SGF by Will Purcell
Shore finds new twinkle at Star
2007-01-16 13:51 ET - Street Wire
by Will Purcell
Shore Gold Inc. is wrapping up its third big bulk sample of the Star pipe on a sparkling note and the company will soon resume its large diameter drill test of the pipe. The underground test continues to be newsworthy after more than two years of work, as the company is now testing Cantuar and Pense kimberlite in areas well away from its vertical shaft. The grades and diamond values of the new rock will be key to the Star project.
The underground test
Shore now has another 464 carats of Cantuar diamonds that it gleaned from 2,753 tonnes of kimberlite taken from the area southeast of the shaft. The result indicates an average grade of 0.169 carat per tonne, comparable with what Shore is finding in the early Joli Fou kimberlite, which is the dominant phase of rock in the Star pipe.
The result suggests a diminished grade expectation for the Cantuar rock as earlier batches of the material produced a grade of about 0.20 carat per tonne. Shore now has over 1,200 Cantuar carats and about 1,036 carats came from 5,550 tonnes of kimberlite, which work out to a grade of 0.187 carat per tonne, perhaps 10 per cent better than the early Joli Fou kimberlite.
Shore's senior vice-president, George Read, said Shore expects both the Cantuar and Pense kimberlite to yield diamond grades that are at least comparable with the early Joli Fou phase, but he has a greater expectation for the diamond values. An initial assessment of the first 572 carats of Cantuar gems supports Shore's value hopes, as the 572-carat parcel received an appraisal of $145 (U.S.) per carat.
The latest result also augurs well for the diamond value. The average diamond size for the latest parcel was nearly 0.190 carat, well above the average of about 0.125 carat for the early Joli Fou kimberlite over the past two years. As a result, the numbers of one-carat gems are about one-third higher than what the main Star kimberlite phase is producing. With comparable colour and clarity, the Cantuar gems should continue to yield hefty values.
The earlier Cantuar samples came from closer to the main shaft, but the latest batches of Cantuar kimberlite are now coming from Star West. That part of the pipe lies on the adjoining joint venture property that was once the domain of De Beers Canada Inc. and Kensington Resources Ltd. Shore now shares the property with Newmont Mining Corp. of Canada Ltd., making the border crossing a trivial affair.
Shore is now into the Pense kimberlite well east of its shaft. The ramp ascends 20 metres from a starting point at the 235-metre level, and the main drift then runs eastward for another 200 metres into the previously untested kimberlite phase. Diamond recovery results from the Pense material are expected within weeks, probably some time in February.
The drill test
Shore pulled its two huge Bauer drill rigs off Star last fall to complete a quick test of Orion north, but the equipment will find its way back to Shore's top pipe, Mr. Read said. The Orion north program will end next month, and Shore plans to drill another 20 big holes into Star before wrapping up its reverse-circulation drill program this spring.
In addition to the Star holes, Shore plans to test part of the pipe that spills westward onto the joint venture property. Based on the apparent dimensions of the westernmost fringe of Star, that part of the pipe would warrant at least five tests.
Meanwhile, Shore has another joint venture kimberlite that appears to be integral with Star. The No. 134 pipe seemed a distinct magnetic anomaly several years ago, but it now appears to join with Star. Mr. Read said his preference was to treat the two as one. That seems reasonable, as Shore would have to remove the rock as ore or waste if it builds a big open pit mine at Star and the company will eventually have to assess its grade. The initial microdiamond recoveries were modest compared with Star, Star West and Orion North.
Shore closed down 14 cents to $6.22 on Monday on 280,000 shares.