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:

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.