SASKATCHEWAN - The results of the combined Star-Orion South feasibility study points toward world class mine, Shore Gold of Saskatoon announced on July 14, 2011. The report covers both Shore's 100% owned Star diamond project and the Fort a la Corne joint venture (66% Shore and 34% Newmont Mining of Denver) located near Prince Albert.
Highlights of the report Include:
- Probable mineral reserves of 279 million diluted tonnes at a weighted average grade of 12.3 cpht containing 34.4 million carats at a weighted average price of US$242 per carat over the life of the mine (LOM);
- Total diamond production of 34.4 million carats over 20 years;
- Robust project economics due to proximity to infrastructure (electric power, paved highways, railroads, water and labour) in Saskatchewan;
- The base case has a net present value (NPV) of $2.1 billion (using a 7% discount rate) for an internal rate of return (IRR) of 16% before taxes and royalties and an after-taxes and royalties NPV of $1.3 billion with an IRR of 14%;
- The alternate case has an NPV of $3.0 billion (using a 7% discount rate) for an IRR of 19% before taxes and royalties and an after-taxes and royalties NPV of $1.9 billion with an IRR of 16%;
- Pre-production capital cost of $1.9 billion with a total capital cost of $2.5 billion (including direct, indirect costs and contingency) over the LOM and an initial capital cost payback period of 5.3 years.
Construction could start by the end of 2011 with production to begin in Q4 2016. Details are available at www.ShoreGold.com.
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