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Positive fed decision on diamond project bumps-up Shore Gold stock

4th December 2014

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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TORONTO (miningweekly.com) – The TSX-listed stock of diamond explorer Shore Gold on Thursday morning jumped nearly 24% after Canadian federal Environment Minister Leona Aglukkaq announced a favourable environmental assessment decision for the company’s Star-Orion South diamond project, in Saskatchewan.

The Saskatoon-based company, which is simultaneously advancing the FALC-JV and Star Diamond projects in the Fort à la Corne forest stated that the Minister had determined the Star diamond project was not likely to cause significant adverse environmental effects when the mitigation measures described in the comprehensive study report were taken into account.

"This federal decision marks a major positive milestone in the development of a world-class diamond mine in Saskatchewan,” Shore Gold senior VP for exploration and development George Read said.

The project, about 60 km east of the city of Prince Albert, is close to established infrastructure, including paved highways and the electrical power grid, which provide significant advantages for future mine development.

A July 2011 National Instrument 43-101-compliant technical report on the feasibility study and updated reserve estimated that the Star and Orion South kimberlite deposits held probable reserves of 279-million tonnes, containing 34.4-million carats of diamonds at a weighted average price of $242/ct, that could be profitably mined over 20 years.

The Star and Orion South kimberlites also held inferred resources containing 15.7-million carats.

The project would be built over four years, after which the two openpit mines would be excavated. The plant would process about 45 000 t/d of kimberlite rock.

Shore's plans for decommissioning include progressive reclamation activities beginning within five years from the start of  construction and would continue beyond the operations phase of the project.

In March this year, the target for further exploration (TFFE) was estimated for five partially evaluated kimberlites and the portions of the Star and Orion South kimberlites that fell outside the indicated and inferred resources.

The TFFE for these seven Fort à la Corne kimberlites was estimated to include between 983-million tonnes and 1.17-billion tonnes of kimberlite, containing between 52-million carats and 90-million carats of diamonds. Shore warned that the TFFE was conceptual in nature and was not a mineral resource and that it was uncertain whether further exploration work would result in the TFFE being delineated as a resource.

The company’s stock hit a high of C$0.235 apiece on Thursday morning in early trades.

Edited by Tracy Hancock
Creamer Media Contributing Editor

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