Shore Gold Inc. announces year end results

    Stock Symbol: SGF: TSX

    SASKATOON, March 25 /CNW/ - Shore Gold Inc. ("Shore" or the "Company")
reports that the audited results of its operations for the year ended
December 31, 2007 will be filed today and may be viewed at once
posted. A summary of key financial and operating results for the year are as


    -   Spending of $25.8 million on the Star Diamond Project advanced
        exploration program and $27.4 million on the Company's share of the
        Fort à la Corne Joint Venture ("FALC-JV") exploration program
    -   Modeled price estimate of US$170 per carat for the completed Star
        Kimberlite underground bulk sampling program
    -   Commencement of the shaft sinking on Orion South
    -   Announcement of geological estimates for Orion South (between 360 and
        400 million tonnes of diamondiferous kimberlite) and Orion Centre
        (between 150 and 167 million tonnes of diamondiferous kimberlite),
        completing the geological modeling of the FALC-JV's Orion Kimberlite
        Cluster (including Orion North), which is now estimated to contain
        between 1.3 and 1.5 billion tonnes of kimberlite
    -   Acquisition of a 22.5% interest in the Buffalo Hills Joint Venture
        (Buffalo Hills, Alberta) for $8.75 million
    -   Announcement of project budgets for 2008, consisting of $7.9 million
        for the Star Diamond Project, $86.8 million for the FALC-JV and
        $3.5 million for the Buffalo Hills Joint Venture
    -   Working capital of $65.2 million at December 31, 2007
    -   Issued and outstanding shares of 182,684,242 at December 31, 2007


    Star Diamond Project Advanced Exploration Program

    Shore's underground bulk sampling program of the Star Kimberlite, which
commenced in 2003, was completed in April 2007 (See SGF News Release April 24,
2007). In total, three phases of underground bulk sampling were performed on
the Star Kimberlite, resulting in 71,956 tonnes of kimberlite being processed.
This processed kimberlite produced 82,390 diamonds (+0.85 millimetre) weighing
a total of 10,843 carats.
    On November 5, 2007, the Company announced valuation results for the
complete Star Kimberlite underground bulk sampling diamond parcel (See SGF
News Release November 5, 2007). 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 Northwest Territories and
Nunavut. The modeled price of US$170 per carat is a twenty-six percent
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, Early Joli
Fou ("EJF"), Mid Joli Fou ("MJF") and Late Joli Fou ("LJF"). Diamond parcels
recovered from these individual lithologies were valued to determine modeled
diamond prices that will be used in the Mineral Reserve calculation for the
Star Kimberlite.
    The Star Diamond Project has now advanced from a capital intensive data
gathering exercise (underground bulk sampling, core drilling and large
diameter drilling) to lower cost desk-top engineering studies and data
analysis. The Company anticipates a Mineral Resource estimate for the Star
Kimberlite to be defined by approximately the first quarter of 2008.

    FALC-JV Exploration Programs

    During 2007, the major activities on the FALC-JV Project were the
commencement of the sinking of a shaft on Orion South, LD drilling programs on
Orion South, Orion North and Star West, the processing of samples from the LD
drill programs and the underground bulk sampling from Star West.
    In July of 2007, the final diamond results from a four-hole LD drilling
program on the Orion South Kimberlite were announced. A total of 78.22 carats
were recovered from the processing of 1,448.05 dry tonnes of kimberlite from
this LD drilling (See SGF News Release June 25, 2007). Kimberlite with
elevated grades (7.00 to 28.50 carats per hundred tonnes ("cpht")) was
encountered at various depths in all four holes. This four-hole program
targeted the Pense lithology (estimated to be 112-124 million tonnes), since
previous drill programs had targeted the EJF lithology (estimated to be 
176-196 million tonnes). The elevated grades found in the Pense lithology,
along with the significant estimated volumes of EJF and Pense diamond bearing
kimberlite, justified the next phase of exploration on Orion South. On
October 17, 2007, the Company announced that the FALC-JV participants approved
the sinking of a shaft for underground bulk sampling of Orion South (See SGF
News Release October 17, 2007). The shaft will enable the collection of bulk
samples from the three predominant kimberlite phases within Orion South 
(EJF-1, EJF-2 and Pense). Shaft sinking currently underway on Orion South
intersected kimberlite at 102.6 metres below surface on December 29, 2007 and
is currently at a depth of some 185 metres below surface. The shaft will reach
a depth of 210 metres below surface and current scheduling suggests this depth
will be attained in the second quarter of 2008.
    The Company also announced geological estimates for Orion South (between
360 and 400 million tonnes of diamondiferous kimberlite) and Orion Centre
(between 150 and 167 million tonnes of diamondiferous kimberlite) (See SGF
News Releases dated March 2, 2007 and November 2, 2007). These estimates
completed 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 (including the geological estimate for Orion North of between 800
and 870 million tonnes, which was announced in 2006) and is the world's
largest known accumulation of contiguous diamondiferous kimberlite. The
tonnage estimates are conceptual in nature and are not mineral resources as
there has not been sufficient exploration carried out to date to define
mineral resources on these properties. Presently, it is uncertain if further
exploration will result in any of these properties being delineated as a
mineral resource. This tonnage estimate for the Orion Cluster does not include
other kimberlites located within the claims of the FALC-JV such as the Taurus
Kimberlite Cluster, which is the next area of interest for the FALC-JV
program. The Taurus Kimberlite Cluster lies to the west of the Orion Cluster
and includes eight coalescing kimberlites that result in over six kilometres
of contiguous kimberlite.

    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 percent 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 percent interest in the Buffalo Hills Joint
Venture, in which EnCana Corporation holds a 43 percent interest and Pure
Diamonds Exploration Inc. holds the remaining 12 percent interest. Diamondex
has been appointed operator of the Buffalo Hills Joint Venture.

    Year to Date Results

    For the year ended December 31, 2007, the Company recorded net income of
$7.5 million or $0.04 per share compared to a net loss recognized for
accounting purposes of $77.5 million, or $0.44 per share for 2006. This net
income was due to the $16.0 million future income tax recovery that was
recorded during the year ended December 31, 2007 primarily resulting from the
federal government substantively enacting a decrease in corporate income tax
rates. This was offset by the fair value of stock-based compensation expensed
during the year ($5.2 million) and the $2.0 million impairment in fair value
of third-party asset-backed commercial paper ("ABCP") held by the Company. The
loss for the year ended December 31, 2006 primarily related to the loss
recognized for accounting purposes on the sale of a 40 percent interest of the
FALC-JV to Newmont of $124.5 million (net of a $55.9 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 2007 compared to 2006 which was
the outcome of having less cash on hand after incurring on-going exploration
expenditures on the Fort à la Corne projects, the acquisition of a
22.5 percent interest in the Buffalo Hills Joint Venture as well as the 17.755
percent acquisition of the FALC-JV during the third quarter of 2006.

    Selected financial highlights include:
    Consolidated Balance Sheets                    As at             As at
                                                December 31,     December 31,
                                                    2007              2006
    Current assets                               $  75.4 M         $ 130.0 M
    Capital and other assets                       743.7 M           657.5 M
    Current liabilities                             10.1 M            11.9 M
    Future income tax and other long-term
     liabilities                                   105.3 M           117.5 M
    Share capital                                  768.3 M           733.5 M
    Contributed surplus                             22.5 M            19.2 M
    Deficit                                         87.1 M            94.6 M

    Consolidated Statements of Income (Loss)    Year Ended        Year Ended
                                               December 31,      December 31,
                                                    2007              2006
    Interest Income                              $   4.0 M         $   9.5 M
    Operating Expenses                              10.2 M             6.3 M
    Income (loss) for the period before
     other items                                    (6.2)M             3.2 M
    Impairment in fair value of ABCP                (2.0)M               - M
    Loss on sale of property interest                  - M          (180.4)M
    Income tax recovery                             16.0 M            99.5 M
    Other income (loss)                             (0.3)M             0.2 M
    Net income (loss) for the period                 7.5 M           (77.5)M
    Income (loss) per share (basic and
     diluted)                                       0.04             (0.44)

    Consolidated Statements of Cash Flows       Year Ended        Year Ended
                                               December 31,      December 31,
                                                    2007              2006
    Cash flows from operating activities         $  (0.2)M         $   4.6 M
    Cash flows from investing activities           (63.1)M          (220.5)M
    Cash flows from financing activities            30.6 M            19.2 M
    Net increase (decrease) in cash                (32.7)M          (196.7)M
    Cash - beginning of period                      65.0 M           261.7 M
    Cash - end of period                            32.3 M            65.0 M


    As of March 20, 2008, the Company had approximately $56 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 and to fund
the Company's portion of the FALC-JV and Buffalo Hills exploration programs.
Amounts budgeted for these three principal projects for 2008 are: Star Diamond
Project $7.0 million (100 percent Shore), FALC-JV $86.8 million (of which
60 percent will be funded by the Company) and Buffalo Hills Joint Venture
$3.5 million (which represents Shore's 50 percent cost share). Also budgeted
for 2008 is $0.9 million for exploration drilling of other kimberlite targets
contained with Shore's mineral claims. The advanced exploration program of the
Star Kimberlite will be conducted in order to determine the project's
viability under current economic conditions. This will entail desk-top
engineering studies and data analysis which will integrate kimberlite tonnes
and diamond data to define a Mineral Resource conforming to NI 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 approximately the first quarter of 2008, followed by a
Mineral Reserve by mid-2008 and a bankable feasibility study by the end of
2008. The FALC-JV has similar objectives; however, based on the stage of
current exploration programs on the Orion Cluster, a Mineral Resource estimate
is not anticipated for any of the FALC-JV's diamondiferous kimberlite bodies
until approximately 2009 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
press releases, 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
evaluation study or other development plans contain forward-looking
    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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