Stock Symbol: SGF: TSX
SASKATOON, Feb. 19, 2015 /CNW/ - George H. Read, P. Geo., Senior Vice President Exploration and Development of Shore Gold Inc. ("Shore" or the "Company") is pleased to announce that Shore will commence a large diameter drilling ("LDD") program consisting of up to twelve 24 inch holes on the Orion South Kimberlite. This LDD program aims to estimate macro-diamond (+0.85 millimetre) grade information from strategically located drillholes and this diamond grade information will be used to augment the Mineral Resource estimate for the Orion South Kimberlite. The planned LDD program targets up to 12 holes, with a total of some 2,600 metres of drilling, including some 1,440 metres in overburden and 1,160 metres of kimberlite down to a maximum depth of about 250 metres below surface. Eleven of the proposed holes are to be in close proximity (less than 10 metres) to existing diamond drill core holes, from which the kimberlite has been logged in detail. The other proposed hole is to be preceded by a core hole to ensure a good understanding of the kimberlite stratigraphy. The program is also designed to incorporate 11 previously drilled LDD holes (ten 48 inch holes and one 24 inch hole) that were not fully utilized in the previous Orion South Mineral Resource estimate.
Shore has signed a contract with Foraco Canada Limited ("Foraco") for the drilling required for the program. Foraco personnel have extensive experience of LDD programs on kimberlites and their drilling equipment has recently been used on kimberlites in the Northwest Territories and in the past was used to successfully evaluate the Grib Kimberlite in Russia. The program will use the reverse flood method of drilling, which is a standard procedure for the collection of mini-bulk samples of kimberlite for macro-diamond grade estimation. The drill rig for this LDD program is sourced from a division of Foraco in Europe and the rig is currently being shipped to Canada by sea and scheduled to arrive in Halifax in early March.
The LDD program is planned to commence in late April to avoid severe winter weather conditions that increase drilling costs. The kimberlite chips collected at the drill will be stored in bulk bags and regularly shipped to an offsite commercial laboratory for the recovery of macro-diamonds greater than 0.85 millimetres. The drill program is expected to take some three months to complete.
Senior Vice President Exploration and Development, George Read, states: "This LDD program is the first step in a process to substantially improve the Mineral Resource estimate on the Orion South Kimberlite. The original evaluation of the Orion South Kimberlite, using underground bulk sampling and LDD mini-bulk sampling, was curtailed by the world financial crisis of late 2008. In the mine plan contemplated by the Feasibility Study of July 2011, Star is mined first, followed by Orion South. However, Orion South has some 30 metres less overburden than Star and it is anticipated that this has the potential to reduce the project per-stripping time significantly if mined first. Orion South also has higher grade Early Joli Fou kimberlite in direct contact with the overburden, and this could result in stronger early cash flow than in the case of Star. The Company intends to re-estimate the Orion South Mineral Resource, including the new LDD holes and then re-optimise the open pit on Orion South using the updated Mineral Resource estimate and diamond prices. Thereafter we aim to optimise the existing Feasibility Study with a revised mine plan, where Orion South is mined first. Preliminary calculations suggest that such an optimised Feasibility Study, with a new mine plan, can positively change the economic model for the Project by increasing the Mineral Resource Estimate and decreasing the pre-production capital costs and the time to achieve diamond production."
The Star-Orion South Diamond Project is located in central Saskatchewan some 60 kilometres east of the city of Prince Albert. The Project is in close proximity to established infrastructure, including paved highways and the electrical power grid, which provide significant advantages for future mine development. The NI 43-101 compliant Technical Report on the Feasibility Study and Updated Mineral Reserve for the Star-Orion South Diamond Project dated July 14, 2011 provided an updated Mineral Reserve Estimate for the Star and Orion South kimberlite deposits: Probable Mineral Reserves of 279 million tonnes containing 34.4 million carats of diamonds at a weighted average price of US$242 per carat, that can be profitably mined over 20 years. In addition to the Mineral Reserve Estimate, the Star and Orion South Kimberlites have been estimated to include Inferred Resources containing 15.7 million carats.
The Project includes a four-year construction period followed by the excavation of two open-pit mines and processing of approximately 45,000 tonnes of kimberlite rock per day over a projected 20-year period. Shore's plans for decommissioning include progressive reclamation activities beginning within five years from the start of construction and will continue beyond the operations phase of the Project.
In March 2014 an estimate was made of the Target for Further Exploration ("TFFE", formerly known as "Potential Mineral Deposit") for five partially evaluated kimberlites and the portions of the Star and Orion South Kimberlites, which fall outside the Indicated and Inferred Resources previously estimated (see SGF News Release July 14, 2011). The TFFE for these seven Fort à la Corne Kimberlites is estimated to include between 983 million and 1.17 billion tonnes of kimberlite containing between 52 and 90 million carats of diamonds. The TFFE is conceptual in nature and is not a Mineral Resource and it is uncertain whether further exploration work will result in the TFFE being delineated as a Mineral Resource.
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
This news release contains forward-looking statements as defined by certain securities laws, including the "safe harbour" provisions of Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "believe", "expect", "plan", "intend", "forecast", "target", "project", "guidance", "may", "will", "should", "could", "estimate", "predict" or similar words suggesting future outcomes or language suggesting an outlook. In particular, statements regarding Shore's future operations, future exploration and development activities or other development plans constitute forward-looking statements. By their nature, statements referring to mineral reserves, mineral resources or TFFE constitute forward-looking statements.
Forward-looking statements in this press release include, but are not limited to statements with respect to the proposed LDD program (including the number of holes to be drilled, the metres to be drilled, the timing of the drilling and the duration of the program) and Shore's objectives for the ensuing year including the the anticipated improvement in the Mineral Resource Estimate, the re-optimization of the open pit, the re-estimation of the Mineral Resources, the optimization of the feasibility study and the anticipated positive change in the economic model for the Project; TFFE; the range of quantity, range of grade and range of carats for the TFFE; mineral resource estimate for the Star and Orion South kimberlite deposits; inferred resources for the Star and Orion South kimberlite deposits; range of tons of kimberlites not included in the TFFE; the aim of Shore to undertake additional studies and the potential upgrading of the Feasibility Study and inferred to indicated resources.
These forward-looking statements are based on Shore's current beliefs as well as assumptions made by and information currently available to it and involve inherent risks and uncertainties, both general and specific.
Risks exist that forward-looking statements will not be achieved due to a number of factors including, but not limited to, developments in world diamond markets, changes in diamond prices, 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, development, closure, 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. Shore's anticipation of and success in managing the foregoing risks could cause actual results to differ materially from what is anticipated in such forward-looking statements.
Although management considers the assumptions contained in forward-looking statements to be reasonable based on information currently available to it, those assumptions may prove to be incorrect. When making decisions with respect to Shore, investors and others should not place undue reliance on these statements and should carefully consider the foregoing factors and other uncertainties and potential events. Unless required by applicable securities law, Shore does not undertake to update any forward-looking statement that is made herein.
SOURCE Shore Gold Inc.
For further information: Joseph Dickson, Investor Relations Manager at (306) 664-2202 and www.shoregold.com