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, 2009 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

    -  Continued positive progress on the Star Diamond Project pre-
       feasibility study
    -  Announced diamond results from Large diameter ("LD") drilling
       previously performed on the Orion South, Orion North and Taurus
       Kimberlite clusters
    -  Announced release by the Environmental Assessment Branch of the
       Saskatchewan Ministry of Environment of draft project-specific
       guidelines for the Star-Orion South Diamond Project
    -  Working capital of $19.0 million at June 30, 2009
    -  Issued and outstanding shares of 199,904,242 at June 30, 2009
    

    Overview

    Star Diamond Project

    The Company is progressing on the Star Diamond Project pre-feasibility
study. This primarily involves desk-top engineering studies and data analysis
required to convert the Mineral Resource to a Mineral Reserve conforming to NI
43-101 and CIM standards. Shore anticipates the delivery of a final
feasibility study on the Star Diamond Project by the end of the first quarter
of 2010.
    The Environmental Assessment Branch of the Saskatchewan Ministry of
Environment, in anticipation of the environmental assessment of the Star-Orion
South Diamond Project, recently made draft project-specific guidelines
available for public review and comment (See SGF News Release July 13, 2009).
The Company must conduct an Environmental Impact Assessment and prepare an
Environmental Impact Statement, which the public and Ministry of Environment
will use to evaluate the environmental implications of the proposed
development.

    FALC-JV Programs

    During the second quarter of 2009, the Company announced diamond results
from LD drilling programs performed to date on the FALC-JV's Orion South (See
SGF News Release May 6, 2009), Orion North (See SGF News Releases May 19, 2009
and June 16, 2009) and Taurus Kimberlite clusters (See SGF News Release June
4, 2009). The Early Joli Fou ("EJF") Inner Area Kimberlite Units of these
bodies have been identified by Shore as high priority targets for exploration.
The EJF Inner Area Kimberlite Units represent coarser grained EJF kimberlite
and the EJF Outer Area Kimberlite Units include finer grained EJF kimberlite.
Underground bulk and LD drilling mini-bulk samples of the Star Kimberlite and
the FALC-JV's Orion South Kimberlite have shown that higher grades and larger
diamonds are found within the EJF Inner Area Kimberlite Units. The following
table summarizes the LD drilling results by ore body that were released during
the quarter.

    
    LD Drilling Mini-bulk Sampling Diamond Results Announced During the
    Quarter

                                                 EJF Inner Area
                                Overall          Kimberlite Unit     Largest
                             -----------------  -----------------    Diamond
                             Grade    Tonnes    Grade    Tonnes     Recovered
    FALC-JV Kimberlite       (cpht)  Processed  (cpht)  Processed    (carats)
    -------------------------------------------------------------------------
    Orion South - K140/K141    11      9,302      19      3,519       10.53
    Orion North - K120         11      2,668      15      1,730        7.53
    Orion North - K147/K148     8      2,284      12      1,088        6.89
    Taurus - K122               9      1,153      11        610        7.99
    Taurus - K118              11        889      13        464        3.42
    Taurus - K150              10        677      12        498        2.85
    

    Orion South

    The LD drilling and underground grade data both show that the EJF Inner
Area Kimberlite Unit at Orion South has a similar grade to the EJF Inner Area
Kimberlite Unit of the near-by Star Kimberlite. The Company is currently
performing the necessary desk-top engineering studies and data analysis for
the pending initial NI 43-101 compliant Mineral Resource on Orion South.
During the fourth quarter of 2008, a project proposal for a Star-Orion South
Diamond Project was submitted to the Environmental Assessment Branch of the
Saskatchewan Ministry of Environment and to various Federal agencies (See SGF
News Release November 3, 2008). The project proposal contains a detailed
project description of the Star-Orion South Diamond Project, which includes an
open pit on the Star Kimberlite, a potential second open pit at Orion South, a
common processing plant and associated infrastructure.

    Orion North

    The Orion North Kimberlite Cluster ("Orion North") is one of the largest
diamond bearing kimberlites in the world. Though a resource estimate has not
yet been determined for Orion North, kimberlite tonnage estimates of 800-870
million tonnes of kimberlite, which are conceptual in nature, were published
in the SGF News Release of November 21, 2006. No underground bulk sampling has
been undertaken to date in Orion North.
    The K120 Kimberlite within Orion North has a surface area totaling some
102 hectares situated within claims of the FALC-JV. The preliminary grade from
LD drilling performed to date in the EJF Inner Area Kimberlite Unit of the
K120 Kimberlite compares favourably with the grades of the EJF Inner areas in
the Star and Orion South kimberlites. The EJF Inner Area Kimberlite Unit of
the K120 Kimberlite is an extensive, relatively homogenous kimberlite unit
that extends from the kimberlite-till interface to depths of more than 350
metres below surface. The extent and vertical continuity of this EJF Inner
Area Kimberlite Unit are favourable factors in the event of future mining.
    The K147-148 Kimberlite Complex located within Orion North has a surface
area totaling some 394 hectares situated within claims of the FALC-JV. The
drilling results from the EJF Inner Area Kimberlite Unit of the K147-148
Kimberlite Complex shows that large volumes of diamond bearing kimberlite
exist and that these units require more detailed evaluation.

    Taurus

    Taurus lies to the west of the Orion Cluster and includes eight
coalescing kimberlites (K150, K118, K152, K218, K154, K155, K122 and K156)
that result in over six kilometres of contiguous kimberlite (See SGF News
Release February 25, 2008). While an initial geological model is currently in
preparation for Taurus, examination of the internal geology, determined from
core drilling, has confirmed extensive areas of EJF Inner Area Kimberlite
Units within the K122, K118 and K150 Kimberlites. No underground bulk sampling
has been undertaken to date in Taurus. The preliminary diamond grades and size
of the largest stones recovered from the EJF Inner Area Kimberlite Units from
the LD drilling performed to date confirm Taurus as a key target for future
detailed exploration and evaluation.

    Quarterly Results

    For the quarter ended June 30, 2009, the Company recorded a net loss of
$2.2 million or $0.01 per share compared to a net loss of $2.8 million or
$0.02 per share for the same period in 2008. Contributing to the loss during
the quarter ended June 30, 2009 was the $0.6 million write-down of mineral
property expenditures incurred during the second quarter by the Company on
certain of its mineral properties as well as the $0.1 million impairment in
fair value of long-term investments held by the Company. 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.

    Year to Date Results

    For the six-month period ended June 30, 2009, the Company recorded a net
loss of $6.1 million or $0.03 per share compared to a net loss of $5.0 million
or $0.03 per share for the same period in 2008. Contributing to the loss
during the six-month period ended June 30, 2009 was the $6.3 million
write-down of mineral property expenditures incurred by the Company on certain
of its mineral properties as well as the $0.5 million impairment in fair value
of long-term investments held by the Company. For the six-month period ended
June 30, 2009 the Company reported interest and other revenue of $0.1 million
compared to $1.0 million for the six-month period ended June 30, 2008. This
$0.9 million decrease in revenue from the six-month period ended June 30, 2008
was from a reduction in the Company's cash and cash equivalents after
incurring on-going exploration expenditures on the Fort à la Corne and Buffalo
Hills projects and from lower interest earned by the Company as a result of
falling interest rates. The net loss for the comparative period in 2008 was
primarily due to the fair value of stock-based compensation expensed ($2.5
million) as well as the $2.0 million impairment in fair value of ABCP.

    
    Selected financial highlights include:
    -------------------------------------------------------------------------
                                                         As at       As at
                                                        June 30,    Dec 31,
    Consolidated Balance Sheets                           2009        2008
    -------------------------------------------------------------------------
    Current assets                                     $  19.6  M  $  35.4  M
    -------------------------------------------------------------------------
    Capital and other assets                             227.3  M    231.6  M
    -------------------------------------------------------------------------
    Current liabilities                                    0.6  M     11.8  M
    -------------------------------------------------------------------------
    Long-term liabilities                                  1.6  M      1.6  M
    -------------------------------------------------------------------------
    Share capital                                        769.4  M    772.8  M
    -------------------------------------------------------------------------
    Contributed surplus                                   26.4  M     25.9  M
    -------------------------------------------------------------------------
    Deficit                                              551.1  M    545.1  M
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                 Three       Three
                                 months      months    Six months  Six months
                                 Ended       Ended       Ended       Ended
    Consolidated Statements     June 30,    June 30,    June 30,    June 30,
    of Income                     2009        2008        2009        2008
    -------------------------------------------------------------------------
    Interest and other income  $     -  M  $   0.3  M  $   0.1  M  $   1.0  M
    -------------------------------------------------------------------------
    Operating expenses             1.5  M      1.5  M      2.7  M      4.5  M
    -------------------------------------------------------------------------
    Loss for the period before
     other items                  (1.5) M     (1.2) M     (2.6) M     (3.5) M
    -------------------------------------------------------------------------
    Write-down of mineral
     properties                   (0.6) M        -  M     (6.3) M        -  M
    -------------------------------------------------------------------------
    Change in fair value of
     investments                  (0.1) M     (2.0) M     (0.5) M     (2.0) M
    -------------------------------------------------------------------------
    Loss from Wescan
     Goldfields Inc.              (0.1) M     (0.1) M     (0.1) M     (0.1) M
    -------------------------------------------------------------------------
    Future income taxes            0.1  M      0.5  M      3.4  M      0.6  M
    -------------------------------------------------------------------------
    Net and comprehensive loss
     for the period               (2.2) M     (2.8) M     (6.1) M     (5.0) M
    -------------------------------------------------------------------------
    Loss per share               (0.01)      (0.02)      (0.03)      (0.03)
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                 Three       Three
                                 months      months    Six months  Six months
                                 Ended       Ended       Ended       Ended
    Consolidated Statements     June 30,    June 30,    June 30,    June 30,
    of Cash Flows                 2009        2008        2009        2008
    -------------------------------------------------------------------------
    Cash flows from operating
     activities                $  (0.2) M  $  (0.7) M  $  (2.4) M  $  (2.1) M
    -------------------------------------------------------------------------
    Cash flows from investing
     activities                   (7.5) M     (1.2) M    (17.3) M     (9.9) M
    -------------------------------------------------------------------------
    Cash flows from financing
     activities                      -  M      0.5  M        -  M      0.5  M
    -------------------------------------------------------------------------
    Net decrease in cash          (7.7) M     (1.4) M    (19.7) M    (11.5) M
    -------------------------------------------------------------------------
    Cash - beginning of period    10.6  M     21.7  M     22.6  M     31.8  M
    -------------------------------------------------------------------------
    Cash - end of period           2.9  M     20.3  M      2.9  M     20.3  M
    -------------------------------------------------------------------------
    

    Outlook

    As of August 5, 2009, the Company had approximately $18.3 million in cash
and cash equivalents and short-term investments. These funds will be used to
complete the Star Diamond Project pre-feasibility study, to fund the planned
FALC-JV and the Buffalo Hills Joint Venture exploration programs and for
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 Company continues with the Star Diamond Project pre-feasibility
study. This primarily entails desk-top engineering studies and data analysis
to convert the Mineral Resource to a Mineral Reserve conforming to NI 43-101
and CIM standards. The Company's intent is to have a NI 43-101 compliant
Reserve estimate for the Star Diamond Project completed during the third
quarter of 2009. Shore anticipates the delivery of a final feasibility study
for the Star Diamond Project by the end of the first quarter of 2010. In
addition, the Company anticipates an initial Mineral Resource estimate for
Orion South to be available in the near term. It is the present focus to
continue to evaluate the Star and Orion South Kimberlites to the point where a
production decision can be made.

    Technical Information

    All technical information in this press 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 Shawn Harvey, Geology Manager, Professional Geoscientist
in the Province of Saskatchewan, who are the Company's "Qualified Persons"
under the definition of NI 43-101.

    Caution Regarding Forward-looking Statements

    This news release may contain forward-looking statements as defined by
certain securities laws, including the "safe harbour" provisions of the
Ontario Securities Act and the United States Private Securities Litigation
Reform Act of 1995. 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, and, in particular, statements regarding Shore's
future operations, future exploration and development activities or other
development plans contain forward-looking statements.
    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 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. 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 may be made.





For further information:

For further information: Mr. Kenneth E. MacNeill, Chief Executive
Officer and President Or Mr. Harvey J. 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, Website: www.shoregold.com


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