only variable is the price of gold but Lake Shore has counted on a low level for the rest of the year and still expects a positive cash flow in the fourth quarter.I am expecting Lake Shore to beat it's production guidelines;the rest will take  care of itself.