Advancing the Star-Orion South diamond project was Shore Gold Inc.'s key focus in 2010, with the company spending $17.9 million on its mineral properties last year.
But while the value of the diamonds at the Fort a la Corne forest has increased and the Saskatoon company reported $15.6 million in working capital on Dec. 31, the mining firm ended the fiscal period with a $3.4-million net loss, it reported in its year-end report.
The net loss, at two cents per share, is an improvement, however, over 2009, when the company recorded a net loss of $9.1 million, or four cents per share.
Shore Gold said the 2010 losses are primarily due to $1.1 million in stock-based compensation expenses, a $700,000 adjustment in its investment in Wescan Goldfields Inc. and a $500,000 writedown of expenditures it incurred on certain mineral properties.
Ongoing operating costs that were higher than revenue from interest earned on cash, cash equivalents and short-term investments also contributed to the loss, the company said in its report.
Despite the net loss, Shore Gold said 2010 saw a series of significant milestones take place toward its goal to bring Saskatchewan's first diamond mine into production. Highlights include a NI 43-101 compliant mineral reserve estimate on the Star-Orion project, submitting an environmental impact statement for the property to the provincial government and announcing information-gathering agreements with First Nations and Metis communities in the project region.
The company says it plans to complete a final feasibility study on the project during the first half of 2011.
The Star-Orion project includes the Star diamond project, which is 100 per cent-owned by Shore Gold, and the Star West and Orion South Kimberlite, which fall within the Fort a la Corne Joint Venture (FALC-JV).
Shore Gold has a 66 per cent interest in the joint venture, with Newmont Mining Corp. of Canada Ltd. holding the remaining 34 per cent interest in the FALC-JV.