TSX: SGF
CALGARY, April 26 /CNW/ - Shore Gold Inc. (SGF:TSX) ("Shore") and Diamondex Resources Ltd. (DSP-TSX.V) ("Diamondex") are pleased to announce that they have entered into an agreement with Ashton Mining of Canada Inc. ("Ashton") (a wholly owned subsidiary of Stornoway Diamond Corporation) under which Shore and Diamondex have agreed to purchase Ashton's interest in the Buffalo Hills property in north central Alberta for a total consideration of $17.5 million. The agreement provides that Shore and Diamondex will pay $8.75 million and $6.25 million respectively in cash, and Diamondex will pay a further $2.5 million in the form of common shares of Diamondex.
The Buffalo Hills Project is presently a joint venture with Ashton Diamonds (Canada) Inc., (a wholly owned subsidiary of Ashton), EnCana Corporation and Pure Diamonds Exploration Inc. To date, the joint venture has spent in excess of $30 million on exploration including geophysics, drilling and mini-bulk sampling. Under the terms of this agreement, Shore and Diamondex have the right to acquire Ashton's approximate 45 percent interest in the project on a 50/50 basis, and have the option to increase their collective pro rata interest to 72.5 percent by funding the next $15 million of exploration expenditures before April 30, 2010.
The closing of the sale is subject to a number of conditions, including:
(a) satisfactory completion of due diligence by Diamondex and Shore;
(b) the execution of a formal purchase and sale agreement; and
(c) receipt of all necessary regulatory approvals and third party
consents.
The transaction is also subject to a 30-day right of first refusal ("ROFR") of the two other joint venture partners with Pure Diamonds Exploration Inc. already having waived its ROFR. Upon closing, Diamondex will assume operatorship of the project.
The Buffalo Hills Project area is the third largest known district of significantly diamond-bearing kimberlites in Canada after Lac de Gras in the Northwest Territories and Fort a la Corne in Saskatchewan. To date, a total of 38 kimberlites have been discovered in the region, 26 of which are diamondiferous. These known kimberlite pipes range up to 47 hectares in surface area. Samples larger than ten tonnes have been collected from five of these bodies, three of which have returned a diamond content greater than 10 cpht. A 22.8 tonne sample collected from K252 in 2001 returned a diamond content of 55 cpht, the highest for the district determined to date. Four of the kimberlites are exposed in outcrop.
Shore and Diamondex believe the kimberlites in the Buffalo Hills region show the characteristic large tonnage, low grade and attractive diamond populations found in other regions that have either delivered significant economic rewards or are presently the subject of advanced exploration. Diamondex's President & CEO, Mr. Randy Turner, "is excited about the opportunity to continue advancing this project with Shore Gold as a partner. We look forward to benefiting from Shore's technical expertise in a very similar geological environment at Fort a la Corne". Shore's President & CEO, Mr. Kenneth MacNeill stated, "We are pleased to participate with Diamondex in this early stage project. From the information reviewed, the similarities to our more advanced projects in central Saskatchewan are evident. While Shore's primary focus will continue to be the Fort a la Corne region in Saskatchewan, we see an opportunity to benefit from our association with Diamondex and their operatorship of Buffalo Hills".
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.
SHORE GOLD INC.,
"Harvey J. Bay"
Harvey J. Bay
Chief Financial Officer and Chief Operating Officer
Shore Gold Inc.
DIAMONDEX RESOURCES LTD.
"Randy C. Turner"
Randy C. Turner
President and CEO
Diamondex Resources Ltd.