Diamond & Specialty Minerals Summary for Dec. 31, 2015 2015-12-31 20:11 CT - Market Summary
by Will Purcell
Ken MacNeill and George Read's Shore Gold Inc. (SGF), unchanged at 17.5 cents on 1.10 million shares, has sold 11.47 million flow-through shares at 23 cents and 3.69 million regular shares at 19 cents, raising $3.33-million for exploration and working capital. This is more than the $2.8-million Shore set out to raise in early December. (The extra cash came from an additional 2.27 million flow-through shares; Canaccord Genuity Corp. exercised its option to increase the size of the offering to near the maximum limit.) Mr. MacNeill confirmed this week that he bought all the regular shares issued through the placement; to do so he gypsy swapped 2.08 million shares he owned directly and another 1.61 million held through Braemar Investment Corp.
Shore has not said where it will spend the exploration cash, but the company's consultants have laid out some recommendations. Topping the list is a revised feasibility study of the Star-Orion South project to reflect an expanded resource estimate. Shore spent over $5-million completing a dozen new large diameter drill (LDD) holes at Orion South and a feasibility study can now include several million new carats now classified as indicated. Shore also has a bounty of new carats at Star; they appeared as a result of new calculations based on old drilling. Presumably Mr. MacNeill, chief executive officer, and Mr. Read, senior vice-president, are champing at their promotional bit to tout the rosy numbers that will surely flow from the upward adjustments.
Shore's consultants, A. C. A. Howe International Ltd., also recommend more core drilling, and perhaps more LDD holes, at both Star and Orion South. The purpose of that work would be to upgrade inferred resources to at least an indicated classification, allowing the company to include those upgraded carats in its economic projections. That presumably would lead to yet another feasibility study update and still rosier economic projections.
Consultants' recommendations are often ignored by the companies that hired them but Shore is apparently planning to put Howe's suggestions into action, as it has proposed another $5.76-million budget for work starting in 2016. According to the plan, Shore would complete core drilling and feasibility work next year. The additional LDD holes would be conditional on the results of the core holes, and their costs are not included in the proposed budget. (If they do go ahead, Shore would presumably be looking at a budget for 2017 that would be comparable with the one planned for 2016.) As a result, Shore will presumably be seeking to raise more exploration cash next year, one hopes at higher prices than it recent placements.
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