Sparring partners approve FalC budget (April 21, 2006)

The Fort la Corne (FalC) joint-venture partners have unanimously approved a whopping $43.2-million exploration budget for the 225-sq.-km diamond project, around 60 km east ofPrince Albert, Sask.

The tab will be picked up by Shore Gold (SGF-T, SHGDF-O) and De Beers Canada, each of which will chip in $20.3 million, with the balanced covered by Cameco (CCO-T, CCJ-N). The remaining partner in the project UEM has a 10% carried interest.

The budget approval comes after The Court of Queen’s Bench for Saskatchewan dismissed De Beers’ petition to have a voting agreement between the other partners voided. De Beers had also sought a restraining order preventing the joint venture’s management committee — now effectively controlled by Shore — from approving the 2006 exploration program and budget.

Shore says that the outcome of De Beers’ appeal of the ruling will have no affect on the 2006 exploration plan. The appeal hearing is slated for May 18.

Work during 2006 will focus on the Orion Cluster, a group of 8 diamondiferous kimberlites — Orion South (kimberlites nos. 140/141 and 133), Orion Centre (nos. 145 and 219) and Orion North (nos. 120, 147, 148 and 220). Based on geophysical data, the kimberlites are believed to coalesce to form a 7-km-long belt.

The cluster will first be tested with 220 PQ (7.5-cm diameter) core holes totaling around 50,000 metres on a staggered 200-metre spaced grid. The kimberlites are estimated to exceed 50 metres in thickness. Work will also include geological and geotechnical logging, whole rock geochemistry, downhole geophysics, microdiamond analysis (2,200 kg) and geohydrological studies.

Thereafter, 3,000 metres worth of large-diameter (1.2 metres) drilling in 12 holes will follow up on any units of interest. The drilling should provide around 3,750 tonnes of kimberlite that will be processed for macrodiamonds exceeding 1 mm. The budget also includes up to another 40 PQ-sized holes totaling 8,000 metres to follow up on priority targets.

The program is designed to provide data sufficient for conceptual level studies of the cluster by yearend.

Meanwhile, another 40 PQ holes totaling 5,000 metres will aim to recover 1,400 kg of material from kimberlites 118, 152, 123 for microdiamond analysis.

The program also includes an ongoing 18-hole, 4,000-metre drill program on the Star West portion of Shore’s neighbouring Star kimberlite. Around 22% of Star is estimated to lie with in the joint-venture boundaries. Seven holes have already been completed, and underground delineation drilling is gearing up. Plans also call for limited underground bulk sampling of the Cantuar kimberlite phase of the Star kimberlite.

The partners will also investigate the cost benefits of building an on-site, 50-tonne-per-hour dense media separation (DMS) plant to process the mini-bulk samples and future, large-tonnage underground bulk samples. The plant will be able to recover diamonds weighing up to 100 carats.

Shore inherited its 42.245% stake in the FalC diamond project via its merger with Kensington Resources in October. Cameco holds a 5.51% stake in the project, with UEM at 10%; De Beers Canada owns the remaining 42.245%. UEM is jointly owned by Cameco and Cogema, a subsidiary of French energy giant Areva (ARVCF-O).