SHORE GOLD FD INC - 500 Beiträge pro Seite

[PeterTr.]

http://www.shoregold.com/#



Fact Sheet

PROJECT: Star Diamond Property
Ownership: 100% no obligations, retains all diamond marketing rights
Location: 60 kilometres east of Prince Albert, Sask.
Exploration Status: Underground Bulk Sample Completed.
Parcel of 3000 Carats valued at $135. US per carat.
Current Program: Pre-Feasibility Study
ISSUED CAPITAL: Common Shares 169,807,604 as at November 29, 2005
Fully Diluted: 180,338,566 as at November 29, 2005
Cash $287,113,000 as at November 29, 2005
Cash from full dilution: $28,000,000 as at November 29, 2005
Listing: TSX (Toronto Stock Exchange)
WORKING CAPITAL: $280,000,000 as at November 29, 2005
MANAGEMENT: Kenneth E. MacNeill, CEO
George Read P.Geol., V.P. Exploration
Harvey Bay, CFO
George Sanders, V.P. Corporate Development
CONTACT: [phone]

[PeterTr.]

Shore Gold Inc kam mit seinen Plänen, eine Diamantenmine in der kanadischen Provinz Saskatchewan zu entwickeln, einen Schritt weiter. Das Unternehmen gab am 9. November 2005 bekannt, dass es 120 Mio. C-Dollar in einer Finanzierungsrunde beschafft habe und somit die Entwicklung seines Diamantenprojekts beschleunigen könne.
Das Unternehmen aus Saskatoon gab 17,15 Millionen Stammaktien zu 7 C-Dollar je Aktie aus. Newmont Mining Corp (NYSE: NEM - Nachrichten) ANZEIGE

. kaufte 6,84 Millionen dieser Aktien, ausreichend um seinen 9,9-Prozent-Anteil an Shore Gold zu halten.

Nach Worten von Shore Gold wird diese Finanzierung die Explorationsarbeiten an einem Schwarm von diamanthaltigen Kimberlitschloten, ungefähr 60 km östlich von Prince Albert in Saskatchewan, weiter voranbringen.

Neben dieser Meldung gab es Anfang November weitere signifikante Nachrichten aus dem kanadischen Diamantensektor. Am 8. November 2005 berichtete De Beers Canada Inc., dass es zur Unterstützung der Konstruktion der Viktor Diamantenmine im Norden Ontarios im nächsten Jahr mit der Attawapiskat First Nation ein Abkommen geschlossen hat.

Ebenfalls am 8. November veröffentlichte Ashton Mining of Canada (ACA.TO - Nachrichten) , dass seine Renard Liegenschaft im Norden der kanadischen Provinz Quebec, ungefähr 1.000 km nördlich von Montreal (Goldinvest Daily berichtete darüber Ende März 2005), viel größer sein könnte als bisher angenommen. Diese Lagerstätte könnte möglicherweise zwischen 18,6 und 22 Millionen Karat an Diamanten enthalten.

Nächstes Jahr wird das Unternehmen aus Vancouver ein deutlicheres Bild von der Größe seiner Renard Liegenschaft entwickeln. Ashton plant die Sammlung und Analyse einer Probe, die mindestens 5.000 Karat an Diamanten enthält.

"Dies wird die Fehlerquote für die tatsächliche Diamantenmenge verringern. Wir würden dies nicht durchführen, falls wir nicht das Potenzial für eine Mine sehen würden", erklärte Robert Boyd, Ashtons CEO.

Die kanadische Diamantenindustrie ist sehr schnell gewachsen, seit die erste Diamantenmine des Landes den Betrieb vor nur sieben Jahren aufnahm. Auch Shore Gold handelt jetzt schnell. Das Unternehmen beschaffte in diesem Jahr in einer anderen Finanzierungsrunde 116,6 Mio. C-Dollar. In der Zwischenzeit stieg seit Januar 2005 der Aktienkurs des Unternehmens um 114 Prozent.

Shore Gold exploriert seit 2000 die Liegenschaft Star in Saskatchewan. Die geophysikalische Erkundung und die bis heute niedergebrachten Bohrungen lassen auf einen Kimberlitkörper von ungefähr 500 Millionen Tonnen schließen. Am 28. Oktober 2005 erwarb das Unternehmen nach Abschluss der Fusion mit Kensington Resources Ltd (KRT.V - Nachrichten) einen 42,4 Prozent-Anteil an der benachbarten Fort a la Corne Liegenschaft.

Shore Gold hat auf seinem Diamanten-Projekt Star bereits ungefähr 43.000 Tonnen Kimberlitgestein gefördert und daraus ungefähr 5.200 Karat an Diamanten gewonnen. Als Teil einer Prefeasibility-Studie wurde eine weitere Großprobe von 15.000 Tonnen Kimberlitgestein entnommen. Das Unternehmen beabsichtigt mit dieser Großprobe, die im Rahmen der Prefeasibility-Studie gewonnenen Diamanten auf 6.000 Karat zu erhöhen.

"Ich denke, dass in den nächsten zehn Jahren der Diamantenbergbau in Kanada weiter an Bedeutung gewinnen wird. Der Dollarwert je Karat sieht in Kanada mit Sicherheit phantastisch aus. Ich denke, dass wir in Kanada eine strahlende Zukunft für Diamanten haben", sagte Kenneth MacNeill, Shore Golds CEO.

Bis heute stammt Kanadas Diamantenproduktion aus zwei Minen. Aber diese beiden Minen, Ekati und Diavik in den Northwest Territories, fördern nach Dollarwert immerhin ungefähr 15 Prozent der Rohdiamanten in der Welt. Dies macht Kanada nach Botswana und Russland zum drittgrößten Diamantenproduzenten.

BHP Billiton aus Melbourne, Australien, nahm 1988 die Produktion in seiner Ekati Mine (80 Prozent Billiton), 300 km nordöstlich von Yellowknife auf. Die in der Nähe liegende Diavik Mine (40 Prozent Aber Diamond Corp. und 60 Prozent Rio Tinto) folgte in 2003.

Es wird erwartet, dass bis 2008 drei neue Diamantenminen ihren Betrieb aufnehmen werden. Dies könnte Kanadas Anteil auf dem Markt für Rohdiamanten auf 20 Prozent erhöhen.

Tahera Diamond Corp (TAH.TO - Nachrichten) . wird voraussichtlich in 2006 die Förderung auf seinem Jericho Projekt im Nunavut Territory aufnehmen. De Beers erwartet, den Produktionsbeginn auf Snap Lake, 220 km nordöstlich von Yellowknife, und auf der Viktor Diamantenmine bis Ende 2007 aufzunehmen.

GOLDINVEST.de berichtet und kommentiert das aktuelle Geschehen an den Rohstoffmärkten und verfolgt die Entwicklung von Minengesellschaften, insbesondere aus den Bereichen Gold- und Silber, aber auch bei Basismetallen und sonstigen Rohstoffen. Weitere Infos unter: www.goldinvest.de

Der obige Text spiegelt die Meinung des jeweiligen Kolumnisten wider. Die Smarthouse Media GmbH übernimmt für dessen Richtigkeit keine Verantwortung und schließt jegliche Regressansprüche aus.

[Art Bechstein]

Because it is presumptous to assume that KBFO subscribers actually follow my recommendations, and because I know that many did quite well buying Shore Gold and Kensington when I recommended them at $1.00 and $1.25 respectively, and because I think Shore Gold is a looming train wreck that can only be averted by something outlandish like De Beers' buyout of Snap Lake, I cannot leave this diamond story alone. In Tracker 2006-09 I rip apart what I think is an absolutely appalling news release that treats shareholders and the public as though they were all idiots. When Shore Gold even gets its anonymous bootlickers at Stockhouse mumbling with confusion, there has to be something wrong. If you care, click the link below and read on.

http://www.kaiserbottomfish.com/s/Trackers.asp?ReportID=1330…
(habs reinkopiert, weil nur mit Passwort zugänglich)

Tracker 2006-09

March 23, 2006

Shore Gold Inc (SGF-T: $7.00)

Star valuation a disturbing exercise in obfuscation

Synopsis: On March 20 Shore Gold Inc (SGF-T: $7.00) issued a press release which on the surface appeared to offer positive news, but which nevertheless caused the stock to head down promptly, trading as low as $6.54 on March 22 before recovering. This occurred without any commentators weighing in with negative interpretations. In fact, brokerage firm analysts whose employers bankrolled Shore Gold regurgitated the news release and reiterated buy recommendations. So what has caused the selling pressure? The answer lies in the stunning amount of information missing from an important but poorly written press release that has left many people wondering if Shore Gold management is trying to hide something. The Star project is a slow motion train wreck in the making because management has spun a $5.8 billion dream target for a standalone mine that so far is not supported by data, and the opportunity to distract the audience with the bigger potential of the FALC JV has been sidelined by an ill-thought out strategy to grab operatorship from De Beers. The latest news release has the earmarks of a panicked management juggling a bunch of red herrings to keep its shareholders too confused to consider bailing out. As Shore Gold does more work on Star it is obtaining a better understanding of the distribution of grade and value within the Star body. But as it does the information flow is becoming erratic and confusing. The latest news release is a collection of information fragments cobbled together in such a way as to prevent meaningful analysis, or, as I will demonstrate, cause all sorts of discomforting questions to be raised. Because these fragments do contain enough information to suggest that grade and value are mapping well to previously unsampled portions of the Star kimberlite, but because information which Shore Gold must possess and which is needed to allow shareholders to turn the "suggestion" into an "observation" has been withheld, I think the news release is either a demonstration of incompetence or a red flag that the Star kimberlite is not shaping up as expected. I do not think a company with $280 million working capital, a $1 billion plus market capitalization and a major gold producer (Newmont) as a 9.9% shareholder would issue an incompetently worded news release, so I believe the news release was very carefully worded to create the best positive spin without revealing any information that would undermine management's assertion that the Star body contains 240 million tonnes of kimberlite with an average grade of 17.8 cpht that can be economically mined at $10-$12 US per tonne. On February 10 I issued a sell recommendation to close out the Kensington and Shore Gold bottom-fish cycles after it became clear that Shore Gold wanted to take over operatorship of the FALC JV, but did it in a manner that has landed the FALC JV in legal limbo, thereby exposing Shore Gold to market fallout if the Star falls short of expectations. The latest news release spells trouble for Star and in what follows I explain why I find the news release so troubling.





Objective of round 2 bulk sampling: get bigger and better diamonds
Shore Gold undertook a second round of underground bulk sampling in 2005 in an effort to boost the 4,048.81 carat diamond parcel obtained from the first 25,525.89 tonnes so that a more reliable modeled value could be obtained. It had been observed that less large stones were recovered than indicated by the macro diamond size distribution curve, a statistical phenomenon known as "under-sampling" which disappears as the sample grows larger. Although Shore Gold management rejects micro diamonds as an exploration tool at Star, it does not reject the concept of a lognormal size distribution for diamond populations in the macro sizes of 0.85 mm or larger. It is reluctant to rely on micro diamonds because the grade in the Fort a la Corne field is so low that large samples of kimberlite are needed to obtain enough micro diamonds to properly model the macro grade potential, and because the deposition style of the FALC bodies coupled with occasional marine reworking may have sorted the diamond populations in a manner that renders meaningless a statistical technique that assumes a lognormal population of diamonds has been randomly distributed within an otherwise homogenous volume of kimberlite. The concern is that the smaller diamonds (ie micro diamonds that fall through an 0.85 mm sieve) were preferentially sorted while the larger diamonds were not. If this is the case, the abundance of micro diamonds or lack thereof sheds no light on the abundance of larger stones. This problem is more likely to be exaggerated in the fine grained pyroclastic facies than the coarser grained breccia facies. Shore Gold has disclosed that the prospective Early Joli Fou kimberlite consists of layers of alternating pyroclastic and breccia textured kimberlite, which sounds very similar to the "mega-graded beds" De Beers and Kensington encountered within the 141 pipe. The significance of the diagram below, produced by De Beers for the 8th International Kimberlite Conference in 2003, is the observation that grade and stones per tonne decrease as one moves away from the vent centre. The scale of this diagram represents a width of about 500 metres.





6,317.16 carats reported for 38,199.46 tonnes as of February 22, 2006
Shore Gold's hope was that another 15,000 tonnes of the higher grade Early Joli Fou kimberlite, which is believed to represent the bulk of the inferred 240 million tonne Star resource that supposedly grades 17.8 cpht, would deliver additional large diamonds that fill in the "holes" in the macro size distribution curve. Since the total value of a diamond parcel is skewed toward the less abundant larger diamonds, the bigger the parcel, the better should be the value until the parcel reaches a statistical limit. In February 2005 Shore Gold had reported a "measured" average value of US $110 per carat for an initial 3,050 carat parcel examined by four valuators. WWW International Diamond Consultants also produced a US $135 per carat "best fit" modeled value which compensated for statistical under-sampling. When Shore Gold restated its results in December 2005 to account for a measurement confusion between short tons and metric tonnes, it stated that 4,048.81 carats had been recovered from 25,252.89 tonnes, of which 3,791.72 carats were designated as coming from 20,649.47 tonnes of Early Joli Fou kimberlite. As of the last diamond recovery news release issued on February 22, 2006, Shore Gold had recovered an extra 2,268.35 carats from 12,946.57 tonnes of Star kimberlite extracted from the 235 metre level during the second round of underground bulk sampling. This brought the total to 6,317.16 carats recovered from the Star vent area that Shore Gold conceivably had available for a fresh valuation.

Why not report the range of the three independent valuations?
During February 2006 Shore Gold commissioned a valuation study for a parcel of 5,949.88 carats by R. Steinmetz & Sons, Rio Tinto and WWW. On March 20 Shore Gold reported an average value of US $102 per carat for the total parcel. Red flag number one is Shore Gold's failure to provide the range of valuations. The range may not be large, so why not add this information? Although Diamet never reported a range for its Ekati valuations, when Peregrine Diamonds had its parcel from DO27 valued last year it listed the various valuations without identifying who did which. Times have changed. Some people have complained that R. Steinmetz & Sons is not an independent valuator because Benny Steinmetz was at one point a significant investor in Shore Gold, but that position, if he even still owns it, has dropped below the 10% threshold that defines a shareholder as an insider. Furthermore, his associate, Brian Menell, resigned as a director of Shore Gold on October 28, 2005 just before the merger with Kensington was completed, leaving the Steinmetz group without a representative on Shore Gold's board. I would speculate that at this stage the Steinmetz group has taken its profits and is truly independent. But given the history of Stenmetz's association with Shore Gold, why not pre-empt squawking by disclosing the range, unless, of course, the range is large? Why does Shore Gold need to package itself as a champion of minimalist disclosure?

Second bulk sample did not deliver high value zinger diamonds
What the market did not seem to like was that the new $102 per carat average value was lower than the $110 per carat value obtained from the original parcel of 3,050 carats, all of which came from Early, Mid and Late Joli Fou kimberlite in the vicinity of the shaft. (The number is actually somewhat worse, but I will deal with that later.) From a statistical point of view this drop is not overly worrisome, and it was unrealistic to expect a significantly higher value in the absence of a zinger stone such as the 9.9 carat top quality stone valued at US $60,000 that De Beers and Mountain Province pulled from the Gahcho Kue project in 2001. It does, however, suggest that the Star bulk sample size has reached its statistical limit, meaning that the "under-sampling" observed by WWW is imaginary, or, as the underground program recovers samples farther away from the vent, the abundance of stones, particularly in the larger sizes, is declining. In either case, Shore Gold failed to get lucky with the second round of underground sampling.

Weight of most valuable six stones does not match reported weights of big stones
The 2006 parcel had a value of $607,000, of which the six highest value diamonds weighing 52.94 carats represented $89,216 (as valued by WWW). If we remove the top six stones, the parcel still had an impressive value of $88 per carat. The best stone was one at 5.41 carats with a value of $4,400 per carat for a total value of $23,804. Of these six diamonds, which weighed 4.06-19.66 carats, I could find close matches in previously reported "biggest diamonds" results for only two stones, the 10.11 and 19.66 carat stones, both of them from the initial bulk sample and the biggest diamonds in the top six. A third diamond weighing 8.93 carats and valued at $1,320 per carat may correspond to an 8.95 carat off-white stone from Batch 122 reported January 30. The market was unhappy because it assumed that the second bulk sample would deliver bigger and better diamonds. It did not do so.

What happened to 1,044.82 carats of EJF diamonds not included in the valuation?
That "failure", however, is not a valid reason to be concerned. What troubles me is that the carat numbers do not add up. As of February 22 Shore Gold had reported a total recovery of 6,317.16 carats, all of it described as coming from Joli Fou kimberlite. That is bigger than the 5,949.88 carats Shore Gold submitted for valuation, of which 4,991.68 carats were described as Early Joli Fou breccia or pyroclastic kimberlite. (It is possible some carats were another style of Early Joli Fou, but why exclude them when it will all have to be mined?) The first round of underground sampling in 2004-2005 had yielded 3,791.72 carats of Early Joli Fou diamonds, 231.2 carats of Mid Joli Fou diamonds, and 25.89 carats of Late Joli Fou diamonds. The second round of underground bulk sampling had produced 2,268.35 carats from 12,946.57 tonnes of kimberlite that has all been described as Early Joli Fou equivalent except for Batch 116 (367 tonnes of Mid Joli Fou yielding 23.57 cts for an indicated grade of 6.42 cpht). There should thus have been 6,036.5 carats of EJF sourced diamonds (33,229.04 tonnes with an indicated grade of 18.2 cpht) available for valuation as of February 22. What happened to the other 1,044.82 carats of EJF diamonds? Were they left out of the parcel because they were small and low value?

Why does Shore Gold not provide grades for the breccia and pyroclastic EJF units?
In its March 20 news release Shore Gold for the first time separates the EJF kimberlite into breccia and pyroclastic lithologies, which it describes as alternating units throughout the EJF. Shore Gold has classified 1,992.6 carats as coming from breccia EJF and 2,999.08 carats as coming from pyroclastic EJF. The split is 40% breccia and 60% pyroclastic, but Shore Gold states that the ratio of breccia to pyroclastic is 30% and 70% which it has confirmed through drill core logging. Shore Gold does not provide corresponding sample weight figures, even though it has them, so it is impossible to determine the grade of the breccia versus the pyroclastic units. Shore Gold also does not provide an estimate of the deposit tonnage to which the 30:70 ratio applies, which makes this ratio a meaningless number. None of the reported bulk sample results included a breccia vs pyroclastic classification for each batch. Does the 30:70 ration apply only to the footprint sampled underground, or does it apply to the entire 240 million tonne EJF footprint Shore Gold claims will grade 17.8 cpht? Why bother to give the proportion of breccia to pyroclastic volume and not their average grades? The grade of the breccia EJF and its overall tonnage within the Star body is important because Shore Gold made the breccia EFJ the "star" of its valuation news release.

$173 per carat breccia value a bonbon for suckers
In the very first paragraph Shore Gold reports that WWW has modeled a value of $173 per carat for the breccia EJF diamonds. Yes, at the top and in the headline so that this is the first thing everybody sees. You have to look in a table several paragraphs further to discover that the larger parcel of pyroclastic EJF diamonds was modeled at $112 per carat. The combined parcel comes in at a modeled value of $130 per carat, which is lower than the $135 value modeled for the 2005 parcel of 3,050 carats. Is it possible that the 2005 parcel benefited from better quality diamonds obtained from the lower grade Mid Joli Fou kimberlite? By leaving out the tonnage associated with the EJF breccia and pyroclastic parcels, Shore Gold makes it impossible to calculate the grade and figure out the rock value. Because the breccia and pyroclastic units are described as "alternating" within the EJF, they cannot be selectively mined. In effect Shore Gold seems to be describing a repeating sequence of bedded kimberlite which grades from fine-grained pyroclastic to coarser grained breccia kimberlite, just as it does within the 140/141 complex on the FALC JV. By putting front and centre the $173 per carat modeled value for a kimberlite unit that is lacking a quantitative context, Shore Gold seems to be trying to impress math-challenged investors who do not understand that in advanced diamond exploration only the equation "grade times carat value times tonnage" is relevant. It is amazing how readily the brokerage firm analysts swallowed this insult to their intelligence. Or perhaps I am dispensing benefit of doubt too generously.

Why does Shore Gold not make it easy to map results to tonnage?
If you visit Shore Gold's web site you will find the latest powerpoint presentation made at PDAC, the company's news releases, and not much else. Shore Gold does not provide cumulative tables of bulk sample results, nor does it provide diagrams with sufficient resolution to determine the location of bulk sample batches. There is no information whatsoever depicting the distribution of the various kimberlite facies or phases within the Star body. Yet for management to be in a position to talk about 240 million tonnes of kimberlite with an average grade of 17.8 cpht it has to know the volumetric distribution of Early, Mid, and Late Joli Fou kimberlite within the Star body. There is something wrong when management does not share its understanding of the geometry of a kimberlite body puffed up in public as a $5.8 billion resource. The illegible plan view diagram of the underground program suggests that most of the second underground sample was taken in a southeasterly direction where the Cantuar vent was intersected by core drilling last year about 500 metres from the shaft. While there has been some elevation changes in the adits, it does not look like Shore Gold has sampled more than a 100 metre vertical interval of the Star body in a horizontal direction. If we assume a 500 by 500 metre area with a vertical extent of 100 metres as representing Early Joli Fou kimberlite, and apply a 2.4 specific gravity, the tonnage footprint of the underground workings is at most 60 million tonnes. Shore Gold still is not in a position to map bulk sample derived diamond grades to the 240 million tonne footprint it thinks will average 17.8 cpht. This number continues to be a petrological fantasy. On March 15 Shore Gold announced that De Beers had initiated a delineation core drilling program on the FALC JV portion of the Star kimberlite. Shore Gold's petrologists will have access to the core, whose PQ size conforms with that of the delineation core drilling program conducted on Shore Gold's 100% owned portion of Star. Shore Gold's staff plans to collect its own samples from the core which it will analyze for everything but micro diamonds. It all makes sense, except Shore Gold's unwillingness to expose its data to public scrutiny.





Why did Shore Gold submit a Cantuar diamond parcel for valuation without ever reporting recovery results?
In past news releases and at PDAC Shore Gold has indicated that it plans to access the Cantuar kimberlite from underground. According to the latest news release Shore Gold has already done exactly that. The plan view diagram above shows the approximate location of the Cantuar vent. The section view diagram below shows the location of the Cantuar vent relative to the main Early Joli Fou vent as seen from the northeast. The low resolution adit map shown earlier shows the adits extending roughly to the Cantuar vent. The March 20 release states that WWW valued a 572.29 carat parcel from the Cantuar kimberlite at $145 per carat. This is not described as a modeled number, so one must assume it is an actual valuation. One stone from Cantuar weighing 4.77 carats was valued at $3,430 per carat for a total value of $16,361, making it the second most valuable diamond recovered from more than 38,000 tonnes of Star bulk sample material (in both per carat and total value terms). If we remove that diamond from the Cantuar sample, the average value drops to $117 per carat, still an impressive number for such a small parcel. But where did this Cantuar parcel come from? Shore Gold has never reported bulk sample results for kimberlite described as "Cantuar". And now that Shore Gold has reported a 572.29 carat Cantuar parcel valued at $82,982, what is the size of the sample from which it was recovered? How can a company which has provided such detailed results for each batch of bulk sample suddenly announce a valuation without disclosing any grade? If we assign the EJF grade of 17.8 cpht, the Cantuar bulk sample would have weighed 3,215 tonnes which Shore Gold should have reported as a dozen or so batches. If the sample was smaller because the grade was higher, would that not be material good news? If the grade is lower, would it not be underhanded to sneak its high value diamonds into a parcel everybody associates with Early Joli Fou kimberlite?





Cantuar diamonds may be good, but the grade is likely poor
The Cantuar kimberlite has been promoted as having the potential to make a big tonnage difference for the Star body, whose 240 million tonne footprint "grading" 17.8 cpht cannot possibly include any provision for Cantuar tonnage unless that grade, which has been touted for a year now, is pure fabrication. Why? Because the only information Shore Gold might have about Cantuar's diamond content prior to accessing the body through its adit would have to based on micro diamond analysis of core holes drilled in 2005. And of course SAhore Gold does not do micro diamond analysis because it is unreliable. The grade of the bulk sample derived Cantuar parcel is thus very material. Why is it missing from the news release, and why had Shore Gold not reported Cantuar bulk sample results as of February 22 if the recovered diamonds were included in the latest valuation parcel? Why does every bulk sample report describe the batches as Early Joli Fou equivalent if this was not the case? Are Shore Gold's petrologists getting confused about the various kimberlite phases? If the Cantuar grade is equal to or better than the 17.8 cpht average for the Early Joli Fou, this would be a very significiant development for Shore Gold shareholders. By neglecting to tell us so, Shore Gold missed an opportunity to temper the not so good EJF valuation news with excellent Cantuar news. Why did Shore Gold expose its shareholders to a stock price drop? A more common sense interpretation is that while the Cantuar diamonds are good, the grade is not. I just don't get it. The images Shore Gold has provided of the Cantuar and Penses kimberlite, of which an example with comparison to the EJF kimberlite is presented below, suggest a coarseness with good carrying capacity. Shore gold should be pumping up the Cantuar results, rather than sneaking them into a news release that everybody expects to be about Early Joli fou diamonds.





Why does Shore Gold not provide a proper breakdown of its parcel's kimberlite sources?
The Cantuar parcel mystery raises another question. While the news release explains that 4,991.68 carats came from EJF kimberlite, it does not clearly explain the source of the other 958.2 carats in the 5,949.88 carat parcel submitted for valuation. By including the high value Cantuar diamond in the list of top six diamonds valued by WWW, one can assume that the 572.29 carat Cantuar parcel represents part of the overall parcel, leaving 385.91 carats over to be assigned to MJF and LJF kimberlite. But if we assume that the Cantuar kimberlite was accessed from underground only during the past few months, that all of Shore Gold's descriptions of reported sample result batches as EJF (with the above noted MJF exception) are correct, and that the Cantuar results have not been previously reported, then we have to once again ask, what happened to the 1,044.82 EJF carats not included in the valuation parcel? Shore Gold does not state that it included any LJF or MJF diamonds, which one might assume represent the 385.91 carats of the 5,949.68 carat parcel not explained by the 4,991.68 EJF carats and 572.29 Cantuar carats. What is gained by providing only a partial explanation? Does Shore Gold think its shareholders, including Newmont which is not supposed to have insider access to data, are so dumb they won't notice? There's got to be something wrong when a Shore Gold news release has even the howler monkeys in the Stockhouse Zoo scratching their noggins in puzzlement.

Was inclusion of the Cantuar parcel an effort to hide an optical disappointment?
If we follow the math a little further, something else happens. The entire parcel had a value of $606,888 based on the $102 average. If we assume that the range of the three averages is not large, which we should unless we are prepared to accuse Shore Gold of misleading the public by burying significant variation within an average number, it is appropriate to assume that WWW's average carat value for the total parcel is close to the published figure of $102 per carat. If we then subtract the value of the 572.29 Cantuar parcel, whose average value of $145 per carat by WWW has been disclosed, then the overall parcel's value drops to $523,906 for the remaining 5,377.59 carats. That translates into an average value of $97 per carat for the Joli Fou diamonds, which is not much different from $102 per carat, but compared to last year's $110 per carat average it would qualify as an optical disappointment. Given that the grade and tonnage of the Cantuar kimberlite has not been disclosed, and perhaps is not yet known by Shore Gold, it is ridiculous to combine the Cantuar and EJF parcels for valuation purposes.

Shore Gold has a problem and the market knows it
Shore Gold really had to go out of its way to make such a mess out of its March 20 valuation news release, and in view of how many words I have expended trying to unpack the information with the result of ending up with more questions than answers, I conclude that management is hiding something from the public. You can only do so much with the disclosures a company makes, but you can do a lot with things management does not say and do which common sense and integrity would otherwise dictate. Unfortunately, this form of reading between the lines inevitably leads to negative conclusions. Shore Gold has a problem and the market knows it. Those bottom-fishers who still own Shore Gold and have a hard time following my analysis might benefit from reading an English translation of Friedrich Durrenmatt's short story "The Tunnel".

*JK does not own shares of Shore Gold