Star diamond project: Phase 3 Cantuar diamond results



    Two largest diamonds recovered in Saskatchewan 49.50, 22.56, 5.45 and
    5.34 carat diamonds in 205.37 carat parcel

    Stock Symbol: SGF: TSX

    SASKATOON, SK, June 27 /CNW/ - George H. Read, P. Geo., Senior Vice
President Exploration and Development, is pleased to announce the sixth set of
diamond results from Phase 3 of the underground bulk sampling of the Star
Kimberlite (Phase 1 being the original 25,000 tonne bulk sample and Phase 2
being the 18,000 tonne bulk sample). These results include the two largest
diamonds (49.50 and 22.56 carats) recovered in Saskatchewan to date (See
images and map available on www.shoregold.com). The diamond recoveries total
205.37 carats from 987.26 dry tonnes processed. Included in this release are
results for three kimberlite batches of a total of approximately 50 kimberlite
batches that will be processed as part of the Phase 3 bulk sampling program. A
total of 689 commercial sized diamonds (greater than 1.18 millimetre square
mesh screen), collectively weighing 205.20 carats, has been recovered from the
three batches. Thirty-three diamonds greater than one carat have been
recovered and the four largest stones are: 49.50, 22.56, 5.45 and 5.34 carats,
respectively. In addition, 8 diamonds (0.17 carats) were recovered down to
0.85 millimetre square mesh. The colour of 71 percent of the diamonds has been
classified as white, with a further 17 percent classified as off-white.
    These kimberlite batches were recovered from the Cantuar Kimberlite,
which was mined at the southwest end of the South 7 drive, some 200 metres
southwest of the shaft, within Star West - the portion of Star within the
claims of the Fort a la Corne Joint Venture (FALC-JV: Shore 60 percent,
Newmont 40 percent). Diamond results are still awaited from a total of 1,400
tonnes of Cantuar Kimberlite, of which some 900 tonnes has been processed
through the on-site plant and 500 tonnes remains to be processed. The
processing of this Cantuar Kimberlite is currently underway.

    
    Table 1: Kimberlite processed and diamond results for the three sample
    batches are listed in the table below. Grades are expressed in carats per
    hundred tonnes (cpht).

    -------------------------------------------------------------------------
                                       Diamonds                       Largest
                                Dry   Number of    Total     Grade     Stone
    Batch No.    Location     Tonnes    Stones   (carats)   (cpht)   (carats)
    -------------------------------------------------------------------------
               South 7 P
                (Star West
    219         FALC-JV)       306.67       201     48.07     15.67      5.45
    -------------------------------------------------------------------------
               South 7 O
                (Star West
    220         FALC-JV)       347.88       252     44.48     12.79      3.62
    -------------------------------------------------------------------------
               South 7 N
                (Star West
    225         FALC-JV)       332.71       244    112.82     33.91     49.50
    -------------------------------------------------------------------------
    Total                      987.26       697    205.37     20.80
    -------------------------------------------------------------------------
    

    Examination of the size frequency statistics for the Star Early Joli Fou
(EJF) and Cantuar diamond populations shows that the Cantuar population has an
even greater proportion of plus one carat goods than the EJF diamond
population. Typically the bulk of the diamond value lies in the stones that
are greater than one carat in size. Forty-four percent of the carats recovered
from the Cantuar are greater than one carat in size, while 31 percent of the
EJF carats are greater than one carat. The data used to generate these numbers
are listed in Table 2.

    
    Table 2: Proportion of Carats greater than 1 Carat for EJF and Cantuar
    Kimberlites at Star

    -------------------------------------------------------------------------
                                                                  Percentage
    Kimberlite                               Carats greater    Carats greater
    Lithology               Total Carats      than 1 Carat      than 1 Carat
    -------------------------------------------------------------------------
    Early Joli Fou              6,776.06          2,113.16             31.19%
    -------------------------------------------------------------------------
    Cantuar                     1,428.85            622.95             43.60%
    -------------------------------------------------------------------------
    

    The four largest stones are: 49.50 (Batch 225, Brown), 22.56 (Batch 225,
White with a slight yellow tint), 5.45 (Batch 219, Grey) and 5.34 (Batch 219,
White) carats respectively. Ten diamonds exceed two carats and 33 diamonds
exceed one carat, of which 18 are white, 6 are off-white, 7 are grey and 2 are
brown. A total of 56 diamonds exceed 0.5 carats. Seventy-one percent of this
diamond parcel is classified white in colour, with a further 17 percent
classified as off-white. Ninety-nine percent of the carat weight of this
parcel occurs in diamonds greater than 1.18 millimetre square mesh.
    Senior Vice President Exploration and Development, George Read, states:
"The 49.50 carat stone is a fragment of a considerably larger stone and the
crystal shape suggests that less than 50 percent of the original stone has
been recovered. There are multiple breakage surfaces on this stone and the
freshest breakage, probably incurred in the processing plant, only accounts
for a small loss of carat weight. Fragments comprising 3 carats that are most
likely broken from the 49.50 carat stone were found in Batch 225. This large
stone confirms the statistical modeling by Shore geologists (SGF News Release
May 12, 2005) that diamonds in excess of 100 carats occur in the Star diamond
population. The high proportion of plus one carat diamonds and the resultant
coarse size frequency distribution for the Cantuar diamond population will
have a positive effect on the economics of this kimberlite lithology. The two
largest stones (49.50 and 22.56 carats) were both recovered from a coarse
breccia unit within the Cantuar. Present estimates suggest that Star contains
some 20 to 23 million tonnes of Cantuar Kimberlite. This is a geological
estimate based on pattern drilling and is conceptual in nature. This estimate
is not a Mineral Resource and additional work may not lead to the definition
of a Mineral Resource for the Cantuar Kimberlite. The collection of data which
will be used to determine the presence of a National Instrument 43-101
compliant Mineral Resource is proceeding on schedule with the potential
definition of a Mineral Resource on Star in early 2008."
    The diamond recovery procedure includes on-site processing of kimberlite
through the modular Dense Media Separator (DMS), after which DMS concentrates
are batch fed through an X-ray Flow-sort. In order to ensure the recovery of
low luminosity diamonds, the Flow-sort tailings are processed over a grease
table. Flow-sort and grease table concentrates are transported by a secure
carrier to SGS Lakefield Research for final diamond recovery. The SGS
Lakefield Research process includes drying, screening, magnetic separation,
manual sorting and diamond weighing and description. SGS Lakefield Research is
accredited to the ISO/IEC 17025 standard by the Standards Council of Canada as
a testing laboratory for specific tests.
    The Star Kimberlite is currently being evaluated using a combination of
pattern core drilling, underground bulk sampling and large diameter drilling.
This evaluation program, with a budget of some $60 million, will determine the
presence of a National Instrument 43-101 compliant Mineral Reserve for the
Star Kimberlite. Senior Vice President Exploration and Development, George
Read, Professional Geoscientist in the Provinces of Saskatchewan and British
Columbia, is the 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
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For further information:

For further information: Adam Buchanan, Manager, Investor and Community
Relations, at (306) 667-3503.


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