SASKATOON, May 3, 2017 /CNW/ - Shore Gold Inc. ("Shore" or the "Company") reports that the unaudited results of Shore's operations for the quarter ended March 31, 2017 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:
Overview
The Company's Star – Orion South Diamond Project ("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 in the FALC-JV and Newmont Canada FN Holdings ULC ("Newmont") has a 31 percent interest.
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.
Results
For the quarter ended March 31, 2017, the Company recorded a net loss of $0.9 million or $0.00 per share compared to a net loss of $1.4 million or $0.01 per share for the same period in 2016. The losses during these quarters were due to operating costs and exploration and evaluation expenditures incurred by the Company exceeding interest income earned on cash and cash equivalents and short-term investments. Losses during the three months ended March 31, 2017 were lower than the same period in the previous year primarily due to higher expenditures that were incurred in the quarter ended March 31, 2016 relating to the 2016 drilling program. Exploration and evaluation expenditures incurred during the quarter ended March 31, 2017 were primarily related to work relating to geotechnical investigations and test work for the Project.
Selected financial highlights include:
| Condensed Consolidated Statements of Financial Position | As at March 31, 2017 | As at December 31, 2016 |
| Current assets | $ 2.3 M | $ 3.2 M |
| Capital and other assets | 1.5 M | 1.5 M |
| Current liabilities | 0.2 M | 0.3 M |
| Premium on flow-through shares and long-term liabilities | 0.8 M | 0.8 M |
| Shareholders' equity | 2.9 M | 3.6 M |
| Consolidated Statements of Loss and Comprehensive Loss | For the Quarter Ended March 31, 2017 | For the Quarter Ended March 31, 2016 |
| Interest and other income | $ 0.0 M | $ 0.0 M |
| Expenses | 0.9 M | 1.6 M |
| Flow-through premium recognized in income | 0.0 M | 0.2 M |
| Net and comprehensive loss for the period | (0.9) M | (1.4) M |
| Net loss per share for the period (basic and diluted) | (0.00) | (0.01) |
| Condensed Consolidated Statements of Cash Flows | For the Quarter Ended March 31, 2017 | For the Quarter Ended March 31, 2016 |
| Cash flows from operating activities | $ (0.9) M | $ (1.4) M |
| Cash flows from investing and financing activities | 0.0 M | 0.0 M |
| Net decrease in cash | (0.9) M | (1.4) M |
| Cash – beginning of period | 2.8 M | 4.0 M |
| Cash – end of period | 1.9 M | 2.6 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 May 3, 2017, the Company had approximately $2.1 million in cash and cash equivalents and short-term investments (excluding $0.8 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.
