Shore pulls harder on Orion belt 2008-06-17 19:04 ET - Street Wire by Will Purcell Shore Gold Inc. continues a major exploration push on Orion South that has the Saskatchewan pipe barely a year behind the company's top project, Star, according to the company's senior vice-president, George Read. Shore Gold recently prepared a formal resource calculation for Star and expects to deliver a similar calculation for its top Orion pipe late next year. That could be important for the entire Saskatchewan play, as having another big source of kimberlite could improve the economics of the play as a whole. Shore's shareholders are growing impatient for some exciting news to lift their shares out of a prefeasibility funk. The stock has lost nearly two-thirds of its value in a little over a year and is struggling to stay above the $3 mark. The Orion dig Although the market's enthusiasm for Saskatchewan gems is sagging, Mr. Read is bubbling with optimism for Orion South, as well as Star. He described the company's progress with its big underground dig at Orion South as fantastic, noting the vertical shaft and underground stations are now complete. Shore is now digging laterally from the station, and its lateral drift development is now more than 25 metres from the shaft. The company is digging laterally to the north and south from the shaft, and eventually intends its drifts to curl around toward the southeast. Shore produced promising diamond grades from the early Joli Fou kimberlite it encountered while digging the shaft, but the Pense kimberlite lying below that material yielded disappointing results. Mr. Read said those results were fully anticipated, based on the findings from earlier drill programs. He said the company selected its shaft site because it allowed good access to areas with higher grades to the north and south, and not because of the local grades at the site. The diamond explorer is a big believer in the correlation between the diamond content of the rock and the grain size of the kimberlite, and that is a key factor at Orion South. Mr. Read said the company has a very good handle on what it is going to dig its way into, both north and south of the shaft. "We expect much stronger grades." He said Shore would collect a substantial amount of Type 1 early Joli Fou kimberlite to the north of the shaft, Type 2 early Joli Fou kimberlite to the south, and plenty of richer Pense kimberlite once the dig progresses farther afield. "The grades will speak for themselves," he promised, as if there is any likelihood Shore's management might be silent in such an event. Mr. Read said the dig would progress at a good pace for several months. He expects most of the sample will be above ground by the end of the year, but processing the kimberlite will continue well into 2009. Shore thinks it will be able to roll out a formal resource calculation before the end of next year. That would put the project between 12 and 18 months behind Star, and a prefeasibility study would presumably follow in early 2010. The encouragement So far, Shore Gold is averaging just 0.039 carat per tonne from the Pense rock, but the fate of Orion South will rest on the results from the early Joli Fou kimberlite. During its shaft dig, Shore recovered 2,448 diamonds weighing 356.55 carats from 2,029 tonnes of the rock. That worked out to an average of 0.176 carat per tonne and a mean diamond weight of 0.146 carat. Both averages compare favourably with what Shore found at Star. The colours of the Orion South gems may be somewhat less favourable than the Star gems, but the parcel size is still too small to yield a meaningful result. Therefore, the diamond values at Orion South may well be comparable with what Shore found at Star. Shore Gold closed up nine cents to $3.12 Monday on 2.27 million shares. |