Star - Orion South Diamond Project Core and Large Diameter Drilling programs complete on Orion South

Stock Symbol: SGF: TSX

SASKATOON, June 15, 2015 /CNW/ - George H. Read, P. Geo., Senior Vice President Exploration and Development of Shore Gold Inc. ("Shore" or the "Company") is pleased to announce that both the Core and Large Diameter Drilling ("LDD") programs on the Orion South ("OS") Kimberlite have been successfully completed. The LDD team of Foraco Canada Limited ("Foraco"), the core drilling team of Newmac Industries Ltd. ("Newmac") and Shore project managers and drill supervisors are to be complimented on their efficient work, which has led to the completion of these programs ahead of schedule.

Core Drilling Program

The Core Drilling program included 18 vertical NQ (48 millimetre) diamond drill holes totaling 3,617 metres that intersected  1,208 metres of Early Joli Fou ("EJF") and Pense kimberlite, confirming significant new intersections of kimberlite on the western flank and southern part of the OS Kimberlite. A map of the core hole positions for this program is available on the Company website: www.shoregold.com. These significant new kimberlite intersections (up to 112 metres) extend the existing 100 metre grid drilling program already completed on OS. The major kimberlite intersections by hole of the core drilling program are listed in Table 1 below. The core will be logged in detail by Shore geologists and the results will be added to the existing Geological Model, expanding the Model to the west and the south.

Large Diameter Drilling Program

The LDD program included twelve 24 inch holes totaling 2,559.9 metres that sampled a total of 1,027.48 metres of EJF and Pense kimberlite units within the OS Kimberlite. A total of 439 wet recovered tonnes of kimberlite, in 97 samples, was collected from the twelve LDD holes. The kimberlite intersections and sample details of the LDD program are listed in Table 2 below. The samples are in the process of being shipped to Rio Tinto Canada Diamond Exploration Inc's. Thunder Bay Mineral Processing Laboratory (ISO 9001:2008 Certified). This laboratory was chosen for the commercial macrodiamond (+1.00 millimetre) recovery from the LDD kimberlite samples as its sample processing flow-sheet closely replicates that used in the past by the Shore on-site bulk sampling plant.

The LDD program aims to estimate macro-diamond grade information from strategically located drillholes. This diamond grade estimation will be used to re-estimate the Mineral Resources on the OS kimberlite. The twelve LDD holes were located within kimberlite classified as Inferred Resources by the 2011 Feasibility Study. These LDD holes will be included in the calculation of a revised Resource estimate for OS. Their addition to the LDD grid will permit the inclusion of 11 previously drilled LDD holes that were excluded from the Resource estimate of the Feasibility Study due to strictly constrained search parameters. A map of the LDD hole positions of this program is available on the Company website: www.shoregold.com.

Senior Vice President Exploration and Development, George Read, states: "The LDD program has been completed ahead of the original schedule and more than three quarters of the samples have already been shipped to the Thunder Bay Mineral Processing Laboratory where processing has commenced. This LDD program on the Orion South Kimberlite aims to provide diamond grade information at new grid locations and this additional diamond grade information will be used to revise the Mineral Resource estimate for Orion South.  The Company plans to re-optimise the open pit on Orion South using the updated Mineral Resource estimate and updated diamond prices. Thereafter, we aim to optimise the existing Feasibility Study with a revised mine plan, where Orion South is mined first. Preliminary calculations suggest that such an optimised Feasibility Study, with a new mine plan, can positively change the economic model for the Project by increasing the Mineral Resource Estimate and decreasing the pre-production capital costs and the time to achieve diamond production."

Table 1. Core Drill Hole Details

Table 2. LD Drill Hole Details

The Star-Orion South Diamond Project is located in central Saskatchewan some 60 kilometres east of the city of Prince Albert. The Project is in close proximity to established infrastructure, including paved highways and the electrical power grid, which provide significant advantages for future mine development. The Technical Report on the Feasibility Study and Updated Mineral Reserve for the Star-Orion South Diamond Project dated July 14, 2011 provided an updated Mineral Reserve Estimate for the Star and Orion South kimberlite deposits:  Probable Mineral Reserves of 279 million tonnes containing 34.4 million carats of diamonds at a weighted average price of US$242 per carat, that can be profitably mined over 20 years. In addition to the Mineral Reserve Estimate, the Star and Orion South Kimberlites have been estimated to include Inferred Resources containing 15.7 million carats.

The Project includes a four-year construction period followed by the excavation of two open-pit mines and processing of approximately 45,000 tonnes of kimberlite rock per day over a projected 20-year period. Shore's plans for decommissioning include progressive reclamation activities beginning within five years from the start of construction and will continue beyond the operations phase of the Project.

In March 2014 an estimate was made of the Target for Further Exploration ("TFFE", formerly known as "Potential Mineral Deposit") for five partially evaluated kimberlites and the portions of the Star and Orion South Kimberlites, which fall outside the Indicated and Inferred Resources previously estimated (see SGF News Release July 14, 2011). The TFFE for these seven Fort à la Corne Kimberlites is estimated to include between 983 million and 1.17 billion tonnes of kimberlite containing between 52 and 90 million carats of diamonds. The TFFE is conceptual in nature and is not a Mineral Resource and it is uncertain whether further exploration work will result in the TFFE being delineated as a Mineral Resource.

All technical information in this news release has been prepared under the supervision of George Read, Senior Vice President of Exploration and Development, Professional Geoscientist in the Provinces of Saskatchewan and British Columbia and Mark Shimell, Project Manager, Professional Geoscientist in the Province of Saskatchewan, who are the Company's "Qualified Persons" under the definition of NI 43-101.

Shore is a Canadian based corporation engaged in the acquisition, exploration and development of mineral properties. Shares of the Company trade on the TSX Exchange under the trading symbol "SGF".

Caution Regarding Forward-Looking Statements

This news release contains forward-looking statements as defined by certain securities laws, including the "safe harbour" provisions of Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "intend", "forecast", "target", "project", "guidance", "may", "will", "should", "could", "estimate", "predict" or similar words suggesting future outcomes or language suggesting an outlook. In particular, statements regarding Shore's future operations, future exploration and development activities or other development plans constitute forward-looking statements. By their nature, statements referring to mineral reserves, mineral resources or TFFE constitute forward-looking statements.  

Forward-looking statements in this press release include, but are not limited to statements with respect to the proposed LDD program (including the number of holes to be drilled, the metres to be drilled, the timing of the drilling and the duration of the program) and Shore's objectives for the ensuing year including the anticipated improvement in the Mineral Resource Estimate, the re-optimization of the open pit, the re-estimation of the Mineral Resources, the optimization of the feasibility study and the anticipated positive change in the economic model for the Project; TFFE; the range of quantity, range of grade and range of carats for the TFFE; mineral resource estimate for the Star and Orion South kimberlite deposits; inferred resources for the Star and Orion South kimberlite deposits; range of tons of kimberlites not included in the TFFE; the aim of Shore to undertake additional studies and the potential upgrading of the Feasibility Study and inferred to indicated resources.

These forward-looking statements are based on Shore's current beliefs as well as assumptions made by and information currently available to it and involve inherent risks and uncertainties, both general and specific.

Risks exist that forward-looking statements will not be achieved due to a number of factors including, but not limited to, developments in world diamond markets, changes in diamond prices, risks relating to fluctuations in the Canadian dollar and other currencies relative to the US dollar, changes in exploration, development or mining plans due to exploration results and changing budget priorities of Shore or its joint venture partners, the effects of competition in the markets in which Shore operates, the impact of changes in the laws and regulations regulating mining exploration, development, closure, judicial or regulatory judgments and legal proceedings, operational and infrastructure risks and the additional risks described in Shore's most recently filed Annual Information Form, annual and interim MD&A. Shore's anticipation of and success in managing the foregoing risks could cause actual results to differ materially from what is anticipated in such forward-looking statements.

Although management considers the assumptions contained in forward-looking statements to be reasonable based on information currently available to it, those assumptions may prove to be incorrect. When making decisions with respect to Shore, investors and others should not place undue reliance on these statements and should carefully consider the foregoing factors and other uncertainties and potential events. Unless required by applicable securities law, Shore does not undertake to update any forward-looking statement that is made herein.

SOURCE Shore Gold Inc.