Star Diamond Project: Updated NI 43-101 Mineral Resource - 23 percent increase in indicated tonnes and carats



    Stock Symbol: SGF: TSX

    SASKATOON, Feb. 27 /CNW/ - George H. Read, P. Geo., Senior Vice President
Exploration and Development, is pleased to announce an updated NI 43-101
compliant Mineral Resource estimate for the explored portion of the Star
Kimberlite ("Star"), which supersedes the previously published resource
estimate. This updated resource estimate includes the diamond results of eight
additional large diameter drillholes: 5 holes on Star and 3 holes on Star
West, totaling 1,368 metres of drilling with 306 metres in kimberlite. This
updated resource estimate also incorporates additional diamonds recovered from
concentrate and tailings audits as well as the geology's influence on the
diamond distribution within Star. The updated resource estimate has been
prepared by an independent Qualified Person ("QP") from P&E Mining Consultants
Inc. ("P&E"). The Mineral Resource estimate includes Indicated Resources of
152 million tonnes at a grade of 14 carats per hundred tonnes ("cpht") and
Inferred Resources of 26 million tonnes at a grade of 12 cpht. This updated
resource estimate increases the indicated tonnage and contained carats for
Star by 23 percent when compared to the initial resource estimate published in
June 2008 (SGF News Release June 9, 2008 and Technical Report July 22, 2008,
which are available on www.sedar.com and www.shoregold.com). Tables 1 to 3
summarize the details of the updated NI 43-101 Mineral Resource as prepared by
P&E.

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

    
    -----------------------------------------------------------------
    Resource        Kimberlite        Tonnes      Grade       Carats
    Category        Unit               x1000       cpht        x1000
    -----------------------------------------------------------------
    Indicated       Cantuar           11,500        15         1,700
    -----------------------------------------------------------------
    Indicated       Pense              8,000        16         1,300
    -----------------------------------------------------------------
    Indicated       EJF Inner         80,500        17        13,400
    -----------------------------------------------------------------
    Indicated       EJF Outer         32,200        10         3,100
    -----------------------------------------------------------------
    Indicated       MJF               18,600         5         1,000
    -----------------------------------------------------------------
    Indicated       LJF                  900         4            36
    -----------------------------------------------------------------
    Indicated       TOTAL            151,700        14        20,536
    -----------------------------------------------------------------
    Inferred        Cantuar              400         8            32
    -----------------------------------------------------------------
    Inferred        Pense              3,200        14           500
    -----------------------------------------------------------------
    Inferred        EJF Inner          2,700        16           400
    -----------------------------------------------------------------
    Inferred        EJF Outer         19,900        11         2,200
    -----------------------------------------------------------------
    Inferred        MJF                    0         5             0
    -----------------------------------------------------------------
    Inferred        LJF                    0         4             0
    -----------------------------------------------------------------
    Inferred        TOTAL             26,200        12         3,132
    -----------------------------------------------------------------

    Table Notes apply to Tables 1, 2 and 3
    (1) Mineral resources are accumulated within an optimized floating-cone
        pit shell.
    (2) Mineral resources which are not mineral reserves do not have
        demonstrated economic viability. The estimate of mineral resources
        may be materially affected by environmental, permitting, legal,
        title, taxation, socio-political, marketing or other relevant issues.
    (3) The quantity and grade of reported inferred resources in this
        estimate is conceptual in nature. There is no guarantee that all or
        any part of the mineral resource will be converted into a mineral
        reserve.
    (4) 1 millimetre bottom diamond size cut-off assumed.
    (5) WWW International Diamond Consultants Ltd. ("WWW") High modelled
        price scenario.
    (6) Grade values rounded to nearest whole number.



    Table 2. Mineral Resource Statement for the Star Diamond Project (100%   
Shore) only.

    -----------------------------------------------------------------
    Resource        Kimberlite       Tonnes       Grade       Carats
    Category        Unit              x1000        cpht        x1000
    -----------------------------------------------------------------
    Indicated       Cantuar           5,000         13           600
    -----------------------------------------------------------------
    Indicated       Pense             8,000         16         1,200
    -----------------------------------------------------------------
    Indicated       EJF Inner        58,900         17         9,800
    -----------------------------------------------------------------
    Indicated       EJF Outer        27,400         10         2,700
    -----------------------------------------------------------------
    Indicated       MJF               1,600          5           100
    -----------------------------------------------------------------
    Indicated       LJF                 200          5            10
    -----------------------------------------------------------------
    Indicated       TOTAL           101,100         14        14,410
    -----------------------------------------------------------------
    Inferred        Cantuar             300          6            18
    -----------------------------------------------------------------
    Inferred        Pense             3,200         14           500
    -----------------------------------------------------------------
    Inferred        EJF Inner         1,300         17           200
    -----------------------------------------------------------------
    Inferred        EJF Outer        17,800         11         1,900
    -----------------------------------------------------------------
    Inferred        MJF                   0          5             0
    -----------------------------------------------------------------
    Inferred        LJF                   0          4             0
    -----------------------------------------------------------------
    Inferred        TOTAL            22,600         12         2,618
    -----------------------------------------------------------------



    Table 3. Mineral Resource Statement for Star West (60% Shore, 40% Newmont)
only.

    -----------------------------------------------------------------
    Resource        Kimberlite       Tonnes       Grade       Carats
    Category        Unit              x1000        cpht        x1000
    -----------------------------------------------------------------
    Indicated       Cantuar           6,500         17         1,100
    -----------------------------------------------------------------
    Indicated       Pense                 0         16             0
    -----------------------------------------------------------------
    Indicated       EJF Inner        21,600         17         3,600
    -----------------------------------------------------------------
    Indicated       EJF Outer         4,700          9           500
    -----------------------------------------------------------------
    Indicated       MJF              17,000          6           900
    -----------------------------------------------------------------
    Indicated       LJF                 800          4            32
    -----------------------------------------------------------------
    Indicated       TOTAL            50,600         12         6,132
    -----------------------------------------------------------------
    Inferred        Cantuar             100         15            15
    -----------------------------------------------------------------
    Inferred        Pense                 0         14             0
    -----------------------------------------------------------------
    Inferred        EJF Inner         1,400         15           200
    -----------------------------------------------------------------
    Inferred        EJF Outer         2,100         10           200
    -----------------------------------------------------------------
    Inferred        MJF                   0          5             0
    -----------------------------------------------------------------
    Inferred        LJF                   0          3             0
    -----------------------------------------------------------------
    Inferred        TOTAL             3,600         12           415
    -----------------------------------------------------------------
    


    The EJF Inner and Outer Kimberlite Units are based on detailed kimberlite
geology recorded from core logging of the pattern drill program. Core logging
information is combined with whole rock geochemistry data, geophysical and
density measurements to identify the constituent kimberlite lithologies within
Star and their volcanological features that form the Star Kimberlite crater.
The EJF Inner represents coarser grained EJF kimberlite that occurs within the
volcanic cinder cone and the EJF Outer includes finer grained EJF kimberlite
that lies on and outside the cinder cone. Underground bulk sampling and large
diameter drilling ("LDD") have shown that higher grades and larger diamonds
are found within the EJF Inner Kimberlite Unit. The underground bulk sampling
of the EJF is deemed representative of the EJF Inner and also produced an
average grade of 17 cpht for the EJF, similar to the resource estimate for the
EJF Inner Kimberlite Unit.
    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,
diamond loss and dilution of LDD grade by overburden falling down LDD holes.
Detailed analysis of diamond results from LDD and underground bulk sampling
has been undertaken, and reconciled with kimberlite geology defined by core
drilling, in order to define rigorously constrained factors that are applied
to diamond grade results from LDD.
    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 resource
for Star is constrained using a floating-cone economic open pit shell. The
Mineral Resources reported in Tables 1, 2 and 3 comprise the kimberlite that
is constrained within the floating-cone pit shell and exceeds the economic
cut-off as determined by the parameters in Table 4.

    
    Table 4. Economic Parameters

    ----------------------------------------------------------
    Exchange Rate               Cdn$1.00 = US$0.85
    ----------------------------------------------------------
    Stripping Cost              Cdn$1.00/tonne
    ----------------------------------------------------------
    Mining Cost                 Cdn$1.34/rock tonne
    ----------------------------------------------------------
    Processing Cost             Cdn$3.58/ore tonne
    ----------------------------------------------------------
    General & Administration    Cdn$1.50/ore tonne
    ----------------------------------------------------------
    Overall Pit Slope Angle     25 degrees
    ----------------------------------------------------------
    Internal Cut-off            C$5.08/ore tonne
    ----------------------------------------------------------
    

    Diamond values for this resource statement are based on the March 2008
High modeled prices determined by WWW International Diamond Consultants Ltd
("WWW") and are detailed in Table 5. The High modeled prices were also used in
the June 2008 resource estimate and the use of the High modeled prices in this
resource update facilitates comparison. The diamond prices used in this
resource update will be reassessed for use in the reserve estimate scheduled
for completion in late 2009.
    WWW states "It should be noted that current diamond prices have been
substantially reduced by the present world financial crisis with rough prices
falling from their peak in August 2008 by around 40%, dependent upon size and
quality. That said, and acknowledging the high degree of uncertainty around
the diamond market and other commodities, WWW's view of future supply demand
fundamentals is positive in relation to current prices. However, we do not see
prices returning to March 2008 levels for some considerable time."


    
    Table 5. Diamond Prices

    -------------------------------------------------------------------------
    Kimberlite          Parcel Price  Model Price  Minimum 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
    -------------------------------------------------------------------------
    


    As a test of the sensitivity of the Star resource to market fluctuations,
the resource model was also run with the pit shell using the WWW Low and Model
price scenarios. The results suggest that the Star resource is relatively
insensitive to moderate diamond price fluctuations. The variations in tonnes,
grade and carats for the three WWW diamond price scenarios are listed in Table
6.


    
    Table 6. Diamond Price Sensitivity at a Cdn$5.08 cut-off

    ------------------------------------------------------------------
    WWW Price       Resource         Tonnes       Grade        Carats
    Scenario        Category         x1,000        cpht        x1,000
    ------------------------------------------------------------------
    Minimum         Indicated       138,500          14        19,900
    ------------------------------------------------------------------
                    Inferred         26,100          12         3,100
    ------------------------------------------------------------------
    Model           Indicated       146,000          14        20,300
    ------------------------------------------------------------------
                    Inferred         26,100          12         3,100
    ------------------------------------------------------------------
    High            Indicated       151,700          14        20,500
    ------------------------------------------------------------------
                    Inferred         26,200          12         3,100
    ------------------------------------------------------------------
    

    In addition to the Mineral Resource estimate determined by P&E, a further
60 to 70 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 60 to 70 million
tonne potential mineral deposit is conceptual in nature and is not a resource
estimate. It is uncertain if additional exploration work would 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 P&E
includes kimberlite volume, density and tonnage data collected during the
surface and underground core drilling program comprising 285 surface core
holes (18,259 metres of kimberlite) and 211 underground core holes (15,933
metres of kimberlite), diamond and tonnage data from underground bulk sampling
(66,988.29 dry tonnes, 10,597.58 carats and 81,773 stones) and diamond and
tonnage data from the mini-bulk samples recovered from the extensive LDD
program on Star (97 holes, 11,495.01 processed tonnes, 1,416.69 carats and
15,987 stones). This 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.
    Senior Vice President Exploration and Development, George Read, states:
"The publication of this updated NI 43-101 Mineral Resource estimate for the
Star Kimberlite is a significant milestone in the evolution of the Star
Diamond Project. This updated resource estimate has increased the carats
contained in the Indicated Resource by 23 percent and we believe that this
increase will have a significant effect on the future economics of the Star
Diamond Project. This updated resource estimate will be used in determining
the NI 43-101 compliant Mineral Reserve estimate for Star. The reserve
estimate will include a reasonable estimate of the operating cost and capital
of a potential mine at Star. We are on track to deliver the reserve estimate
on Star by late 2009."
    Shore commissioned the NI 43-101 Mineral Resource estimate and related
Technical Report for the Star and Star West properties 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 anticipates publication of the Technical Report as soon as it is
available, within the regulated 45 day period after this news 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. Fred Brown CPG, PrSciNat, of P&E is the independent Qualified Person
who supervised the preparation of the updated Mineral Resource estimate for
the Star Kimberlite. Mr. Brown, a Certified Professional Geologist (No.11015)
with the American Institute of Professional Geologists and a registered
Professional Natural Scientist with the South African Council for Natural
Scientific Professions (No.400008/04), has over 21 years of worldwide
experience in mining resource and reserve assessments and related work and has
worked on diamond mines in southern Africa for De Beers. His specialties
include resource estimation, ore deposit modeling, due diligence reviews,
project evaluation, mining geology, geostatistical studies and preparation of
NI 43-101 reports. He is regarded as one of the leading authorities in diamond
resource evaluation and diamond geostatistics. P&E Mining Consultants Inc. is
an established and internationally recognized geological and mine engineering
consulting firm specializing in resource estimates, scoping, pre-feasibility
studies and participation with other consulting firms on feasibility studies,
with over 70 projects undertaken in the last 5 years. P&E has Certificates of
Authorization from the Association of Professional Geoscientists of Ontario
and Professional Engineers Ontario. Mr. Eugene Puritch, P.Eng. (Haileybury
School of Mines, Queen's University), a principal of P&E Mining Consultants
Inc., has more than 30 years experience in mine evaluation and resource
estimating for some of Canada's largest mining companies. He has undertaken
more than 120 resource estimates and mine designs in his career, many of which
formed the basis for feasibility studies and subsequent production decisions.
Prior to co-founding P&E Mining Consultants Inc., Mr. Puritch was regularly
under contract to provide his services to Micon International Ltd., Aker
Solutions Canada Inc., A.C.A. Howe International Ltd. and Strathcona Mineral
Services. Dr. Wayne Ewert, P.Geo. (PhD, Geology, Carleton University, Ottawa,
Canada and B.Sc. University of Waterloo, Canada) a principal of P&E Mining
Consultants, has over 40 years of worldwide experience in diversified
exploration, project evaluation and resource based geological modeling. He has
over 18 years of international consulting experience in support of project
acquisitions and related financing activities. His experience includes
involvement with the evaluation and assessment of diamond projects in Lesotho
and South Africa on behalf of A.C.A. Howe International. P&E 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.
Unless otherwise required by applicable securities legislation, 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 and www.shoregold.com


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