this news sucks2009 budget $17.9 million
20:01 EST Tuesday, January 06, 2009
Stock Symbol: SGF: TSX
SASKATOON, Jan. 6 /CNW/ - George H. Read, P. Geo., Senior Vice President Explorationand Development, announces that, as a consequence of the current stateof the world financial and diamond markets, Shore has approved asignificantly reduced 2009 budget of$17.9 million, which includes $2.5 million for Star, $1.0 million for Star West and $9.5 millionfor the Fort a la Corne Joint Venture (FALC-JV). The budget enablesShore to focus on the completion of the prefeasibility study and thedelivery of a National Instrument 43-101 compliant reserve estimate fortheStar Diamond Project during 2009. Shoreanticipates the delivery of a full bankable feasibility study on Starby the first quarter of 2010. On the FALC-JV (Shore 60 percent, Newmont40 percent) large diameter drilling (LDD) currently underway will becompleted in late January and underground bulk sampling will terminateat the end of January. It is anticipated that the combined undergroundbulk sampling and LDD will yield a diamond parcel sufficient for theinitial NI 43-101 resource estimate on the Orion South Kimberlite,within the FALC-JV. Newmont has elected not to participate in the 2009FALC-JV budget beyond the completion of the LDD in late January.
This reduced 2009 budget combined with Shore's current cash positionand an agreement in principle for a credit facility against theCompany's investment in asset backed commercial paper (ABCP) willensure the Company's financial stability through 2010, when aproduction decision is anticipated.
The limited underground and the completion of the LDD sampling onOrion South together with the tightly constrained 2009 budget,necessitates a considerable staff reduction on-site. The budget enablesShore to maintain a core group of personnel who will be instrumental inmoving theStar Diamond Project to aproduction decision by the first quarter of 2010 and concurrentlypreparing the initial resource estimate for Orion South.
Senior Vice President Exploration and Development, George Read,states: "In the current uncertain financial markets, Shore believes itis important that we carefully manage our cash position while movingour projects toward a production decision in line with the scheduledefined by the Star - Orion South Project Proposal (SGF News ReleaseNovember 3, 2008). We are convinced that the 2009 budget enables us to makesignificant progress towards a production decision on Star whilesimultaneously estimating a resource on Orion South. This approachunfortunately comes at the expense of a considerable reduction in thesize of our staff. Many alternative work programs have beenexhaustively considered prior to making this decision. The Shoremanagement acknowledges the hard work, diligence and loyalty of ourstaff, consultants and contractors that have enabled us to evaluatethese kimberlites to date."