Shore Gold Reduces Budget, Staff

Shore Gold Inc. has approved a significantly reduced 2009 budget of $17.9 million, the company’s Senior Vice President Exploration and Development George H. Read announced Tuesday, citing “the current state of the world financial and diamond markets.”

The 2009 budget includes $2.5 million for the Star project, $1 million for Star West and $9.5 million for the Fort a la Corne Joint Venture (FALC-JV).

The budget enables the Canadian diamond exploration company to focus on the completion of the prefeasibility study and the delivery of a National Instrument 43-101 compliant reserve estimate for the Star Diamond Project during 2009, it said in a release.

According to the company, the reduced budget combined with Shore's current cash position and an agreement in principle for a credit facility against the company's investment in asset backed commercial paper (ABCP) will ensure Shore’s financial stability through 2010, when a production decision is anticipated.

“We are convinced that the 2009 budget enables us to make significant progress towards a production decision on Star while simultaneously estimating a resource on Orion South,” said Read.

“This approach unfortunately comes at the expense of a considerable reduction in the size of our staff,” he added.