Shore Gold plans gold spin-off (May 03, 2004)

Saskatoon-based diamond explorer Shore Gold (SGF-V) plans to hive off its portfolio of gold assets into a wholly owned subsidiary.

Shore’s gold assets include a 15% interest in the Jojay property in Saskatchewan, where resources total 325,900 tonnes grading 0.22 oz. per tonne to a depth of 150 metres; a 15% stake in the nearby Tamar property; and a 20% interest in the formerly producing Fork Lake property.

The company also has a 51% interest in the Munro Lake property, 5 km northeast of Claude Resources (CRJ-T) Seabee mine. Previous trenching over a wide shear zone at Munro Lake returned an average of 2.1 grams gold plus 0.6% copper over 10 metres.

The company says it will distribute a portion of the shares in the subsidiary to existing Shore shareholders by way of a dividend. Shore plans to finance the subsidiary via an initial public offering.

Shore says the planned split will allow it to focus its efforts on the Star Diamond project and related Fort la Corne properties.

At the Star kimberlite property, near Prince Albert, Sask., Shore is in the midst of a 25,000-tonne bulk-sampling program. Shore hopes to recover at least 3,000 carats worth of diamonds to allow for an accurate evaluation of the stones.

The samples are being collected via the sinking of a 14.5-metre diameter exploration shaft to a depth of 250 metres; more material is being collected by lateral drifting. The shaft and drifts will provide access and internal infrastructure for on going underground drilling.

At the end of March, Shore sent the first batch diamond concentrate for final diamond recovery at an independent lab. The concentrates were produced in a 10 tonne-per-hour dense media separation plant on the property.

Shore figures the Star kimberlite contains up to 500 million tonnes of kimberlite, based on limited drilling and geophysics.