Star Diamond Project NI 43-101 indicated mineral resource: 123 million tonnes, 13.6 cpht, 17 million carats



    Stock Symbol: SGF: TSX

    SASKATOON, SK, June 9 /CNW/ - George H. Read, P. Geo., Senior Vice
President Exploration and Development, is pleased to announce the NI 43-101
compliant, risk adjusted, Mineral Resource estimate for the explored portion
of the Star Kimberlite as prepared by an independent Qualified Person ("QP")
from AMEC Americas Limited ("AMEC"). The Mineral Resource estimate, received
from AMEC on June 2, 2008, includes Indicated Resources of 122.7 million
tonnes at a grade of 13.6 carats per hundred tonnes ("cpht") and Inferred
Resources of 30.3 million tonnes at a grade of 13.1 cpht. The following table
summarizes the details of the NI 43-101 Mineral Resource as prepared by AMEC.

    
    Table 1. Mineral Resource Statement for the Star Kimberlite including the
    Star Diamond Project (100% Shore) and Star West (60% Shore, 40% Newmont).
    Reported Lithologies: Cantuar, Pense, Early Joli Fou (EJF), Mid Joli Fou
    (MJF) and Late Joli Fou (LJF).

    -------------------------------------------------------------------------
                                                                   Percentage
                                                                     Carats
    Resource  Kimberlite  Dry Tonnes   Grade   Carats     Price       Star/
    Category  Lithology   (x1,000)    (cpht)  (x1,000) (US$/carat)  Star West
    -------------------------------------------------------------------------
    Indicated   Cantuar     10,521      13.4     1,410       420       42/58
    -------------------------------------------------------------------------
    Indicated   Pense        6,273      13.6       853       126       100/0
    -------------------------------------------------------------------------
    Indicated   EJF         90,240      14.9    13,446       216       69/31
    -------------------------------------------------------------------------
    Indicated   MJF         15,653       6.0       939       152        1/99
    -------------------------------------------------------------------------
    Indicated   LJF              0       3.5         0       152           0
    -------------------------------------------------------------------------
    Indicated   Total      122,687      13.6    16,648       225       63/37
    -------------------------------------------------------------------------
    Inferred    Cantuar      2,777      13.3       369       420       35/65
    -------------------------------------------------------------------------
    Inferred    Pense        2,769      14.6       404       126       100/0
    -------------------------------------------------------------------------
    Inferred    EJF         24,640      12.9     3,179       216       65/35
    -------------------------------------------------------------------------
    Inferred    MJF             88       4.9         4       152       0/100
    -------------------------------------------------------------------------
    Inferred    LJF              0       2.8         0       152           0
    -------------------------------------------------------------------------
    Inferred    Total       30,274      13.1     3,956       226       61/39
    -------------------------------------------------------------------------
    

    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 (Shore News Release Oct 17, 2006).
The 100 to 120 million tonne potential mineral deposit, at a present estimated
grade of 10 to 13 cpht, is conceptual in nature and is not a resource
estimate. Further exploration work is under consideration for the Star
Kimberlite, but it is uncertain if additional exploration work will lead to
the kimberlite presently included in the potential mineral deposit being
upgraded to a resource category.
    The Star Kimberlite is one of the largest diamond bearing kimberlites in
the world, with a surface area totaling some 352 hectares situated within
claims of both the Star Diamond Project (100 percent Shore) and the adjacent
Fort a la Corne Joint Venture (FALC-JV: 60 percent Shore and 40 percent
Newmont Mining Corporation of Canada Limited ("Newmont"), referenced in this
news release as "Star West"). The Mineral Resource estimate prepared by AMEC
includes kimberlite volume, density and tonnage data collected during the
surface and underground core drilling program comprising 270 surface core
holes (18,020 metres of kimberlite) and 211 underground core holes (15,933
metres of kimberlite), diamond and tonnage data from underground bulk sampling
(69,056 dry tonnes, 10,582 carats and 80,669 stones) and diamond and tonnage
data from the mini-bulk samples recovered from the extensive large diameter
drilling ("LDD") program on Star (88 holes, 8,447 metres of kimberlite, 18,956
dry tonnes, 1,337 carats and 14,433 stones). This Mineral Resource estimate
uses a 1.0 millimetre bottom diamond size cut-off and considers all kimberlite
above 71 metres above sea level or to a depth of 350 metres below surface.
Diamond values are based on the March 2008 high modeled price by WWW
International Diamond Consultants Ltd ("WWW").
    CIM standards and securities commission disclosure regulations require
that a resource can only be declared on a mineral deposit which has
"reasonable prospects of economic extraction". The reported mineral resources
for the Star deposit are constrained using a Lerchs-Grossmann ("LG") economic
pit shell, generated using the Whittle software package. The economic
assumptions used are as follows:

    
    1.  Diamond Prices: Due to the positive performance of rough diamond
        prices in early 2008, the Star diamond parcel was revalued by WWW in
        March 2008 and the revised modeled diamond prices have been used in
        this resource estimate - see Table 2. Further price increases have
        been reported in the rough diamond market since this valuation in
        March 2008. The 'High' price valuations were used for pit shell
        generation.

        Table 2. March 2008 Re-price of Star Diamond Parcel

        ---------------------------------------------------------------------
                                  Parcel       Model     Minimum
        Kimberlite                Price        Price      Price    High Price
        Lithology      Carats   ($/carat)    ($/carat)  ($/carat)   ($/carat)
        ---------------------------------------------------------------------
        Cantuar      1,126.32        $193        $309        $247        $420
        ---------------------------------------------------------------------
        Pense        1,410.73         $79        $103         $88        $126
        ---------------------------------------------------------------------
        EJF          7,123.10        $115        $167        $138        $216
        ---------------------------------------------------------------------
        MJF-LJF         80.09         $84        $105         $75        $152
        ---------------------------------------------------------------------
        Total        9,740.24        $120        $172        $141        $225
        ---------------------------------------------------------------------

    2.  Grade: An essential component of the Mineral Resource estimate relies
        on the reconciliation of the diamond grades from the underground
        samples with those calculated for the LDD samples. The LDD sampling
        method underestimates the true diamond grade and price due to limited
        sample size, diamond breakage and diamond loss. Factors were
        calculated for the LDD results to reconcile them with the higher
        diamond grades reported from the underground bulk sampling. However,
        in their resource estimate, AMEC have applied two levels of risk
        adjustment to lower the factors with increasing distance from the
        central part of the Star Kimberlite.

    3.  Metallurgical Recovery: 100 percent.

    4.  Process and Overhead Costs: $5.08 per tonne processed.

    5.  Mining Cost: $0.99 per tonne mined for overburden and $1.34 per tonne
        mined for kimberlite and country rock. These costs include a
        sustaining capital allowance of $0.11 per tonne mined and a
        dewatering cost of $0.03 per tonne mined. Waste rock received an
        additional waste rehabilitation cost of $0.02 per tonne.

    6.  Pit slopes: Pit slopes used were 18 degrees in the overburden and
        30 degrees in the kimberlite and country rock. The waste to ore strip
        ratio is 5.87 on a partial block (undiluted) mineralization basis.

    7.  Marginal Break-even Cut-off: The marginal break-even cut-off for each
        kimberlite lithology was calculated as the sum of the mining, process
        and overhead costs divided by the diamond price, such that all
        material above cut-off is capable of covering the operational costs.
        The marginal cut-off grades applied in the resource estimate are
        Cantuar 1.21 cpht, Pense 4.03 cpht, EJF 2.35 cpht and MJF and LJF
        3.34 cpht.
    

    As part of the assessment of 'reasonable prospects for economic
extraction', AMEC investigated whether the identified resource had the
potential to pay back the capital on an undiscounted cash flow basis. A
preliminary financial analysis was performed which achieved this objective,
supporting the resource declaration. The Mineral Resource reported in Table 1
therefore comprises the kimberlite that is constrained within the Whittle pit
and exceeds the economic cut off as determined by the parameters above.
    Senior Vice President Exploration and Development, George Read, states:
"The publication of this NI 43-101 resource estimate for the Star Kimberlite
is a significant milestone in the evolution of the Star Diamond Project. This
resource estimate relies significantly on LDD diamond results due to the
distribution of LDD results across Star, in contrast to the more limited
extent of the underground bulk samples. However, the Shore geological team is
confident that the underground bulk sample results are a representative
estimate of the diamond grades of a significant portion of the kimberlite
lithologies contained in Star - in particular the EJF, Cantuar and Pense
Kimberlites. In addition, considerable upside exists in the 100 to 120 million
tonnes of potential mineral deposit for which grades have not accurately been
defined. The in situ revenue (Carats multiplied by Price), estimated for
carats contained in the Indicated Resource, valued at current market prices,
exceeds the revenue of many former and present diamond producers. An NI 43-101
compliant Technical Report on the Star Diamond Project that contains details
of the resource estimate will be posted on SEDAR within 45 days of the
publication of this news release."
    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 Technical Reports and as such, the Technical Report is the sole
responsibility of Shore. Newmont did not participate in the preparation,
supervision or review of the work associated with this exercise and takes no
responsibility for the content or information included in the Technical Report
or this press release. Shore is the exclusive owner of the Star Diamond
Project. The Star West property is held by the Fort a La Corne Joint Venture
between Shore as the operator and 60 percent owner and Newmont as the owner of
a 40 percent interest.
    Mr. Ken Brisebois (B.A.Sc., Geological Engineering, University of
Waterloo, Canada) (P.Eng.) of AMEC is the independent Qualified Person who
supervised the preparation of the Mineral Resource estimate for the Star
Kimberlite. Mr. Brisebois has 22 years of worldwide experience in mining
resource and reserve assessments and related work and has worked on several
diamond resource estimates in North America. His specialties include technical
resource and reserve risk assessment, resource and reserve audits,
geostatistical and geological modeling, ore and grade control, resource
classification, groundwater and contaminant modeling, scientific data 3D
visualization and geoscience computer software design. Dr. Harry Parker of
AMEC and Mr. M.M. (Tinus) Oosterveld, with a combined resource estimation
experience of over 80 years, were closely involved in the Mineral Resource
estimation process for the Star Kimberlite. Dr. Parker (B.Sc. and PhD.
Geology, Stanford University (1967, 1975), A.M. Geology, Harvard University
(1969), M.Sc. Statistics, Stanford University (1974)) has more than 40 years
of experience in geological studies, and specializes in geostatistics and in
resource/reserve evaluation to support project financing, acquisitions and
privatization. He is an internationally recognized expert in geology/mining
ore reserve studies, geostatistical analyses, audits and feasibility studies.
Dr. Parker pioneered the use of conditional simulation to predict recoverable
reserves, and to develop new grade control techniques. He has worked on
projects in dozens of countries and 15 US states. Mr. Oosterveld (M.Sc.,
Mining Engineering, Delft Technical University, Netherlands) was employed by
Anglo American Corporation and De Beers Consolidated Mines Ltd. for more than
30 years, during which time he was in charge of De Beers' Mineral Resource
Department and responsible for the assessment of kimberlite deposits
throughout the world. Mr. Oosterveld also has more than a decade of experience
as an independent diamond resource consultant. He is regarded as one of the
leading authorities in diamond resource evaluation and diamond geostatistics.
AMEC consents to the statement of Indicated and Inferred mineral resources
contained herein.
    Senior Vice President Exploration and Development, George Read,
Professional Geoscientist in the Provinces of Saskatchewan and British
Columbia, is Shore's Qualified Person responsible for the verification and
quality assurance of analytical results. 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

    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
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 import are intended to identify forward-looking statements. In
particular, statements regarding Shore's future operations, future exploration
and development activities 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.
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: Joseph Dickson, Investor Relations Manager at
(306) 667-3505


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