SASKATOON, Nov. 12 /CNW/ -- Shore Gold Inc. ("Shore" or the "Company") reports that the unaudited results of Shore's operations for the quarter ended September 30, 2009 will be filed today on SEDAR and may be viewed at www.sedar.com once posted. A summary of key financial and operating results for the quarter is as follows:
Highlights
- Announced the completion of the pre-feasibility study ("PFS") and
Reserve Estimate on the Star Diamond Project ("Star")
- Announced the completion of the Resource Estimate for the explored
portion of the Orion South Kimberlite ("OS") located within the Fort
à la Corne Joint Venture ("FALC-JV")
- Signed letter agreement ("Letter Agreement") with Saskatchewan Power
Corporation ("SaskPower") to commence preliminary engineering studies
for a power supply to the Fort à la Corne area
- Working capital of $16.3 million at September 30, 2009
- Issued and outstanding shares of 200,154,242 at September 30, 2009
- Closed a private placement for gross proceeds of $27.5 million on
October 13, 2009
Overview
Star Diamond Project
During the quarter, the Company announced the positive results of the PFS and Reserve estimate on Star (See SGF News Release August 27, 2009). The Mineral Reserve estimate, as prepared by independent Qualified Persons from P&E Mining Consultants Inc. ("P&E"), includes Probable Mineral Reserves of 171 million tonnes at a grade of 12 cpht containing 20 million carats. Shore commissioned the PFS, National Instrument ("NI") 43-101 compliant Mineral Reserve estimate and related Technical Report for Star (which includes Star West, that portion of the Star Kimberlite that falls within the FALC-JV) and, as such, the PFS and Technical Report are the sole responsibility of Shore. The Technical Report that documents the PFS and Mineral Reserve estimate can be viewed on the Company's website (www.shoregold.com) or on SEDAR (www.sedar.com).
The Company announced that a Letter Agreement has been signed between Shore and SaskPower to provide planning services for a potential electrical power supply to Star (See SGF News Release September 30, 2009). Specifically, Shore requires SaskPower to carry out the preliminary engineering and environmental studies required to identify preferred routing options for the location of power lines to connect Star to the SaskPower transmission system in order for SaskPower to serve Shore's future anticipated power requirements.
FALC-JV Programs
During the quarter, the Company announced the completion of the Mineral Resource estimate for the explored portion of OS, which is located at the southern end of the Orion Kimberlite Cluster within the FALC-JV (See SGF News Release September 10, 2009). The Mineral Resource estimate, as prepared by independent Qualified Persons from P&E, includes Indicated Resources of 83.8 million tonnes at a grade of 13.8 cpht for a total of approximately 11.6 million carats and Inferred Resources of 98.0 million tonnes at a grade of 12.8 cpht for a total of approximately 12.6 million carats. Shore commissioned the Mineral Resource estimate for OS pursuant to its obligation under NI 43-101 to prepare and file a Technical Report. The Technical Report is the sole responsibility of Shore and can be viewed on the Company's website (www.shoregold.com) or on SEDAR (www.sedar.com).
The OS Mineral Resource estimate proves the potential of the FALC-JV to contain diamondiferous kimberlites of substantial value. This Mineral Resource estimate, when jointly evaluated with the Star Mineral Reserve estimate, has the potential to significantly enhance the economics of a diamond mine within the Fort à la Corne area of central Saskatchewan.
Quarterly Results
For the quarter ended September 30, 2009, the Company recorded a net loss of $1.3 million or $0.01 per share compared to a net loss of $0.8 million or $0.00 per share for the same period in 2008. The losses for the quarters ended September 30, 2009 and September 30, 2008 were due to ongoing operating costs incurred by the Company exceeding interest revenue earned on cash and cash equivalents and short-term investments.
Year to Date Results
For the nine-month period ended September 30, 2009, the Company recorded a net loss of $7.4 million or $0.04 per share compared to a net loss of $5.8 million or $0.03 per share for the same period in 2008. Contributing to the loss during the nine-month period ended September 30, 2009 was the $6.3 million write-down of exploration expenditures incurred by the Company on certain of its mineral properties, the fair value of stock-based compensation expensed ($0.5 million), and the $0.4 million impairment in fair value of long-term investments held by the Company. For the nine-month period ended September 30, 2009 the Company reported interest and other revenue of $0.1 million compared to $1.4 million for the nine-month period ended September 30, 2008. This $1.3 million decrease in revenue from the nine-month period ended September 30, 2008 was from a reduction in the Company's cash and cash equivalents after incurring ongoing exploration expenditures on the Fort à la Corne and Buffalo Hills projects and from lower interest earned by the Company as a result of falling interest rates. The net loss for the comparative period in 2008 was primarily due to the fair value of stock-based compensation expensed ($2.7 million) as well as the $2.0 million impairment in fair value of asset-backed commercial paper ("ABCP").
Selected financial highlights include:
As at As at
September 30, December 31,
Consolidated Balance Sheets 2009 2008
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Current assets $ 16.9 M $ 35.4 M
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Capital and other assets 228.8 M 231.6 M
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Current liabilities 0.7 M 11.8 M
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Long-term liabilities 1.4 M 1.6 M
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Share capital 769.6 M 772.8 M
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Contributed surplus 26.5 M 25.9 M
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Deficit 552.5 M 545.1 M
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Three months Three months Nine months Nine months
Consolidated Ended Ended Ended Ended
Statements of September 30, September 30, September 30, September 30,
Income 2009 2008 2009 2008
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Interest and other
income $ 0.0 M $ 0.3 M $ 0.1 M $ 1.4 M
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Operating expenses 1.4 M 1.3 M 4.2 M 5.9 M
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Loss for the period
before other items (1.4)M (1.0)M (4.1)M (4.5)M
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Write-down of
mineral properties 0.0 M 0.0 M (6.3)M 0.0 M
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Change in fair
value of
investments 0.1 M 0.0 M (0.4)M (2.0)M
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Loss from Wescan
Goldfields Inc. 0.0 M (0.1)M 0.0 M (0.2)M
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Future income taxes 0.0 M 0.3 M 3.4 M 0.9 M
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Net and
comprehensive loss
for the period (1.3)M (0.8)M (7.4)M (5.8)M
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Loss per share (0.01) (0.00) (0.04) (0.03)
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Three months Three months Nine months Nine months
Consolidated Ended Ended Ended Ended
Statements of September 30, September 30, September 30, September 30,
Cash Flows 2009 2008 2009 2008
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Cash flows from
operating
activities $ (1.1)M $ (0.5)M $ (3.4)M $ (2.5)M
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Cash flows from
investing
activities 0.9 M (2.8)M (16.5)M (12.9)M
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Cash flows from
financing
activities 0.1 M 0.0 M 0.1 M 0.5 M
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Net decrease in cash (0.1)M (3.3)M (19.8)M (14.9)M
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Cash - beginning of
period 2.9 M 20.3 M 22.6 M 31.9 M
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Cash - end of period 2.8 M 17.0 M 2.8 M 17.0 M
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Subsequent to the quarter, the Company announced the completion of a private placement of 14.3 million Common Shares and 10.0 million Flow-Through Common Shares of the Company for gross proceeds of $27.5 million, of which $12.5 million will be used by Shore to incur Canadian exploration expenses prior to December 31, 2010 (See SGF News Release October 13, 2009).
Outlook
As of November 5, 2009, the Company had approximately $41.6 million in cash and cash equivalents and short-term investments. These funds will be used to complete the PFS on the combined Star and OS Diamond Project and, thereafter, the detailed feasibility study on the combined Projects. These funds will also be used to complete planned exploration programs on the Buffalo Hills Joint Venture and for general corporate matters. Cash and cash equivalents and short-term investments may also be used to fund various other exploration activities as well as acquisition and exploration of additional properties as opportunities warrant.
A PFS on the combined Star and OS Diamond project is currently underway with results to be released as soon as available.
Technical Information
All technical information in this press release has been prepared under the supervision of George Read, Senior Vice-President of Exploration and Development, Professional Geoscientist in the Provinces of Saskatchewan and British Columbia, and Shawn Harvey, Geology Manager, Professional Geoscientist in the Province of Saskatchewan, who are the Company's "Qualified Persons" under the definition of NI 43-101.
Caution Regarding Forward-looking Statements
This news release may contain forward-looking statements as defined by certain securities laws, including the "safe harbour" provisions of the Ontario Securities Act and the United States Private Securities Litigation Reform Act of 1995. 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, and, in particular, statements regarding Shore's future operations, future exploration and development activities or other development plans contain forward-looking statements.
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 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, news releases and technical reports. 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 may be made.
