Shore Gold Inc. announces second quarter results



    Stock Symbol: SGF: TSX

    SASKATOON, Aug. 13 /CNW/ - Shore Gold Inc. ("Shore" or the "Company")
reports that the unaudited results of Shore's operations for the quarter ended
June 30, 2008 will be filed today on SEDAR and may be viewed at www.sedar.com 
once posted. A summary of key financial and operating results for the quarter
is as follows:

    
    Highlights

    -   Completion of the NI 43-101, risk adjusted, Mineral Resource estimate
        for the explored portion of the Star Kimberlite
    -   Commencement of drifting on the FALC-JV's Orion South underground
        bulk sampling program
    -   Third set of diamond results from samples collected from the
        Orion South shaft released
    -   Expenditures of $9.6 million on the Company's share of the Fort à la
        Corne Joint Venture ("FALC-JV") exploration program and $1.4 million
        on the Star Diamond Project advanced exploration program
    -   Working capital of $40.8 million at June 30, 2008
    -   Issued and outstanding shares of 183,234,242 at June 30, 2008
    

    Overview

    Star Diamond Project Advanced Exploration Program

    In early June, the Company announced the completion of the NI 43-101,
risk adjusted, Mineral Resource estimate for the explored portion of the Star
Kimberlite (See SGF News Release June 9, 2008). The Mineral Resource estimate,
as prepared by independent Qualified Persons from AMEC Americas Limited
("AMEC"), includes Indicated Resources of 122.7 million tonnes at a grade of
13.6 carats per hundred tonnes ("cpht") for a total of approximately
17 million carats and Inferred Resources of 30.3 million tonnes at a grade of
13.1 cpht.
    Shore commissioned the NI 43-101 Mineral Resource estimate for the Star
and Star West properties pursuant to its obligation under NI 43-101 to prepare
and file a Technical Report and as such, the Technical Report is the sole
responsibility of Shore. The Technical Report can be viewed on the Company's
website (www.shoregold.com) or on SEDAR (www.sedar.com).
    In addition to the Mineral Resource estimate determined by AMEC, a
further 100 to 120 million tonnes of the Star Kimberlite is designated a
'potential mineral deposit', as detailed core logging, whole rock
geochemistry, geophysical and density measurements confirm the geological
continuity from the Inferred Resource into this part of the kimberlite, which
is contained within the 276 million tonnes originally defined in the
geological model for the Star Kimberlite (See SGF News Release Oct 17, 2006).
In order to bring certain of these tonnages into a resource category, the
Company will need to perform additional LD drilling. The 100 to 120 million
tonne potential mineral deposit is currently considered conceptual in nature
and is not a resource estimate.

    FALC-JV Exploration Programs

    During the second quarter of 2008, the major activities on the FALC-JV
Project were the completion of the shaft and commencement of lateral
underground drifting on Orion South, LD drilling and sample processing.
    The Orion South shaft was completed during the second quarter, to a depth
of 211 metres below surface with a station established at the 186 metre level.
The equipment required for lateral drift development has also been lowered
down the shaft and assembled in the station. Lateral drift development is
presently underway on headings to the south. Progress, however, has been
slower than anticipated due to the ground conditions experienced. The intent
of this shaft sinking and bulk sampling exercise is to recover substantial,
representative diamond parcels from each of the predominant Orion South
kimberlite lithologies (Early Joli Fou and Pense) for diamond grade and price
determinations.
    The third set of diamond results from the underground bulk sampling of
Orion South was announced during the second quarter (See SGF News Release
May 27, 2008). Total diamond recoveries were 136.68 carats from 3,466.73 dry
tonnes processed. Ten diamonds greater than one carat were recovered and the
four largest stones were: 2.59, 2.22, 1.63 and 1.19 carats, respectively.
These underground bulk sampling diamond results were from samples collected
from the Pense Kimberlite during the shaft sinking exercise (at depths from
148.6 metres to 185 metres) and the grades recovered are consistent with
Shore's interpretation of the internal geology of Orion South. Existing LD
drilling results suggest that the Pense Kimberlite will have a lower grade
than the EJF but the EJF is the dominant lithology in Orion South, accounting
for more than 60 percent of the total rock volume. The Company continues its
underground program on Orion South. The Phase 1 LD drilling program on Orion
South has been completed and the results are awaited.

    Buffalo Hills

    The Buffalo Hills Joint Venture participants are Shore (22.5 percent),
Diamondex Resources Ltd. ("Diamondex") (22.5 percent), EnCana Corporation
(43 percent) and Pure Diamonds Exploration Inc. (12 percent). Diamondex has
been appointed operator of the Buffalo Hills Joint Venture. Shore and
Diamondex have the option to increase their combined interest in the joint
venture to 72.5 percent by funding the next $15 million of exploration
expenditures before April 30, 2010.
    Following the review of historical geological data by a technical team
from Shore and Diamondex, a 2008 exploration program and budget of $7 million
was determined of which Shore will fund $3.5 million (See SGF News Release
January 17, 2008).
    A winter drill program was performed during the first quarter of 2008 on
two (K14 and K252) of the six kimberlite bodies (K91, K225, K14, K252, K6 and
K5) of the central corridor of the Buffalo Hills property slated for drilling
during the year as part of the approved 2008 exploration program. Drilling on
the K6 body resumed in the second quarter following the spring thaw. Also
during the second quarter Shore, on behalf of the joint venture, completed
logging more than 2,000 metres of drill-core from the 2008 Buffalo Hills
winter drilling program.

    Quarterly Results

    For the quarter ended June 30, 2008, the Company recorded a net loss of
$2.8 million or $0.02 per share compared to net income of $1.7 million or
$0.01 per share for the same period in 2007. The loss for the quarter ended
June 30, 2008 was primarily due to the $2.0 million impairment in fair value
of third-party asset-backed commercial paper ("ABCP") held by the Company that
was recorded during the quarter. The Company also generated lower interest
income for the second quarter of 2008 compared to the same period in 2007 as a
result of having less cash on hand due to exploration expenditures incurred,
the acquisition of a 22.5 percent interest in the Buffalo Hills Joint Venture,
as well as the Company's investment in ABCP being frozen since August of 2007.
The net income for the second quarter of 2007 was primarily due to an income
tax recovery as a result of the federal government enacting a reduction in
corporate income tax rates during that period.

    Year to Date Results

    For the six-month period ended June 30, 2008, the Company recorded a net
loss of $5.0 million or $0.03 per share compared to a net loss of $2.5 million
or $0.01 per share for the same period in 2007. The loss during the first six
months of 2008 was primarily due to the fair value of stock-based compensation
that was expensed during the six-month period ended June 30, 2008 as well as
the $2.0 million impairment in fair value of ABCP held by the Company that was
recorded during the second quarter of 2008. The Company also generated lower
interest income for the six-month period of 2008 compared to the same period
in 2007 which also contributed to the six month loss. The net loss for the
six-month period ended June 30, 2007 would have been similar to the six-month
period ended June 30, 2008 if it had not been for the income tax recovery of
$2.0 million in the second quarter of 2007 as a result of the federal
government enacting a reduction in corporate income tax rates during that
period.

    
    Selected financial highlights include:
    -------------------------------------------------------------------------
                                                         As at       As at
                                                        June 30,     Dec 31,
    Consolidated Balance Sheets                           2008        2007
    -------------------------------------------------------------------------
    Current assets                                     $  47.2 M   $ 130.0 M
    -------------------------------------------------------------------------
    Capital and other assets                             766.6 M     657.5 M
    -------------------------------------------------------------------------
    Current liabilities                                    6.4 M      11.9 M
    -------------------------------------------------------------------------
    Future income tax and other long-term liabilities    113.1 M     117.5 M
    -------------------------------------------------------------------------
    Share capital                                        760.9 M     733.5 M
    -------------------------------------------------------------------------
    Contributed surplus                                   25.5 M      19.2 M
    -------------------------------------------------------------------------
    Deficit                                               92.1 M      94.6 M
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
                                 Three       Three        Six         Six
                                 months      months      months      months
                                 Ended       Ended       Ended       Ended
    Consolidated Statements     June 30,    June 30,    June 30,    June 30,
    of Income                     2008        2007        2008        2007
    -------------------------------------------------------------------------
    Interest and other income  $   0.3 M   $   1.2 M   $   1.0 M   $   2.5 M
    -------------------------------------------------------------------------
    Operating expenses             1.5 M       1.4 M       4.5 M       6.7 M
    -------------------------------------------------------------------------
    Loss for the period
     before other items           (1.2)M      (0.2)M      (3.5)M      (4.2)M
    -------------------------------------------------------------------------
    Loss from Wescan
     Goldfields Inc.              (0.1)M      (0.1)M      (0.1)M      (0.2)M
    -------------------------------------------------------------------------
    Impairment in fair value
     of ABCP                      (2.0)M         - M      (2.0)M         - M
    -------------------------------------------------------------------------
    Income tax recovery            0.5 M       2.0 M       0.6 M       1.9 M
    -------------------------------------------------------------------------
    Net and comprehensive
     income (loss) for
     the period                   (2.8)M       1.7 M      (5.0)M      (2.5)M
    -------------------------------------------------------------------------
    Income (loss) per share      (0.02)       0.01       (0.03)      (0.01)
    -------------------------------------------------------------------------



    -------------------------------------------------------------------------
                                 Three       Three        Six         Six
                                 months      months      months      months
                                 Ended       Ended       Ended       Ended
    Consolidated Statements     June 30,    June 30,    June 30,    June 30,
     of Cash Flows                2008        2007        2008        2007
    -------------------------------------------------------------------------
    Cash flows from
     operating activities      $  (0.7)M   $   0.2 M   $  (2.1)M   $   0.0 M
    -------------------------------------------------------------------------
    Cash flows from
     investing activities         (1.2)M     (45.1)M      (9.9)M     (37.7)M
    -------------------------------------------------------------------------
    Cash flows from
     financing activities          0.5 M       0.2 M       0.5 M       1.2 M
    -------------------------------------------------------------------------
    Net decrease in cash          (1.4)M     (44.7)M     (11.6)M     (36.5)M
    -------------------------------------------------------------------------
    Cash - beginning of period    21.7 M      72.9 M      31.8 M      64.7 M
    -------------------------------------------------------------------------
    Cash - end of period          20.3 M      28.2 M      20.3 M      28.2 M
    -------------------------------------------------------------------------
    

    Outlook

    As of August 6, 2008, the Company had approximately $36.2 million in cash
and cash equivalents and short-term investments. These funds will be used to
complete the advanced exploration program on the Star Kimberlite, to fund the
Company's portion of the FALC-JV and the Buffalo Hills Joint Venture
exploration programs and general corporate matters. Cash and cash equivalents
and short-term investments may also be used to fund various other exploration
activities as well as acquisition and exploration of additional properties (as
opportunities warrant). The next phase of work on the Star Kimberlite
currently under way is the determination of the project's viability under
current economic conditions. This will primarily entail desk-top engineering
studies and data analysis to convert the Mineral Resource to a Mineral Reserve
and a feasibility study conforming to NI 43-101 and Canadian Institute of
Mining, Metallurgy and Petroleum ("CIM") standards. The FALC-JV has similar
objectives; however, based on the stage of current exploration programs on the
Orion Cluster, a Mineral Resource estimate is not anticipated for any of the
FALC-JV's diamondiferous kimberlites until 2009.

    Technical Information

    All technical information in this press release has been prepared under
the supervision of George Read, Senior Vice-President Exploration and
Development, Professional Geoscientist in the Provinces of Saskatchewan and
British Columbia, who is the Company's "Qualified Person" under the definition
of NI 43-101.

    Caution Regarding Forward-looking Information

    From time to time, Shore makes written or oral forward-looking statements
within the meaning of certain securities laws, including the "safe harbour"
provisions of the Ontario Securities Act and the United States Private
Securities Litigation Reform Act of 1995. Shore may make such statements in
press releases, in other filings with Canadian regulators or the United States
Securities and Exchange Commission, in reports to shareholders or in other
communications. These forward-looking statements include, among others,
statements with respect to Shore's objectives for the ensuing year, our medium
and long-term goals, and strategies to achieve those objectives and goals, as
well as statements with respect to our beliefs, plans, objectives,
expectations, anticipations, estimates and intentions. The words "may,"
"could," "should," "would," "suspect," "outlook," "believe," "plan,"
"anticipate," "estimate," "expect," "intend," and words and expressions of
similar import are intended to identify forward-looking statements. In
particular, statements regarding Shore's future operations, future exploration
and development activities or the anticipated results of Shore's advanced
exploration study or other development plans contain forward-looking
statements.
    All forward-looking statements and information are based on Shore's
current beliefs as well as assumptions made by and information currently
available to Shore concerning anticipated financial performance, business
prospects, strategies, regulatory developments, development plans,
exploration, development and mining activities and commitments. Although
management considers these assumptions to be reasonable based on information
currently available to it, they may prove to be incorrect.
    By their very nature, forward-looking statements involve inherent risks
and uncertainties, both general and specific, and risks exist that
predictions, forecasts, projections and other forward-looking statements will
not be achieved. We caution readers not to place undue reliance on these
statements as a number of important factors could cause the actual results to
differ materially from the beliefs, plans, objectives, expectations,
anticipations, estimates and intentions expressed in such forward-looking
statements. These factors include, but are not limited to, developments in
world diamond markets, changes in diamond valuations, 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 and
development; 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
and short form prospectus, and Shore's anticipation of and success in managing
the foregoing risks.
    Shore cautions that the foregoing list of factors that may affect future
results is not exhaustive. When relying on our forward-looking statements to
make decisions with respect to Shore, investors and others should carefully
consider the foregoing factors and other uncertainties and potential events.
Unless otherwise required by applicable securities laws, Shore does not
undertake to update any written forward-looking statements that may be made
from time to time by Shore or on our behalf.





For further information:

For further information: Mr. Kenneth MacNeill, Chief Executive Officer
and President, 300 - 224 4th Avenue South, Saskatoon, SK S7K 5M5, PH: (306)
664-2202, FAX: (306) 664-7181; OR Mr. Harvey Bay, Chief Financial Officer and
Chief Operating Officer, 300 - 224 4th Avenue South, Saskatoon, SK S7K 5M5,
PH: (306) 664-2202, FAX: (306) 664-7181


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890