Stock Symbol: SGF:
TSX
SASKATOON, March 23, 2016 /CNW/ - Shore Gold Inc. ("Shore"
or the "Company") reports that the audited results of its
operations for the year ended December 31,
2015 will be filed today and may be viewed at www.sedar.com
once posted. A summary of key financial and operating results for
the year 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;
- Announced the closing of a bought deal private placement of
11.5 million Flow-Through Common Shares and 3.7 million Common
Shares for aggregate gross proceeds of $3.3
million;
- Announced the closing of a private placement for gross proceeds
of $2.0 million;
- Continued to seek opportunities for Project development
capital;
- Working capital of $4.0 million
at December 31, 2015;
- Issued and outstanding shares of 274,286,765 at December 31, 2015
Overview
During the fourth quarter of 2015, the Company announced Revised
Mineral Resource estimates for the Star and Orion South Kimberlites
(see SGF News Release dated November 9,
2015 and Technical Report filed December 21, 2015). Accordingly, the mineral
resources and economic assessment previously disclosed by Shore for
the Project should no longer be relied upon. These Revised Mineral
Resource estimates resulted in substantial increases in tonnes,
grade and carats in the Indicated Resource category:
- Indicated Mineral Resource for the Star Kimberlite 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 for the Orion South Kimberlite has
increased 134 percent to 27.1 million carats and the grade has
increased 1 percent to 14 cpht.
In addition to the Indicated Mineral Resource Estimate, the Star
and Orion South Kimberlites include Inferred Resources containing
11.5 million carats.
The Company also 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 2015 the Company announced a 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 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.
In June 2015 the Company announced
that both the core and LDD drilling programs had been successfully
completed (see SGF News Release dated June
15, 2015). 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)
extended the existing 100 metre grid drilling program already
completed on Orion South. Since Newmont elected to not participate
in the 2015 FALC-JV programs, their interest in the FALC-JV diluted
by 1 percent to 31 percent (2014 – 32 percent).
The Company recently announced the commencement of the 2016 core
drilling programs (See SGF News Release dated February 23, 2016). This core drilling is
required to further expand the internal stratigraphy of the Orion
South and Star Kimberlites extending and in-filling geological
continuity from the 2015 drilling programs.
During December 2014, the Canadian
Environmental Assessment Agency ("CEAA" or the "Agency") announced
an Environmental Assessment Decision for the proposed Project (See
SGF News Release dated December 3,
2014). The Honourable Leona Aglukkaq, Environment Minister,
announced that the Project "is not likely to cause significant
adverse environmental effects when the mitigation measures
described in the Comprehensive Study Report are taken into
account". The CEAA is the lead agency for the Federal government
and Saskatchewan Ministry of Environment ("Ministry") is the lead
agency on behalf of the Province, which are jointly conducting the
environmental assessment of the proposed Project. The Company filed
the final Environmental Impact Statement ("EIS") for the Project to
the Ministry and the CEAA (See SGF News Release dated August 6, 2014). The EIS was prepared at the
request of the Ministry and includes all updates, revisions,
information requests and the Company's responses. The final EIS was
released for public comment by the Ministry in January 2015. The public was invited to comment
on the EIS and the Ministry's technical review comments. The
Ministry is continuing to work on fulfilling the province's duty to
consult responsibilities with First Nation and Métis communities
potentially impacted by the proposed Project.
During 2015 the Company completed a private placement of 10.0
million 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. On December 30,
2015, the Company completed a bought deal private placement
of 11.5 million flow-through common shares and 3.7 million common
shares, for total gross proceeds of $3.3
million (See SGF News Release December 30, 2015). Gross proceeds of
$2.6 million from the flow-through
common shares will be used on exploration and evaluation activities
prior to December 31, 2016.
During 2014, the Company raised $5.5
million from flow-through financing activities to be used on
exploration and evaluation activities before the end of 2015. The
Company has fulfilled this obligation as of December 31, 2015.
Year to Date Results
For the year ended December 31,
2015, the Company recorded a net loss of $9.1 million or $0.04 per share compared to a net loss of
$3.0 million or $0.01 per share in 2014. These 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. This increase was primarily due to higher exploration
and evaluation expenditures incurred during 2015 due to the nature
of work on the Star – Orion South Diamond Project. Exploration and
evaluation expenditures incurred during the year ended December 31, 2015 primarily related to
expenditures relating to the drilling programs.
Selected financial highlights include:
Consolidated
Statements of Financial Position
|
As
at
December
31,
2015
|
As
at
December
31,
2014
|
Current
assets
|
$
4.3 M
|
$
6.8 M
|
Capital and other
assets
|
1.7
M
|
2.2
M
|
Current
liabilities
|
0.3
M
|
0.4
M
|
Premium on
flow-through financings
|
0.5
M
|
0.0
M
|
Long-term
liabilities
|
0.6
M
|
0.6
M
|
Shareholders'
equity
|
4.6
M
|
8.0
M
|
|
|
|
Consolidated
Statements of Loss and Comprehensive Loss
|
Year Ended
December 31,
2015
|
Year Ended
December 31,
2014
|
Interest and other
income
|
$ 0.0
M
|
$ 0.0
M
|
Expenses
|
(9.1) M
|
(2.9) M
|
Loss for the period
before other items
|
(9.1) M
|
(2.9) M
|
Change in
available-for-sale financial instruments
|
(0.0) M
|
(0.1) M
|
Net and comprehensive
loss for the year
|
(9.1) M
|
(3.0) M
|
Net loss per share
for the year (basic and diluted)
|
(0.04)
|
(0.01)
|
|
|
|
Consolidated
Statements of Cash Flows
|
Year Ended
December 31,
2015
|
Year Ended
December 31,
2014
|
Cash flows from
operating activities
|
$ (7.6) M
|
$ (2.6) M
|
Cash flows from
investing activities
|
0.9 M
|
2.4 M
|
Cash flows from
financing activities
|
5.1 M
|
5.0 M
|
Net increase
(decrease) in cash
|
(1.6) M
|
4.8 M
|
Cash – beginning of
year
|
5.6 M
|
0.8 M
|
Cash – end of
year
|
4.0 M
|
5.6 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
recently announced 2016 core drilling program is required to
further expand the internal stratigraphy of the Orion South and
Star Kimberlites extending and in-filling geological continuity
from the successful programs of 2015. The Company intends to update
the previous Feasibility Study with a revised mine plan, where new
technology is applied to more efficiently remove the sand and clay
of the overburden, in addition to the application of new technology
in the processing plant. 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 reducing the pre-production
capital costs and schedule to diamond production.
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 March 23, 2016, the Company
had approximately $3.1 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 recently announced core
drilling programs as well as advance certain aspects of the
Project, including the environmental assessment process, as well as
for general corporate matters.
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 Mark Shimell, Project 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 Information
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 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; Shore's objectives for the
ensuing year, including the proposed drill programs and the
re-optimisation of the open pit, the optimisation 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; and
range of tons of kimberlites not included in the TFFE.
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.
SOURCE Shore Gold Inc.