Shore Gold’s new diamond plan
At Shore Gold’s AGM they presented some details of the revised plan for their FALC diamond project. The AGM’s presentation provides greater detail to the story below.
Diamond & Specialty Minerals Summary for June 16, 2016
2016-06-16 21:28 ET – Market Summary
by Will Purcell
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Ken MacNeill and George Read’s Shore Gold Inc.(SGF), up one-half cent to 18.5 cents on 137,000 shares, is touting a new mine plan for its Star-Orion South project in central Saskatchewan that could significantly cut the $2-billion price tag for its proposed mine. The details will not be clear until the company updates its feasibility study late this year. Nevertheless, Mr. Read, Shore’s vice-president of exploration, revealed key parts of his plan at the company’s annual general meeting on Monday.
The first change involves prestripping overburden from the massive pit the company will need to access the higher-grade kimberlite, which is between 100 and 150 metres deep at Star and Orion South. The company proposes using 105-tonne D11 Caterpillar bulldozers, with a blade seven feet high and 21 feet wide. (If the D11s do not quite do the job for Shore, there is always the biggest bulldozer made, which is the 142-tonne Komatsu D575A, with a blade 11 feet high and 24 feet wide.) Shore, with its D11s, will push the unconsolidated sand and gravel atop the massive pipes into portable hoppers feeding a central conveyor belt that would deliver the material to surface. The company would then use an in-pit crushing and conveying system to similarly transport the deeper (and harder) till material to the surface. Shore believes the new method can significantly cut the sand and clay stripping costs.
Shore’s second change involves its mining plan, which it has examined in detail seeking ways to cut the time needed to start producing diamonds. Several pit optimizations later — optimism is never in short supply with the indefatigable Mr. Read — the company thinks it can start processing kimberlite earlier on in the plan by using starter pits, not just one massive dig. While this is unlikely to have a major impact on the eventual capital cost, it would accelerate access to revenue by about a year, and it would defer some of the stripping costs by perhaps a few years, improving the economics of the project. One of the biggest switches under consideration according to Mr. Read is starting the mine at Orion South rather than Star, although to do so, Shore would undoubtedly want to boost its interest in the former pipe beyond the current 71 per cent.
The third change is what Shore calls its “completely revised” proposed diamond processing plant. The company says investigations are currently under way to use Steinert X-ray sorting equipment to aid the recovery of all sizes of diamonds. The company believes this will be cheaper, and also more efficient in that it could recover large diamonds without breakage. Shore has put together a mill sample of its Early Joli Fou kimberlite that it will ship to the Germany-based Steinert for testing this summer.
Shore hopes to pare several hundred million dollars off its capital cost estimates in the upcoming revised feasibility study. Mr. Read says Shore “would like to get down to $1-billion,” but quickly added “whether we can or not, I don’t know.” Even if the company comes close — and if potential backers, partners and bankers have more confidence in the new numbers than they had in the old — then Shore has a shot at getting its long-stalled project back on track.