The Saskatoon firm explained in a news release the results from a feasibility study on the project indicate it has a net present value of $2.1 billion US and is economically fit to support the construction and operation of a mine.
“The robust economics confirm that a world-class diamond mine is feasible in central Saskatchewan,” stated Kenneth MacNeill, Shore Gold’s president and CEO.
Located in the Fort a la Corne forest some 60 kilometres from Prince Albert, Star-Orion South is estimated to contain roughly 34.4 million carats. Should a mine be developed at the site, diamond-bearing kimberlite ore would be taken to the surface from two open pits. Shore Gold said such a project would take five years to bring into production and then operate over a 20-year mine life.
A mine at the site would employ hundreds of people over the construction phase and more than 500 people continuously over its two-decade life.
“The combined (feasibility study) shows that the Star and Orion South Kimberlites can be economically developed as a world class diamond mine,” stated George Read, the company’s senior vice president of exploration and development.
A project timeline included in the study shows detailed design of the mine is to start in the second half of 2011. The firm will work toward the start of construction in the third quarter of 2012 and says SaskPower will supply power to the site in the third quarter of 2013.
Should a favourable production decision be made, production at the mine would start in 2017 and end in 2036.
The Star-Orion South project is comprised of the Star Diamond project, which is 100-per-cent-owned by Shore Gold, and the Star West and Orion South kimberlites, which are part of the Fort a la Corne Joint Venture with Newmont Mining Corp. of Canada Ltd. Shore Gold owns 66 per cent of the joint venture, with Newmont holding the remaining 34 per cent.
The local company’s shares on the Toronto Stock Exchange (TSX: SGF) rose to 75 cents by mid-afternoon — a five cent, or 7.14 per cent, increase over Wednesday’s close
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