Stock Symbol: SGF: TSX
SASKATOON, SK, Nov. 12, 2015 /CNW/ - Shore Gold Inc. ("Shore" or
the "Company") reports that the unaudited results of Shore's
operations for the quarter ended September
30, 2015 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 Revised Mineral Resources for the Star and Orion
South Kimberlites;
- Announced an updated valuation of the diamond parcels from the
Star – Orion South Diamond Project ("Project");
- Announced drilling results of the core and large diameter
drilling ("LDD") programs on the Orion South Kimberlite;
- Continued to seek opportunities for Project development
capital;
- Working capital of $1.9 million
at September 30, 2015;
- Issued and outstanding shares of 258,066,348 at September 30, 2015
Overview
The Company recently announced Revised Mineral Resource
estimates for the Star and Orion South Kimberlites (see SGF News
Release dated November 9, 2015).
These Revised Mineral Resource estimates resulted in substantial
increases in tonnes, grade and carats in the Indicated Resource
category. Indicated Mineral Resource on Star has increased 38
percent to 28.2 million carats and the grade has increased 11
percent to 15 carats per hundred tonnes ("cpht"). Indicated Mineral
Resource on Orion South has increased 134 percent to 27.1 million
carats and the grade has increased 1 percent to 14 cpht.
The Company also recently announced an updated valuation of the
diamond parcels from the Project (see SGF News Release dated
October 21, 2015). This updated
diamond valuation was required for the Revised Mineral Resource
estimates for the Star and Orion South Kimberlites. The Parcel
Prices show increases between 31 and 125 percent above the
March 2008 prices. Model Prices
ranging between $161 and $333 per
carat have been determined for the diamond populations of the major
kimberlite units that make up the Star and Orion South Kimberlites.
The decline in the value of the Canadian dollar against the US
dollar since January 2013 works in
favour of Project economics and the increase in Model Prices is
even greater in Canadian dollar terms.
During the nine months ended September
30, 2015 the Company announced that core and LDD drilling
programs on the Orion South Kimberlite has been successfully
completed (see SGF News Release dated June
15, 2015). The core drilling was required to accurately
document the internal stratigraphy of the Orion South Kimberlite
prior to the commencement of the LDD program. The LDD drilling
program aimed to provide diamond grade information at new grid
locations and this additional diamond grade information was used in
the revised Mineral Resource estimates. 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.
The LDD program included twelve 24 inch holes totaling 2,560.5
metres that sampled a total of 1,028.53 metres of kimberlite units
within the Orion South Kimberlite (see SGF News Release dated
September 2, 2015). The samples were
processed at Rio Tinto Canada Diamond Exploration Inc's Thunder Bay
Mineral Processing Laboratory.
The core drilling program included 18 vertical NQ (48
millimetre) diamond drill holes totaling 3,617 metres that
intersected 1,208 metres of Early Joli Fou ("EJF") and Pense kimberlite, confirming significant new
intersections of kimberlite on the western flank and southern part
of the Orion South Kimberlite. These significant new kimberlite
intersections (up to 112 metres) extend the existing 100 metre grid
drilling program already completed on Orion South.
During the second quarter the Company completed a private
placement of 10,000,000 Units at a price of $0.20 per Unit, for aggregate gross proceeds of
$2.0 million (see SGF News Release
dated June 12, 2015). Each Unit
consisted of one Common Share and one Common Share purchase
warrant. Each warrant will entitle the holder thereof to purchase
one Common Share at a price of $0.25
for a period of 18 months from the date of issuance.
Quarterly Results
For the quarter ended September 30, 2015, the Company recorded a net
loss of $2.0 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 2014. The
losses during these quarters were due to operating costs and
exploration and evaluation expenditures incurred by the Company
exceeding interest income earned on cash and cash equivalents and
short-term investments.
Year to Date Results
For the nine months ended
September 30, 2015, the Company
recorded a net loss of $7.7 million
or $0.03 per share compared to a net
loss of $2.6 million or $0.01 per share for the same period in 2014. The
losses were primarily due to ongoing operating costs and
exploration and evaluation expenditures incurred by the Company
exceeding interest income earned on cash and cash equivalents and
short-term investments. Losses during the nine months ended
September 30, 2015 were higher than
the same period in the previous year as a result of higher
exploration and evaluation expenditures incurred primarily relating
to the drilling programs.
Selected financial highlights include:
Condensed
Consolidated Statements of Financial Position
|
As
at
September
30,
2015
|
As
at
Dec
31,
2014
|
Current
assets
|
$ 2.1
M
|
$
6.8 M
|
Capital and other
assets
|
2.0
M
|
2.2
M
|
Current
liabilities
|
0.1
M
|
0.4
M
|
Long-term
liabilities
|
0.6
M
|
0.6
M
|
Shareholders'
equity
|
3.4
M
|
8.0
M
|
Consolidated
Statements of Loss and
Comprehensive
Loss
|
Three
Months
Ended
September
30,
2015
|
Three
Months
Ended
September
30,
2014
|
Nine
Months
Ended
September
30,
2015
|
Nine
Months
Ended
September
30,
2014
|
Interest and other
income
|
$ 0.0 M
|
$
0.0 M
|
$
0.0 M
|
$
0.0 M
|
Expenses
|
2.0
M
|
0.8
M
|
7.7
M
|
2.6
M
|
Net and comprehensive
loss for the period
|
(2.0) M
|
(0.8) M
|
(7.7)
M
|
(2.6)
M
|
Net loss per share
for the period (basic and diluted)
|
(0.01)
|
(0.00)
|
(0.03)
|
(0.01)
|
Condensed
Consolidated Statements of Cash Flows
|
Nine
Months
Ended
September 30,
2015
|
Nine
Months
Ended
September 30,
2014
|
Cash flows from
operating activities
|
$ (6.9)
M
|
$ (2.1)
M
|
Cash flows from
investing activities
|
0.0
M
|
1.8
M
|
Cash flows from
financing activities
|
2.1
M
|
0.0
M
|
Net decrease in
cash
|
(4.8) M
|
(0.3) M
|
Cash – beginning of
period
|
5.6
M
|
0.8
M
|
Cash – end of
period
|
0.8
M
|
0.5
M
|
Outlook
The additional exploration and evaluation
carried out during 2015 were steps required for the recently
completed Revised Mineral Resource estimates on the Orion South and
Star Kimberlites. The Revised Mineral Resource estimate will now be
incorporated into a re-optimized open pit mine plan for the
Project, which will include a re-evaluation of mineral reserves and
an economic assessment based thereon. It is anticipated this work
will be completed during 2016 and will result in a revised
Feasibility Study including a revised statement of Mineral Reserves
for the Project, if warranted, and an economic assessment based
thereon. Accordingly, the mineral resources and economic assessment
previously disclosed by Shore for the Project should no longer be
relied upon.
In addition, the Company is proceeding with the environmental
assessment process for the Project and is continuing to seek
opportunities for development capital through participation in the
Project by a third party or a syndicate of investors.
As of November 11, 2015, the
Company had approximately $1.7
million in cash and cash equivalents and short-term
investments (excluding $1.0 million
in restricted cash). A portion of the Company's cash and cash
equivalents and short-term investments will be used to advance
certain aspects of the Project, including work relating to the 2015
drilling programs, the revised Mineral Resource estimates and the
environmental assessment process, as well as for general corporate
matters. The Company continues to evaluate opportunities for
development capital.
Caution Regarding Forward-looking Statements
This news release contains forward-looking statements within the
meaning of certain securities laws, including the "safe harbour"
provisions of Canadian securities legislation 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. Forward-looking statements in this news
release include, but are not limited to, statements related to the
approval of the development of the Star - Orion South Diamond
Project; statements relating to future development of the Star -
Orion South Diamond Project and associated timelines; the
environmental assessment and permitting process; the Company's
intention to seek developmental capital though participation by a
third party or syndicate of investors; pricing information and
other assumptions and parameters; the upgrade of Inferred to
Indicated Resources; the improvement in the Mineral Resource
estimate; the re-optimization of the Star and Orion South open
pits; the inference that large high quality diamonds will be
recovered; publication of the Technical Report; the aim of Shore to
undertake additional studies and the potential upgrading of the
feasibility study and revised statement of mineral reserves and
economic assessment.
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 contractual 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.
SOURCE Shore Gold Inc.