3/4 resultsSHORE GOLD INC. ANNOUNCES THIRD QUARTER RESULTS
SASKATOON, Nov. 10, 2010 (Canada NewsWire via COMTEX News Network) --
Stock Symbol: SGF: TSX
ShoreGold Inc. ("Shore" or the "Company") reports that the unauditedresults of Shore's operations for the quarter ended September 30, 2010will be filed today on SEDAR and may be viewed at www.sedar.com onceposted. A summary of key financial and operating results for thequarter is as follows:
Highlights
-- Announced the purchase of the three percent Net Profits
Interest ("NPI") for $1.0 million
-- Announced an information gathering agreement with certain First
Nation communities
-- Increase to diamond prices of 11% to 19% and improvement to the
long-term outlook for the diamond market improve Star - Orion
South Diamond Project economics
-- Working capital of $21.7 million at September 30, 2010
-- Issued and outstanding shares of 224,454,242 at September 30,
2010
Overview
Star - Orion South Diamond Project
Duringthe quarter, Shore exercised its right to purchase the three percentNPI held by a third party (See SGF News Release August 9, 2010).Fifteen claims, three of which are directly associated with the StarKimberlite, were originally staked by a third party in 1995. These weresubsequently transferred to Shore in 1997 for a consideration of thegrant of a three percent NPI, payable should a positive productiondecision be made and the property achieve commercial mineralproduction. Shore had the option to purchase the NPI any time prior to90 days after a positive production decision on any of the claims, for$1.0 million. Based on the current economics of the Star - Orion SouthDiamond Project, the Company exercised its right prior to a productiondecision being made.
The Company was also pleased to announce ithad reached an agreement with James Smith Cree Nation, ChakastaypasinBand of the Cree and Peter Chapman First Nation ("the Bands") to gatherinformation on traditional aboriginal land use and traditionalknowledge in the Fort à la Corne forest (See SGF News Release August18, 2010). This information will be used in preparation of Shore'sEnvironmental Impact Statement ("EIS") for the Star - Orion SouthDiamond Project that will be submitted to federal and provincialauthorities later this year and will form part of the EnvironmentalImpact Assessment. The agreement with the Bands follows similaragreements reached earlier this year with four other aboriginalparties, namely Sturgeon Lake First Nation, Métis Nation - SaskatchewanEastern Region II and Western Region II, and Red Earth Cree Nation.
Quarterly Results
Forthe quarter ended September 30, 2010, the Company recorded a net lossof $1.0 million or
.00 per share compared to a net loss of $1.3million or
.01 per share for the same period in 2009. The loss forthe quarters ended September 30, 2010 and 2009 were primarily due toongoing operating costs incurred by the Company exceeding interestrevenue earned on cash and cash equivalents and short-term investments.
Year to Date Results
Forthe nine-month period ended September 30, 2010, the Company recorded anet loss of $1.9 million or
.01 per share compared to a net loss of$7.4 million or
.04 per share for the same period in 2009. The lossduring 2010 was primarily due to ongoing operating costs incurred bythe Company exceeding interest revenue earned on cash and cashequivalents and short-term investments. Also contributing to the lossduring the nine-month period ended September 30, 2010 was the
.4million write-down of mineral property expenditures incurred by theCompany on certain of its mineral properties as well as the
.9million equity accounting loss on the Company's investment in WescanGoldfields Inc. The net loss for the comparative period in 2009 wasprimarily due to the $6.3 million write-down of mineral propertyexpenditures incurred by the Company on certain of its mineralproperties.
Selected financial highlights include:
___________________________________________________
| | As at | As at |
| |September 30, |Dec 31, |
|Consolidated Balance Sheets| 2010 | 2009 |
|___________________________|______________|________|
|Current assets | $ 24.1 M|$ 40.5 M|
|___________________________|______________|________|
|Capital and other assets | 243.7 M| 230.8 M|
|___________________________|______________|________|
|Current liabilities | 2.4 M| 2.1 M|
|___________________________|______________|________|
|Long-term liabilities | 1.5 M| 1.5 M|
|___________________________|______________|________|
|Share capital | 792.0 M| 795.3 M|
|___________________________|______________|________|
|Contributed surplus | 28.0 M| 26.6 M|
|___________________________|______________|________|
|Deficit | 556.1 M| 554.2 M|
|___________________________|______________|________|
_____________________________________________________________________
| |Three months |Three months | | |
| | Ended | Ended | Nine months | Nine months |
|Consolidated |September 30,|September 30,| Ended | Ended |
|Statements of| | |September 30,|September 30,|
|Income | 2010 | 2009 | 2010 | 2009 |
|_____________|_____________|_____________|_____________|_____________|
|Interest and | | | | |
|other income | $ - M| $ - M| $ 0.1 M| $ 0.1 M|
|_____________|_____________|_____________|_____________|_____________|
|Operating | | | | |
|expenses | 1.1 M| 1.4 M| 4.6 M| 4.2 M|
|_____________|_____________|_____________|_____________|_____________|
|Loss for the | | | | |
|period before| | | | |
|other items | (1.1) M| (1.4) M| (4.5) M| (4.1) M|
|_____________|_____________|_____________|_____________|_____________|
|Change in | | | | |
|fair value of| | | | |
|investments | 0.1 M| 0.1 M| 0.4 M| (0.4) M|
|_____________|_____________|_____________|_____________|_____________|
|Write-down of| | | | |
|mineral | | | | |
|properties | - M| - M| (0.4) M| (6.3) M|
|_____________|_____________|_____________|_____________|_____________|
|Loss from | | | | |
|Wescan | | | | |
|Goldfields | | | | |
|Inc. | - M| - M| (0.9) M| - M|
|_____________|_____________|_____________|_____________|_____________|
|Future income| | | | |
|taxes | - M| - M| 3.5 M| 3.4 M|
|_____________|_____________|_____________|_____________|_____________|
|Net and | | | | |
|comprehensive| | | | |
|loss for the | | | | |
|period | (1.0) M| (1.3) M| (1.9) M| (7.4) M|
|_____________|_____________|_____________|_____________|_____________|
|Loss per | | | | |
|share | (0.00)| (0.01)| (0.01)| (0.04)|
|_____________|_____________|_____________|_____________|_____________|
_____________________________________________________________________
| |Three months |Three months | | |
| | Ended | Ended | Nine months | Nine months |
|Consolidated |September 30,|September 30,| Ended | Ended |
|Statements of| | |September 30,|September 30,|
|Cash Flows | 2010 | 2009 | 2010 | 2009 |
|_____________|_____________|_____________|_____________|_____________|
|Cash flows | | | | |
|from | | | | |
|operating | | | | |
|activities | $ (1.0) M| $ (1.1) M| $ (3.9) M| $ (3.4) M|
|_____________|_____________|_____________|_____________|_____________|
|Cash flows | | | | |
|from | | | | |
|investing | | | | |
|activities | 1.4 M| 0.9 M| 4.8 M| (16.5) M|
|_____________|_____________|_____________|_____________|_____________|
|Cash flows | | | | |
|from | | | | |
|financing | | | | |
|activities | - M| 0.1 M| - M| 0.1 M|
|_____________|_____________|_____________|_____________|_____________|
|Net increase | | | | |
|(decrease) in| | | | |
|cash | 0.4 M| (0.1) M| 0.9 M| (19.8) M|
|_____________|_____________|_____________|_____________|_____________|
|Cash - | | | | |
|beginning of | | | | |
|period | 3.1 M| 2.9 M| 2.6 M| 22.6 M|
|_____________|_____________|_____________|_____________|_____________|
|Cash - end of| | | | |
|period | 3.5 M| 2.8 M| 3.5 M| 2.8 M|
|_____________|_____________|_____________|_____________|_____________|
Outlook
Asof November 5, 2010, the Company had approximately $22.1 million incash and cash equivalents and short-term investments. The Company isfocused on advancing the Star - Orion South Diamond Project based onthe positive results of the combined pre-feasibility study and MineralReserve estimate ("Combined PFS") which was announced earlier in theyear (See SGF News Release February 10, 2010). The updated modeleddiamond prices obtained during the second quarter of 2010 will have asignificant positive effect on the future economics of the Star - OrionSouth Diamond Project. These updated prices will enable a recalculationand optimization of the Star and Orion South open pits, resulting in aprobable increase in mineral reserves. In addition, since thecompletion of the diamond revaluation, prices for rough diamonds havecontinued to rise. The positive outlook for the future of diamondprices and related improved economics of the Combined PFS support theCompany's view that the Star and Orion South Kimberlites have thepotential to be developed into a world class diamond mine.
TheCompany's cash and cash equivalents and short-term investments will beused to complete certain required exploration and engineering workbased on recommendations in the Combined PFS which will facilitate aproduction decision on the Star - Orion South Diamond Project. Thiswill include desk-top engineering, data analysis, geotechnical andhydrogeological programs, recalculation and optimization of the Starand Orion South open pits based on the updated diamond price valuationand advancing the EIS. Final field work, detailed desktop engineeringand permitting are on track to support a production decision in 2011.The Company's funds will also be used to complete planned explorationprograms on Buffalo Hills and for general corporate matters. Cash andcash equivalents and short-term investments may also be used to fundvarious other exploration activities, to purchase certain constructionassets or to acquire and explore additional properties as opportunitieswarrant.
Technical Information
All technical informationin this press release has been prepared under the supervision of GeorgeRead, Senior Vice-President of Exploration and Development,Professional Geoscientist in the Provinces of Saskatchewan and BritishColumbia, and Shawn Harvey, Geology Manager, Professional Geoscientistin the Province of Saskatchewan, who are the Company's "QualifiedPersons" under the definition of NI 43-101.
Caution Regarding Forward-looking Statements
Thisnews release contains forward-looking statements within the meaning ofcertain securities laws, including the "safe harbour" provisions ofCanadian securities legislation and the United States PrivateSecurities Litigation Reform Act of 1995. The words "may," "could,""should," "would," "suspect," "outlook," "believe," "plan,""anticipate," "estimate," "expect," "intend," and words and expressionsof similar import are intended to identify forward-looking statements,and, in particular, statements regarding Shore's future operations,future exploration and development activities or other developmentplans contain forward-looking statements. Forward-looking statements inthis news release include, but are not limited to, forecasts related tothe impact of future diamond prices, the use of funds to fundexploration activities or the purchase of construction assets,potential increases in mineral reserves and the exploration ofadditional properties.
These forward-looking statements are basedon Shore's current beliefs as well as assumptions made by andinformation currently available to it and involve inherent risks anduncertainties, both general and specific. Risks exist thatforward-looking statements will not be achieved due to a number offactors including, but not limited to, developments in world diamondmarkets, changes in diamond valuations, risks relating to fluctuationsin the Canadian dollar and other currencies relative to the US dollar,changes in exploration, development or mining plans due to explorationresults and changing budget priorities of Shore or its joint venturepartners, the effects of competition in the markets in which Shoreoperates, the impact of changes in the laws and regulations regulatingmining exploration and development, judicial or regulatory judgmentsand legal proceedings, operational and infrastructure risks and theadditional risks described in Shore's most recently filed AnnualInformation Form, annual and interim MD&A, news releases andtechnical reports. Shore's anticipation of and success in managing theforegoing risks could cause actual results to differ materially fromwhat is anticipated in such forward-looking statements.
Althoughmanagement considers the assumptions contained in forward-lookingstatements to be reasonable based on information currently available toit, those assumptions may prove to be incorrect. When makingdecisions with respect to Shore, investors and others should not placeundue reliance on these statements and should carefully consider theforegoing factors and other uncertainties and potential events. Unlessrequired by applicable securities law, Shore does not undertake toupdate any forward-looking statement that may be made.