Read carefully Important to note from yesterday’s press release from Shore Gold is,
“Shore has actively pursued various options for the financing of Project development. Recently, one of these options reached an advanced stage of negotiation but was not concluded due to current world economic uncertainties. In light of this development, the management and directors of Shore deem it necessary to make changes to staff and leadership to meet current corporate priorities.”
The release does not say he deal was dropped, nor that the financier walked away, rather, it infers that the financier stepped back to look at the global situation. It also reveals that the team was nearly successful in closing a deal – this would be a large-scale event.
Given the magnitude of the news release, I assume that it was worded extremely carefully.
This aligns with the review below from Miningweekly.com
RDG
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Big cuts at Shore Gold as crisis scuppers funding plans
By: Matthew Hill
1st March 2012
TORONTO (miningweekly.com) – Spare a thought for a junior looking to raise nearly C$2-billion to build a diamond mine in these rough markets.
Shore Gold, trying to do just that, said on Wednesday it was far down the path with a potential backer, but then the European debt crisis and its wave of negative sentiment capsized the deal.
As a result, the TSX-listed company has decided to cut back its staffing levels to the bare minimum required to complete environmental permitting at its Star-Orion South diamond project, with even the board of directors shrinking by three heads to five.
COO Harvey Bay has agreed to step down from his full-time job, but will remain as CFO and a board member.
Administration VP Duane DeRosier and corporate affairs VP Eric Cline will both leave at the end of March.
Shore is cutting its staff complement by around one-third to 15, with the technical department seeing the biggest cuts.
In a statement, CEO Kenneth MacNeill thanked the departing directors, and wished them luck.
Exploration and development VP George Read said the cuts were important to conserve cash and protect the project.
“We are convinced that the project is an essential part of the world's future rough diamond supply and we will continue our efforts to source and assess financing options,” he commented.
As at November 10, Shore Gold had some $16.9-million in cash and cash equivalents and short-term investments.
A feasibility study had predicted it would cost the company C$1.9-billion to build a mine that would produce an average 1.72-million carats yearly, starting in 2017.
Construction on what would be Saskatchewan’s first diamond mine was to start in the third quarter of this year.
Shore Gold ended the day 3.6% lower – it made the announcement after the closing bell had already tolled – with shares going for C
.405 apiece. That valued the firm at C$90-million.