For those who missed it.23 January article in Phoenix paper. Shore spends big on diamond hunt
$87M earmarked for exploration work at Fort a la Corne
Murray Lyons, The StarPhoenix
Published: Wednesday, January 23, 2008
The diamond exploration camp in the Fort a la Corne forest should continue to be a beehive of activity this year with the decision by Shore Gold Inc. and its partner to spend nearly $95 million on assessing its diamond-bearing kimberlites in Saskatchewan.
The bulk of the money -- $86.8 million-- will be spent on the Fort a la Corne (FALC) joint venture where its partner, Newmont Mining Corp. of Canada Ltd., will supply 40 per cent of the funds, or $35.3 million.
Another project in Alberta and general expenses will push the total outlay on diamond projects involving Shore to $106.8 million, a figure George Read, senior vice-president of exploration and development, points out is the largest budget approved by Shore in its history.
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Font:****The heavy spending by the joint venture focuses on the Orion cluster of kimberlites, including the Orion South kimberlite body where shaft sinking is underway so a large bulk sample of kimberlite can be extracted.
Besides the main body of work on Orion South, the FALC joint venture will do additional core drilling on the Orion North kimberlite. Early core drilling will also be done into three other kimberlites that are part of a cluster Shore geologists have dubbed the Taurus kimberlite cluster.
These kimberlites are located slightly north and west of the Orion cluster.
The Orion shaft sinking project is similar to what Shore undertook three years ago when it sank a shaft into its wholly owned Star kimberlite body to take a large bulk sample from underground tunnels.
According to its most recent news release, Shore will spend $7.9 million this year on the Star project, doing what it calls "desktop engineering" studies and data analysis.
Shore Gold states it hopes to have what the mining investment regulators in Canada call a "National Instrument 43-101 compliant mineral reserve defined" by the middle of 2008. The reserve estimate has to be independently verified to meet that requirement.
By the end of the calendar year, Shore expects to take the reserve estimate and produce a bankable feasibility study, which would demonstrate to financiers what it would cost to build and operate a large open pit diamond mine, including what the expected annual revenues and operating costs would be.
While most of Shore's exploration budget will be spent in Saskatchewan, the company plans to assume half the cost of a $7-million exploration budget at its Buffalo Hills joint venture in Alberta. Shore's partner and operator in that project is Diamondex Resources Ltd.
Shore's stock price showed some recovery Tuesday, climbing 23 cents to close at $3.75. Shore's share price was hit by the general TSX sell-off of resource and stocks from other sectors last week and Monday. The share price had been as high as $4.60 early last week.
In November, when Shore raised $30 million for its exploration program through a new flow-through share offering, the issue price for those shares was at $6.30 at a time when the common shares were trading at $5.50. However, flow-through shares often carry a premium because of their tax advantage to investors.
mlyons@sp.canwest.com