This diamond isn''t for saleThis diamond isn't for sale
Murray Lyons, Saskatchewan News Network; CanWest News Service
Published: Thursday, May 31, 2007
SASKATOON -- Don't be phoning up the offices of Shore Gold Inc. to ask about buying a cut diamond extracted from the company's exploration project in Saskatchewan's Fort a la Corne forest.
Even though some of Shore's raw diamonds were recently cut and polished, they're not for sale on the retail market.
Nevertheless, shareholders at Shore's annual meeting at a downtown Saskatoon hotel were able to ogle several cut diamonds on display, including a one-carat gem set this week by Saskatoon goldsmith Ken Paulson into a platinum engagement ring.
The diamonds were cut for science, says Shore exploration vice-president George Read, who says the company also took the step to answer economic questions about how some of the large diamonds measure up on a potential wholesale market price when cut and polished.
"We've taken a 44-diamond parcel, weighing some 200 carats, that were selected for a cutting and polishing exercise," he said. "There are a variety of shapes. Some of the diamonds were very challenging and we didn't just choose the easy ones."
With 26 stones already cut in Perth, Australia, the initial results are quite encouraging, Read said.
An original rough white stone worth about $4,400, cut in Perth, saw its estimated wholesale value double to more than $9,000, Read said.
Besides the viewing of cut diamonds, Shore shareholders were given an upbeat message by Read and company president and CEO Kenneth MacNeill, who said the company continues to advance the final large-diameter drilling on the Star project as well as the adjacent Fort a la Corne joint venture which Shore controls through its 60-percent stake in partnership with gold mining giant Newmount Mining of Denver.
Their message was in contrast to market reaction of recent months as Shore's share price has been on a downward slide much of this spring. The stock closed down another 37 cents to $4.74 on Wednesday. The stock had hit a yearly high of $8.75 in March.
MacNeill says the company hopes to have a "bankable" reserve estimate for Star by 2008. It can then proceed to the next step in the process; proving that Shore has a large enough reserve of kimberlites that it could get financing for the billion-dollar-plus cost of putting an open pit mine into operation in the forest, located about 60 kilometres straight east of Prince Albert.
For now, Shore estimates that the Star kimberlite alone contains 250 million tonnes of kimberlite, while MacNeill says the kimberlites in the joint-venture project are even larger. One kimberlite, dubbed Orion North, is four times the size of the Star kimberlite.
Although MacNeill acknowledged the "street" may have been disappointed in early drill results from Orion, he says it is a positive to find so many stones greater than one carat from the large-diameter drill. MacNeill says he expects the experience gained in going underground at Star could be duplicated when the company gets ready to sink a shaft into one of the Orion kimberlites.
Shore recently jumped into Alberta with a joint venture with Diamondex Resources Ltd. to buy into the Buffalo Hills project. That project is considered Canada's third-largest prospective kimberlite zone behind the Northwest Territories and Fort a la Corne.
© The Leader-Post (Regina) 2007