Research Capital report highlights...„Shore owns 100%of a very large,diamond-bearing kimberlite in central Saskatchewan,which hosts
more than 250 million tonnes of material (the Star Kimberlite).Results of a 25,000-tonne bulk sample
have yielded large,high-quality diamonds with an indicated average value that we estimate lies
between US$100-US$150/ct.
„Indicated average diamond values released by explorers on adjacent intrusions range from
US$133/carat to US$179/carat,additional confirmation of the high-quality nature of diamond-bearing
intrusions within the Fort a la Corne kimberlite field.
„The Star Kimberlite may be amenable to a large scale,open-pit mining operation,using mining
equipment to realize economies-of-scale.Infrastructure is excellent,and labour is readily available.We
estimate a 45,000 tpd mine may be constructed for C$550 million,potentially starting late in 2009.
„The challenge facing Shore is proving resource/reserves to 43-101 standards.Extensive additional
drilling and sampling will be required,ultimately taking up to two years to complete,and costing in
the order of C$40 million.A significant risk to the project is whether or not the bulk sample taken is
indicative of the entire intrusion.A more reliable estimate will be required for feasibility assessment.
„We think Shore represents a good investment opportunity with an acceptable risk/reward ratio.Our
target price of C$6.36 is based on the indicated discounted cash flow potential of the Star Kimberlite.
We are initiating coverage with a BUY recommendation.
The Potential for a World-Class Diamond Mine