Stock Symbol: SGF: TSX
SASKATOON, Aug. 13, 2015 /CNW/ - Shore Gold Inc. ("Shore" or
the "Company") reports that the unaudited results of Shore's
operations for the quarter ended June 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 the completion of the core and large diameter
drilling ("LDD") programs on the Orion South Kimberlite;
- Announced the closing of a private placement for aggregate
gross proceeds of $2.0 million;
- Continued to seek opportunities for Star – Orion South Diamond
Project ("Project") development capital;
- Working capital of $3.4 million
at June 30, 2015;
- Issued and outstanding shares of 256,452,038 at June 30, 2015
Overview
During the six months ended June 30, 2015 the Company announced a 2015 large
diameter drilling ("LDD") program (see SGF News Release dated
February 19, 2015) as well as a
related core drilling program (see SGF News Release dated
March 27, 2015) on the Orion South
Kimberlite. 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 aims
to estimate macro-diamond grade information from strategically
located drill holes and this diamond grade information will be used
to re-estimate the Mineral Resource estimate for the Orion South
Kimberlite. This is the first step in a process designed to 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 June 2015 the Company announced
that both the core and LDD drilling on the Orion South Kimberlite
have been successfully completed (see SGF News Release dated
June 15, 2015). The LDD program
included twelve 24 inch holes totaling 2,559.9 metres that sampled
a total of 1,027.48 metres of Early Joli Fou and Pense kimberlite units within the Orion South
Kimberlite. The samples are being 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. The core will be logged in detail by Shore geologists
and the results will be added to the existing geological model,
expanding the model to the west and the south.
During the quarter ended June 30,
2015 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 June 30, 2015, the Company recorded a net loss of
$4.4 million or $0.02 per share compared to a net loss of
$0.9 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 six months ended
June 30, 2015, the Company recorded a
net loss of $5.6 million or
$0.02 per share compared to a net
loss of $1.8 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 six months ended
June 30, 2015 were higher than the
same period in the previous year as a result of higher exploration
and evaluation expenditures incurred relating to the drilling
programs.
Selected financial highlights include:
Condensed
Consolidated Statements of Financial Position
|
As
at
June
30,
2015
|
As
at
Dec
31,
2014
|
Current
assets
|
$ 4.9
M
|
$ 6.8
M
|
Capital and other
assets
|
2.0
M
|
2.2
M
|
Current
liabilities
|
1.4
M
|
0.4
M
|
Long-term
liabilities
|
0.6
M
|
0.6
M
|
Shareholders'
equity
|
4.9
M
|
8.0
M
|
Consolidated
Statements of Loss and
Comprehensive
Loss
|
Three
Months
Ended June
30,
2015
|
Three
Months
Ended June
30,
2014
|
Six
Months
Ended June
30,
2015
|
Six
Months
Ended June
30,
2014
|
Interest and other
income
|
$
0.0 M
|
$
0.0 M
|
$
0.0 M
|
$
0.0 M
|
Expenses
|
4.4
M
|
0.9
M
|
5.6
M
|
1.8
M
|
Net and comprehensive
loss for the period
|
(4.4) M
|
(0.9) M
|
(5.6)
M
|
(1.8)
M
|
Net loss per share
for the period (basic and diluted)
|
(0.02)
|
(0.00)
|
(0.02)
|
(0.01)
|
Condensed
Consolidated Statements of Cash Flows
|
Six
Months
Ended
June
30,
2015
|
Six
Months
Ended
June
30,
2014
|
Cash flows from
operating activities
|
$ (4.1)
M
|
$ (1.4)
M
|
Cash flows from
investing activities
|
0.0
M
|
1.1
M
|
Cash flows from
financing activities
|
1.9
M
|
0.0
M
|
Net decrease in
cash
|
(2.2) M
|
(0.3) M
|
Cash – beginning of
period
|
5.6
M
|
0.8
M
|
Cash – end of
period
|
3.4
M
|
0.5
M
|
Outlook
Additional exploration and evaluation on the
Orion South Kimberlite is being carried out during 2015. The LDD
and related core drilling program is the first step in a process
designed to improve the Mineral Resource estimate on the Orion
South Kimberlite. In addition, the Company is proceeding with the
environmental assessment process 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 August 13, 2015, the Company
had approximately $2.9 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 complete the 2015 drilling programs as
well as advance certain aspects of the project, including the
environmental assessment process, as well as general corporate
matters. The Company continues to evaluate opportunities for
development capital.
Diamond prices increased rapidly in 2011, reaching a peak in
early August of that year, when the price of rough softened as a
result of world financial uncertainties, particularly in
Europe. Rough prices rose during the first quarter of 2012
but the world financial situation once again caused the price of
rough to decrease during the second and third quarters of 2012.
Rough prices have, however, increased since the end of the third
quarter of 2012 with overall rough diamond prices at the end of
2012 increasing slightly from rough diamond prices at the end of
2011. Rough prices increased in 2014 up until September when prices
softened. Current rough prices are estimated to be near the price
used in the 2011 Feasibility Study.
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
Feasibility Study; statements relating to mineral resources and/or
reserves; 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;
the LDD and core drilling programs and Shore's objectives for the
ensuing year including the anticipated improvement in the Mineral
Resource Estimate, the re-optimization of the open pit, the
re-estimation of mineral resources, the optimization of the
Feasibility Study and the anticipated positive change in the
economic model for the Project; mineral resource estimate for the
Star and Orion South kimberlite deposits; and inferred resources
for the Star and Orion South kimberlite deposits.
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.