Star Diamond Project

Location and Access

The Star Diamond project is located approximately 60 kilometres east of Prince Albert, Saskatchewan, a major supply centre for Northern Saskatchewan. A paved highway, gravel road grid system, and an extensive network of forestry roads provide excellent year round access to Shore’s property. The Star Kimberlite is situated in a burned portion of the Fort a la Corne forest, 2 kilometres north of the Saskatchewan River and 21kilometres to the west of a 25 Kilovolt power line.

The project area consists of 45 contiguous mineral dispositions totaling 9,808 hectares and is 100% owned by Shore. The Company holds 395 claims covering 219,196 hectares.

Fort a la Corne

The Fort a la Corne area of Saskatchewan hosts one of the most extensive kimberlite fields in the world. Over 70 kimberlites exist in the Fort a la Corne province and over 70 percent of these have been shown to contain diamonds. The deposition and erosional history at Fort a la Corne is such that the crater portions of the volcanic eruptive events have been preserved and not scraped away by glaciation, as is the case with most kimberlites. As a result, the crater portion of the kimberlite has significant geographic extent. The Star kimberlite averages 88 meters in thickness and covers an area over four square kilometres. The kimberlite is covered by 90 meters of overburden, consisting mostly of sand, mudstone and glacial till. Shore was the first company in the Fort a la Corne district to locate a root zone beneath the kimberlite crater when drill hole Star 20 intersected 539 metres of continuous kimberlite. This is the longest intersection of continuous kimberlite from a vertical drill hole ever reported in North America.

Previous Exploration

After acquiring the key claims in late 1995, Shore completed an airborne geophysical survey in the Spring of 1996 and followed up several magnetic anomalies with a ground magnetic survey. In the fall of 1996 three NQ (48mm diameter) core holes were drilled in an anomaly now known as the Star Kimberlite. These holes were followed up and confirmed by the results from two PQ (85mm diameter) core holes drilled in 1997. Encouraged by these results, Shore has subsequently drilled an additional 29 NQ holes, one PQ hole and one large diameter (24") reverse circulation hole.

Bulk Sample Program

The several seasons of drilling indicated a reasonably homogeneous deposit of consistent diamond content that supported a bulk tonnage scenario. Interpretation of the results confirmed to Shore management that the true value of the deposit could only be determined from a large parcel (3000 carats) of diamonds recovered from a bulk sample. The ore value in a diamond mine is determined as a combination of carat values (US$/carat) and grade (carats/tonne). Once the diamond value is known, detailed drilling can be undertaken to evaluate an average diamond grade and thus develop a dollar value per tonne. A study of sampling methods quickly indicated that a large parcel of diamonds could be recovered most efficiently and cost effectively by way of an underground bulk sample.

Shore has recently completed a 70,000 tonne bulk sample as part of the advanced evaluation study. We have recovered 10,582.67 carats with an averaged modeled value of $170 per carat.

Advanced Evaluation

Shore Gold has completed it's $60 million advanced evaluation program that was scheduled for 2007. This was the largest work program outlined for any of the Fort a la Corne kimberlites to date. The aim of the advanced evaluation is to initially define a National Instrument 43-101 compliant mineral resource followed by a mineral reserve for the Star Kimberlite.

Advanced Evaluation Program Highlights

• Completed underground Bulk Sampling: 70,000 tonnes recovered
• Diamond recovery: 10,582.67 Carats
• Recovered: 49.50 & 22 Carat stones
• Decommissioned shaft

Core Drilling
• 271 holes: 63,967 metres

Large Diametre Drilling
• 80 LDD holes completed: 20,000 tonnes

Engineering studies

Also included in the advanced evaluation was an airborne laser survey for accurate topographic mapping of the site, kimberlite and country rock test work, three dimensional modeling, grade estimation, block model construction, mine and plant design and the preparation of an environmental impact assessment. The current time line is structured in such a way that Shore will be able to fast track the feasibility study immediately thereafter.