SGF by Will Purcell
Shore Gold Inc
Symbol SGF
Shares Issued 176,762,460
Close 2007-02-08 C$ 7.40
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Shore to try another big drill program
2007-02-09 15:19 ET - Street Wire
by Will Purcell
Shore Gold Inc. will drill a large diameter mini-bulk sample later this year on Orion South. The pipe cluster was the flagship project when De Beers Canada Inc. was running the Fort a la Corne joint venture, but Shore moved Orion North to the head of the list when it took over the project last year. Orion South nevertheless remains a priority, says Shore's vice-president of exploration, Pieter du Plessis.
The plan
Mr. du Plessis says Shore will drill 10 holes into Orion South later this year, using its big Bauer rigs. The equipment is currently wrapping up a 20-hole program on Orion North, seven kilometres northwest of Orion South. Next month, the company will move the two rigs back to Star for the final 24 holes of a gridded bulk sample.
That work should take at least a few more months to wind up based on Shore's progress so far. Mr. du Plessis said Shore likely would not start the Orion South drilling until later in the year, but "it definitely is a part of this year's work."
Shore will continue to seek regions with potentially economic combinations of grade and diamond value within the huge pipes. If the planned sample of Orion South yields the expected result, Shore would sink another vertical shaft into the richer zone to acquire a large carat parcel for valuation purposes.
Shore has a reasonable idea of what to expect at Orion South, dubbed the No. 140/141 kimberlite complex by De Beers. The diamond giant tested about 3,200 tonnes of rock over the years, and Shore completed a big core drill program on the complex since then. Mr. du Plessis said Shore would use the data already available from the historic work and would add to the information by targeting some additional kimberlite units in Orion South.
De Beers classified its kimberlite using a different method than Shore, which uses a model more in line with the age classifications used by the government geologists. Mr. du Plessis said there was a direct correlation between some, but not all of the various classification schemes.
The former resident of South Africa said Orion South contained Cantuar, Pense and early Joli Fou kimberlite, which are the main rock units of interest in Star. The De Beers tests showed that a kimberlite breccia in Orion South had the highest grades, and Shore believes the breccias occur within the early Joli Fou and Pense phases. As a result, Shore may be chasing the same rock types in Orion South as it is in Star.
The encouragement
De Beers processed 3,216 tonnes of Orion South kimberlite over a dozen years, recovering 240 carats contained in nearly 2,000 diamonds. That works out to a grade of 0.075 carat per tonne and an average stone weight of 0.121 carat. The grade is well below Shore's average for Star, but the company was intentionally chasing just its higher-grade rock in the latter pipe. In fact, the averages for Star as a whole are likely close to the Orion result.
That would bode well for finding richer zones within Orion South. De Beers calculated there was about 30 million tonnes of kimberlite in its breccia beds at Orion South, with an average grade of 0.16 carat per tonne. The diamond giant also predicted the complex held just over 100 tonnes of coarse, mega-graded kimberlite, with an average grade of 0.09 carat per tonne. De Beers used a larger cut-off, which would lower the grade estimates somewhat.
De Beers predicted the diamonds were worth nearly $100 (U.S.) per carat in 2002 and at current prices, the diamond value could be comparable with the Star pipe. If Shore's test confirms those grade and value forecasts, an underground sample seems likely.
Shore closed down 20 cents to $7.40 Thursday on 274,800 shares