Stock Symbol: SGF: TSX
SASKATOON, March 23, 2017 /CNW/ - Shore Gold Inc. ("Shore"
or the "Company") reports that the audited results of its
operations for the year ended December 31,
2016 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 results of core drilling programs on the Star and
Orion South Kimberlites;
- Announced the completion of certain geotechnical investigations
and other test work on the Star – Orion South Diamond Project
("Project");
- Announced the closing of a private placement of 9.1 million
Flow-Through Common Shares and 2.5 million Common Shares for
aggregate gross proceeds of $2.5
million;
- Announced the closing of a private placement for gross proceeds
of $1.0 million;
- Continued to seek opportunities for Project development
capital;
- Working capital of $2.9 million
at December 31, 2016;
- Issued and outstanding shares of 293,961,008 at December 31, 2016
Overview
The Project is situated in the Fort à la Corne kimberlite field
in central Saskatchewan. The
Project includes the 100 percent Shore owned Star Diamond Project,
as well as Star West and the Orion South Kimberlite, which fall
within the adjacent Fort à la Corne Joint
Venture ("FALC-JV"). Shore has a 69 percent interest (2015 –
69 percent) in the FALC-JV and Newmont Canada FN Holdings ULC
("Newmont") has a 31 percent interest (2015 – 31 percent).
During 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. The Technical Report on the Revised Resource
Estimate for the Project provided an updated Mineral Resource
Estimate for the Star and Orion South kimberlite deposits which
included an Indicated Mineral Resource of 393 million tonnes
containing 55.4 million carats of diamonds at a weighted average
price of US$210 per carat. In
addition to the Indicated Mineral Resource Estimate, the Star and
Orion South Kimberlites includes Inferred Resources containing 11.5
million carats.
Events relating to the Star - Orion South Diamond
Project
During 2016, the Company completed core drilling programs to
further expand the internal stratigraphy of the Orion South and
Star Kimberlites extending and in-filling geological continuity
from the 2015 drilling programs. Five holes, totaling 1,257.97
metres of drilling, were completed on the Star West portion of the
Star Kimberlite located within the claims of the FALC-JV (See SGF
News Release dated March 29, 2016).
This drilling on Star West aimed to delineate the extent of all
kimberlite units, particularly the lower unit, which is high value
Cantuar kimberlite. The Company also announced the completion of
the core drilling on the western margin of Orion South, which
consisted of eight holes and totaling 1,592.75 metres of drilling
(See SGF News Release dated July 19,
2016). During the third quarter of 2016, Shore announced
that it had successfully completed significant aspects of
geotechnical investigations and other test work on the Project (See
SGF News Release dated September 26,
2016).
Shore recently announced that it has successfully completed
significant aspects of test work towards an updated feasibility
study on the Project (See SGF News Release dated March 6, 2017). The work completed in recent
months includes: X-ray Transmission ("XRT") recovery of diamonds
from Star pyroclastic kimberlite, ore processing data review,
diamond parcel characterization, kimberlite particle size analysis
and overburden removal investigations. These programs investigate
the use of new technology for the efficient excavation of the open
pit and improvements to the flow-sheet of the diamond processing
plant, while simultaneously reducing pre-production capital costs
and the time to initial diamond production.
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 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 Saskatchewan Ministry of Environment ("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. The Company has
recently been informed by the Saskatchewan Minister of Environment that
additional consultation is required between the government and
First Nation and Métis communities for the government to meet its
legal obligation with respect to duty to consult and accommodate
process (See SGF News Release dated January
26, 2017). The government is proceeding with a work plan
that they anticipate will enable them to complete this required
consultation process within six months. The Ministry has indicated
to Shore that once consultations with potentially impacted First
Nation and Métis communities are thorough and completed, all
pertinent information will be reviewed before a decision under The
Environmental Assessment Act is made. During 2016 the Company also
continued with discussions concerning potential education and
training, job, business and participation opportunities for members
of James Smith First Nation,
Peter Chapman Cree Nation and
Chakastaypasin Cree Nation, collectively referred to as the James
Smith Cree Nation ("JSCN"). The intention of such discussions are
to establish mutually agreeable terms for a participation agreement
in anticipation of the proposed Project
Year to Date Results
For the year ended December 31,
2016, the Company recorded a net loss of $5.4 million or $0.02 per share compared to a net loss of
$9.1 million or $0.04 per share in 2015. 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. Exploration and evaluation expenditures incurred
during the year ended December 31,
2016 primarily related to expenditures relating to the
drilling programs, geotechnical investigations and test work as
well as the continuation of the environmental assessment process
for the Project.
Selected financial highlights include:
|
|
|
Consolidated
Statements of Financial Position
|
As
at
December
31,
2016
|
As
at
December
31,
2015
|
Current
assets
|
$
|
3.2
M
|
$
|
4.3
M
|
Capital and other
assets
|
1.5
M
|
1.7
M
|
Current
liabilities
|
0.3
M
|
0.3
M
|
Premium on
flow-through financings
|
0.2
M
|
0.5
M
|
Long-term
liabilities
|
0.6
M
|
0.6
M
|
Shareholders'
equity
|
3.6
M
|
4.6
M
|
|
|
|
|
|
|
Consolidated
Statements of Loss and Comprehensive Loss
|
Year Ended
December 31,
2016
|
Year Ended
December 31,
2015
|
Interest and other
income
|
$
|
0.0
M
|
$
|
0.0
M
|
Expenses
|
(5.9) M
|
(9.1) M
|
Loss for the period
before other items
|
(5.9) M
|
(9.1) M
|
Flow-through share
premium
|
0.5
M
|
(0.0) M
|
Net and comprehensive
loss for the year
|
(5.4) M
|
(9.1) M
|
Net loss per share
for the year (basic and diluted)
|
(0.02)
|
(0.04)
|
|
|
|
|
|
|
Consolidated
Statements of Cash Flows
|
Year Ended
December 31,
2016
|
Year Ended
December 31,
2015
|
Cash flows from
operating activities
|
$
|
(4.5)
M
|
$
|
(7.7)
M
|
Cash flows from
investing activities
|
0.1
M
|
0.9
M
|
Cash flows from
financing activities
|
3.3
M
|
5.1
M
|
Net increase
(decrease) in cash
|
(1.1)
M
|
(1.7)
M
|
Cash – beginning of
year
|
3.9
M
|
5.6
M
|
Cash – end of
year
|
2.8
M
|
3.9
M
|
Outlook
The 2016 core drilling programs were 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
updated feasibility study can positively change the economic model
for the Project by increasing the Mineral Reserve 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, 2017, the Company
had approximately $2.3 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 required for an updated feasibility study, 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 related 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 additional financing in the ensuing year; 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, the optimization of the
feasibility study, anticipated capital and operating cost savings
and the anticipated positive change in the economic model for the
Project; the aim of Shore to undertake additional studies and the
potential updating of the feasibility study; TFFE; the range of
quantity, range of grade and range of carats for the TFFE; 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.