Initial Orion North diamond tally disappoints (April 23, 2007)

Vancouver — Initial diamond results for the Orion North kimberlite, part of the Forte la Corne joint venture in Saskatchewan owned 60% by Shore Gold (SGF-T, SHGDF-O) and 40% by Newmont Mining (NMC-T, NEM-N), confirms the presence of macro-sized stones but has come in a bit lean of market expectations.

The sample run recovered 100.03 carats of diamonds from 3,403.65 dry tonnes of kimberlite extracted from the first nine holes of a 20-hole, large-diameter (1.2 metres) drill program. The average grade comes in at 2.94 carats per hundred tonnes.

Within the parcel, nine diamonds exceeded 1 carat in weight. The largest diamonds were: a 3-carat grey stone, a 2.86-carat off-white diamond, a 2.59-carat white stone and a 1.88-carat off-white. Just one-third of the total 1,140-stone parcel is classified as white, with another 27% described as off-white.

As operator, Shore Gold noted drilling intersected five Early Joli Fou time-equivalent kimberlites that constitute most of the sampled material. Early Joli Fou phase kimberlites at the company’s nearby Star project host the better diamond grades.

The FalC JV has earmarked $66.5 million for evaluation of the Orion kimberlite cluster. The 20-hole drill program on Orion North was recently completed with the large- diameter Bauer drills now moved to Orion South for an anticipated month-long, four-hole program.

The Orion South program is targeting the Pense kimberlite sequence previously identified in core drilling. The JV exploration team is optimistic about Orion South’s prospects based on its tonnage potential of 300-400 million tonnes, a strong macrodiamond population indicated in previous sampling and its proximity and similarities to the Star kimberlite towards the southeast.

Shore Gold also recently released results from its third phase of underground bulk sampling at its wholly owned Star kimberlite. The program yielded 678.56 carats of diamonds from 5.443.77 dry tonnes of kimberlite to give an average grade of 12.46 carats per hundred tonnes. The company recovered 79 diamonds weighing more than 1 carat with the four largest measuring 14.63, 9.09, 7.34 and 6.50 carats, respectively.

Of the 5,646 diamonds recovered, 70% were classified as white and 15% as off-white.

The phase-three program at Star sampled the Pense kimberlite facies with the better grades coming from coarser-grained material farther from the boundary with Early Joli Fou kimberlite.

About 5,500 tonnes of additional Pense kimberlite is being processed at Star.

Shore Gold has committed about $60 million this year to its ongoing Star evaluation leading to a resource calculation.

Shares of the advanced diamond hunter closed down 17% following the April 3rd Orion North diamond results, dropping $1.29 to $6.37 apiece. The sell-off wiped out about $227 million of Shore Gold’s market cap, which now stands at just over $1.1 billion based on its 176 million shares outstanding.