Stock Symbol: SGF: TSX
SASKATOON, Nov. 12, 2014 /CNW/ - Shore Gold Inc. ("Shore" or
the "Company") reports that the unaudited results of Shore's
operations for the quarter ended September
30, 2014 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 submission of the Final Environmental Impact
Statement ("EIS") of the proposed Star - Orion South Diamond
Project ("Project")
- Continued to seek opportunities for Project development
capital
- Working capital of $2.0 million
at September 30, 2014
- Issued and outstanding shares of 224,759,242 at September 30, 2014
Overview
During the third quarter of 2014, the Company's main focus was work
related to the environmental assessment process for the Project and
continuing to seek opportunities for development capital for the
Project. 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 68 percent interest in the FALC-JV and Newmont Canada
FN Holdings ULC ("Newmont") has a 32 percent interest.
The Company has completed a National Instrument
("NI") 43-101 compliant Technical Report ("Feasibility Technical
Report") documenting the Feasibility Study and Mineral Reserve for
the Project ("Feasibility Study"), the results of which were
announced in July 2011 (See SGF News
Release dated July 14, 2011). The
Feasibility Study includes a cash flow model Base Case net present
value ("NPV") of $2.1 billion (using
a 7 percent discount rate) for an Internal Rate of Return ("IRR")
of 16 percent before taxes and royalties and an after-taxes and
royalties NPV of $1.3 billion with an
IRR of 14 percent. The full details of the Feasibility Technical
Report can be viewed on the Company's website (www.shoregold.com)
or on SEDAR (www.sedar.com).
The Canadian Environmental Assessment Agency
("CEAA" or the "Agency") has completed their technical review of
the proposed Project and during the second quarter released the
final Comprehensive Study Report ("CSR") for a thirty day public
comment period (See SGF News Release dated June 25, 2014). The CSR contains CEAA's
conclusions about the potential environmental effects of the
Project. Within the CSR, CEAA concludes that the Project is not
likely to cause significant adverse environmental effects when the
implementation of proposed mitigation measures is taken into
account. The Minister of Environment will take into consideration
the CSR and all comments received and will issue an environmental
assessment decision statement, stating if the Project is likely to
cause significant adverse environmental effects, and if those
effects are justified, considering the potential benefits of the
Project.
During the quarter the Company also announced
that it has filed the Final EIS for the Project to the Ministry and
the CEAA (See SGF News Release dated August
6, 2014). The Final EIS was prepared at the request of the
Ministry and includes all updates, revisions, information requests
and the Company's responses. The Final EIS will be released for
public comment by the Saskatchewan Ministry of Environment once the
document has been reviewed.
Quarterly Results
For the quarter ended September 30,
2014, the Company recorded a net loss of $0.8 million or $0.00 per share compared to a net loss of
$1.3 million or $0.01 per share for the same period in 2013. The
losses during these quarters were due to operating costs and
exploration and evaluation expenditures incurred by the Company
exceeding interest revenue earned on cash and cash equivalents and
short-term investments.
Year to Date Results
For the nine months ended September 30,
2014, the Company recorded a net loss of $2.6 million or $0.01 per share compared to a net loss of
$4.4 million or $0.02 per share for the same period in 2013. The
losses were primarily due to ongoing operating costs and
exploration and evaluation expenditures incurred by the Company
exceeding interest revenue earned on cash and cash equivalents and
short-term investments. Losses during the nine months ended
September 30, 2014 were lower than
the same period in the previous year as a result of lower
exploration and evaluation expenditures incurred as well as lower
costs incurred due to measures taken to reduce operating
expenses.
Selected financial highlights include: |
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Condensed
Consolidated Statements of Financial Position |
As at
September 30,
2014 |
As at
Dec 31,
2013 |
Current assets |
$ 2.2 M |
$ 4.6 M |
Capital and other
assets |
2.3 M |
2.5 M |
Current
liabilities |
0.2 M |
0.4 M |
Long-term
liabilities |
0.9 M |
0.9 M |
Shareholders'
equity |
3.4 M |
5.8 M |
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Consolidated Statements of Loss
and
Comprehensive Loss |
Three Months
Ended
September 30,
2014 |
Three Months
Ended
September 30,
2013 |
Nine Months
Ended
September 30,
2014 |
Nine Months
Ended
September 30,
2013 |
Interest and other income |
$ 0.0 M |
$ 0.0 M |
$ 0.0 M |
$ 0.1 M |
Expenses |
0.8 M |
1.3 M |
2.6 M |
4.5 M |
Net and comprehensive loss for the
period |
(0.8) M |
(1.3) M |
(2.6) M |
(4.4) M |
Net loss per share for the period
(basic and diluted) |
(0.00) |
(0.01) |
(0.01) |
(0.02) |
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Condensed
Consolidated Statements of Cash Flows |
|
Nine Months
Ended
September 30,
2014 |
Nine Months
Ended
September 30,
2013 |
Cash flows from
operating activities |
$ (2.1) M |
$ (4.2) M |
Cash flows from
investing activities |
1.8 M |
3.3 M |
Net decrease in
cash |
(0.3) M |
(0.9) M |
Cash - beginning of
period |
0.8 M |
1.7 M |
Cash - end of
period |
0.5 M |
0.8 M |
Outlook
The Company is proceeding with the completion of the environmental
assessment process and continuing to seek opportunities for
development capital through participation in the Project by a third
party or a syndicate of investors. Measures taken since early 2012
will help enable the Company to conserve its cash position and
provide an extended operating window in which Shore can complete
the environmental assessment process and continue to seek
opportunities for development capital. In addition, Shore aims to
undertake additional exploration and evaluation on the Orion South
Kimberlite with the objective of potentially upgrading Inferred to
Indicated Resources on Orion
South.
As of November 12,
2014, the Company had approximately $1.9 million in cash and cash equivalents and
short-term investments (excluding $1.1
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 the EIA and
related permitting. 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 show a three percent year-on-year increase and are
estimated to be somewhat above 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 and assumptions made regarding
buoyancy in world diamond markets and changes in diamond supply and
demand; 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; availability of project financing; the
Company's intention to undertake additional exploration and
development activities and the use of funds to fund the
continuation of the EIA process.
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.