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This procedure works, after trial and error from following this guide.Refined some steps.

Get MinGW (if you didn't have)
First and foremost, have MinGW running on your computer, by downloading the installer from here.


Choose to download the latest repository catalogue, and choose to install the following components:
- C compilier
- C++ compiler
- MSYS Basic System
- MinGW Developer Toolkit

After installation, open a MinGW shell by Start>All Programs>MinGW>MinGW Shell then type

mingw-get install gcc

 then

mingw-get install mingw-utils

Test if your MinGW is working by typing.

gcc -version

Something like this should appear.


Then, install the Yasm assembler for optimal compilation of LAME by going to here (Win32.exe) and putting the .exe to the bin folder of MinGW.

 Get source of LAME
By going here.
Extract the tarball using 7-zip or other decompression software and place it somewhere.

 Compile LAME
At the MinGW shell, change working directory to the lame folder you extracted by typing

cd C:/Users/username/lame-3.99.5

Note the slash.

Then, type this

./configure --prefix=/mingw --enable-export=full

 Then to start compile type

make

then

make install

The resulting .exe of LAME is located in the bin folder of MinGW (located at the place you installed MinGW)
To make the .dll of LAME, for use as plugin in a lot of open source audio software,change directory by typing

C:/Users/username/lame-3.99.5/libmp3lame/.libs

 then  use a2dll to make the dll by typing

a2dll libmp3lame.a -o lame_enc.dll

The .dll is located in the .libs folder.

 The Binaries
If you just want the binaries and dll (for use in Audacity etc.), you can get them here.
lame.exe
lame_enc.dll