Shore Gold Inc. announces third quarter results



    Stock Symbol: SGF: TSX

    SASKATOON, Nov. 14 /CNW/ - Shore Gold Inc. ("Shore" or the "Company")
reports that the unaudited results of Shore's operations for the quarter ended
September 30, 2007 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
    -  Modeled price estimate of US$170 per carat for the Star Kimberlite
       underground bulk sampling program
    -  Final two sets of diamond results from the underground bulk sampling
       of the Star Kimberlite, totalling 1,074.49 carats from 8,442.53 dry
       tonnes processed
    -  Commencement of the shaft sinking on Orion South
    -  Announcement of a geological estimate of between 150 to 167 million
       tonnes of diamondiferous kimberlite within Orion Centre, which is
       located within the FALC-JV
    -  Acquisition of a 22.5% interest in the Buffalo Hills Joint Venture for
       $8.75 million
    -  Working capital of $50.8 million at September 30, 2007
    -  Issued and outstanding shares of 177,509,460 at September 30, 2007
    

    Overview of Third Quarter

    Star Diamond Property Advanced Exploration Program

    During the third quarter, the Company released the final two sets of
diamond results from Phase 3 of the underground bulk sampling of the Star
Kimberlite. Diamonds recovered from the two sets of results totaled 1,074.49
carats from 8,442.53 dry tonnes processed, for an average of 12.73 carats per
hundred tonnes ("cpht"). In total, three phases of underground bulk sampling
were performed on the Star Kimberlite, resulting in 68,810 tonnes of
kimberlite being processed. This processed kimberlite produced 80,639 diamonds
(+0.85 millimetre) weighing a total of 10,586 carats.
    On November 5, 2007, the Company announced diamond valuation results for
the Star Kimberlite underground bulk sampling program. An overall modeled
price estimate of US$170 per carat was determined by WWW International Diamond
Consultants Limited, who together with their aboriginal partners ADG through
Diamonds International Canada (DICAN), are the valuators to the Federal
Government of Canada for the Canadian diamond mines in the NWT and Nunavut.
The modeled price of US$170 per carat is a 26% increase over the previously
announced valuation exercise that was performed at the end of Phase 2. The
valuation exercise incorporated the five principal kimberlite lithologies
within the Star Kimberlite: Cantuar, Pense, EJF, Mid Joli Fou ("MJF") and Late
Joli Fou ("LJF"). Diamond parcels recovered from these individual lithologies
have been valued to determine modeled diamond prices that will be used in the
Mineral Reserve calculation for the Star Kimberlite.

    FALC-JV Exploration Programs

    During the third quarter of 2007, the major activities on the FALC-JV
property were the commencement of the shaft sinking on Orion South, including
the drilling of twenty holes required for a freeze wall. The other major
activity was the LD drilling on Star West.
    On October 17, 2007, the Company announced that the FALC-JV participants
approved the sinking of a shaft for underground bulk sampling of the Orion
South Kimberlite. Through the use of a closed circuit cooling system, the
twenty freeze wall holes on Orion South will help keep the overburden frozen
down to 125 metres below surface. This will help permit safe shaft sinking
through the upper region of the shaft. The twenty freeze wall holes were
preceded by a pilot core hole, drilled to a depth of 241 metres, which is used
to accurately log the subsurface geology of the overburden and the internal
geology of the kimberlite at the proposed shaft site. The shaft will reach a
depth of 210 metres below surface. Current scheduling suggests this depth will
be attained in the second quarter of 2008. The shaft will enable the
collection of bulk samples from the three dominant kimberlite phases within
Orion South (EJF-1, EJF-2 and Pense).
    In addition, the Company announced a geological estimate of between 150
to 167 million tonnes of diamondiferous kimberlite within Orion Centre, which
is located within the FALC-JV. This estimate completes the geological modeling
of the FALC-JV's Orion Kimberlite Cluster, which is now estimated to contain
between 1.3 and 1.5 billion tonnes of kimberlite and is the world's largest
known accumulation of contiguous diamondiferous kimberlite in the world.

    Buffalo Hills

    On July 24, 2007, Shore and Diamondex Resources Ltd. ("Diamondex")
completed a transaction with Ashton Diamonds (Canada) Inc. and Ashton Mining
of Canada Inc. (collectively, "Ashton") (wholly owned subsidiaries of
Stornoway Diamond Corporation) to acquire Ashton's 45% interest in the Buffalo
Hills Property in northern Alberta for a total consideration of $17.5 million.
Under the agreement Shore paid $8.75 million in cash and Diamondex paid
$6.25 million in cash and issued Ashton 6,031,363 of its common shares with a
value of $2.5 million. Pursuant to the acquisition, Shore and Diamondex each
acquired a 22.5% interest in the Buffalo Hills Joint Venture, in which Encana
Corporation holds a 43% interest and Pure Diamonds Exploration Inc. holds the
remaining 12% interest. Diamondex has been appointed Operator of the Buffalo
Hills Joint Venture.

    Quarterly Results

    For the quarter ended September 30, 2007, the Company recorded a net loss
of $2.4 million or $0.01 per share compared to a net loss of $122.7 million or
$0.70 per share for the same period in 2006. The net loss is primarily due to
the $2.0 million change in fair value of Canadian third party asset-backed
commercial paper ("ABCP") held by the Company. This loss does not compare to
the corresponding period in 2006 as a result of the $124.1 million loss (net
of a $55.8 million future income tax recovery) on the sale of a 40% interest
of the FALC-JV to Newmont. The Company generated lower interest income for the
third quarter of 2007 compared to the same period in 2006, which was the
result of having less cash on hand after the 17.755% acquisition of FALC-JV
for $77.1 million in the fall of 2006 and significant expenditures on the
exploration projects in the Fort à la Corne region since the period ended
September 30, 2006.

    Year to Date Results

    For the nine-month period ended September 30, 2007, the Company recorded
a net loss of $4.8 million or $0.03 per share compared to a net loss of
$76.7 million or $0.44 per share for the same period in 2006. The net loss is
due to the fair value of stock-based compensation expensed during the
nine-month period ended September 30, 2007 ($4.8 million) and the $2.0 million
change in fair value of ABCP held by the Company. The $2.0 million change in
fair value of ABCP was offset by an income tax recovery of $1.9 million
recognized during the second quarter after the federal government enacted a
reduction to income tax rates. The loss for the nine-month period ended
September 30, 2006 related to the loss on the sale of a 40% interest of the
FALC-JV to Newmont of $124.1 million (net of a $55.8 million future income tax
recovery), offset by an additional future income tax recovery of $44.9 million
resulting from decreases to the federal and provincial income tax rates. The
Company generated lower interest income for the nine-month period of 2007
compared to the same period in 2006 which was the result of having less cash
on hand after incurring on-going exploration expenditures on the Fort à la
Corne projects as well as the 17.755% acquisition of the FALC-JV.

    
    Selected financial highlights include:
    -------------------------------------------------------------------------
                                                           As at      As at
                                                         September   December
    Consolidated Balance Sheets                           30, 2007   31, 2006
    -------------------------------------------------------------------------
    Current assets                                        $ 59.2 M  $ 130.0 M
    -------------------------------------------------------------------------
    Capital and other assets                               725.9 M    657.5 M
    -------------------------------------------------------------------------
    Current liabilities                                      8.4 M     11.9 M
    -------------------------------------------------------------------------
    Future income tax and other long-term liabilities      115.8 M    117.5 M
    -------------------------------------------------------------------------
    Share capital                                          737.3 M    733.5 M
    -------------------------------------------------------------------------
    Contributed surplus                                     23.1 M     19.2 M
    -------------------------------------------------------------------------
    Deficit                                                 99.5 M     94.6 M
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                     Three      Three      Nine       Nine
                                    months     months     months     months
                                     Ended      Ended      Ended      Ended
    Consolidated Statements of     September  September  September  September
     Income                         30, 2007   30, 2006   30, 2007   30, 2006
    -------------------------------------------------------------------------
    Interest and other income      $   0.9 M  $   3.1 M  $   3.4 M  $   7.8 M
    -------------------------------------------------------------------------
    Operating expenses                 1.4 M      1.0 M      8.1 M      3.9 M
    -------------------------------------------------------------------------
    Income (loss) for the period
     before other items               (0.5)M      2.1 M     (4.7)M      3.9 M
    -------------------------------------------------------------------------
    Change in fair value of third
     party asset-backed commercial
     paper                            (2.0)M        -       (2.0)M        -
    -------------------------------------------------------------------------
    Loss from Wescan Goldfields Inc.   0.0 M      0.0 M     (0.1)M      0.0 M
    -------------------------------------------------------------------------
    Loss on sale of property interests   -      179.9 M        -      179.9 M
    -------------------------------------------------------------------------
    Income tax recovery                0.1 M     55.3 M      2.0 M     99.3 M
    -------------------------------------------------------------------------
    Net and comprehensive loss
     for the period                   (2.4)M   (122.7)M     (4.8)M    (76.7)M
    -------------------------------------------------------------------------
    Loss per share                   (0.01)     (0.70)     (0.03)     (0.44)
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                     Three      Three      Nine       Nine
                                    months     months     months     months
                                     Ended      Ended      Ended      Ended
    Consolidated Statements of     September  September  September  September
     Cash Flows                     30, 2007   30, 2006   30, 2007   30, 2006
    -------------------------------------------------------------------------
    Cash flows from operating
     activities                    $   0.2 M  $   2.3 M  $   0.3 M  $   4.5 M
    -------------------------------------------------------------------------
    Cash flows from investing
     activities                       (0.8)M    (93.7)M    (38.6)M   (135.0)M
    -------------------------------------------------------------------------
    Cash flows from financing
     activities                        0.2 M      0.5 M      1.4 M     18.2 M
    -------------------------------------------------------------------------
    Net decrease in cash              (0.4)M    (90.9)M    (36.9)M   (112.3)M
    -------------------------------------------------------------------------
    Cash - beginning of period        28.2 M    240.3 M     64.7 M    261.7 M
    -------------------------------------------------------------------------
    Cash - end of period              27.8 M    149.4 M     27.8 M    149.4 M
    -------------------------------------------------------------------------
    

    Outlook

    As at November 9, 2007, the Company had approximately $51 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 Property, to
fund the Company's portion of the FALC-JV exploration programs and to finance
the proposed Buffalo Hills exploration programs. In addition to these funds,
the Company has entered into an agreement for the private placement of 4.76
million Flow-Through Common Shares for gross proceeds of $30 million which
will be used by Shore to incur Canadian exploration expenses prior to December
31, 2008.
    The advanced exploration program of the Star Kimberlite Property will be
conducted in order to determine the project's viability under current economic
conditions. This will entail the collection of additional exploration
information, such as geological, geotechnical, geometallurgical, geochemical,
assaying and other relevant information to delineate and define the Star
Kimberlite, with a sufficient level of confidence, to estimate a Mineral
Resource conforming to National Instrument 43-101 and Canadian Institute of
Mining, Metallurgy and Petroleum ("CIM") standards. Based on current timelines
the Company anticipates a Mineral Resource estimate to be defined by early to
mid 2008, followed by a Mineral Reserve and a bankable feasibility study. The
FALC-JV has similar objectives; however, based on the stage of current
exploration programs a Mineral Resource estimate would not likely be available
until approximately 2010 or later.

    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 Securities legislation in Canada and the United States Private
Securities Litigation Reform Act of 1995. Shore may make such statements in
this press release, 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 nature 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 partner;
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.
Shore does not undertake to update any forward-looking statement, whether
written or oral, 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


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