SHORE GOLD INC.
April 2009
Pieter Du Plessis
Vice President Exploration
B.Sc, Hons. B.Sc & M.Sc.
Page
1.
Safe Harbour Statement
3
2.
Location map of Star and Orion Kimberlites in Fort a la Corne (FALC)
4
3.
Objective
5
4.
LDD
6
5.
LDD diamond loss
7, 8
6.
Star Kimberlite Inner Area
9
7.
Star Kimberlite EJF Geology
10
8.
Star Kimberlite EJF SUGS
11
9.
Star Kimberlite UG EJF MSS
12
10.
Star Kimberlite LDD EJF MSS
13
11.
Star Kimberlite volcanic cinder cone
14
12.
Star Kimberlite Inner Area : Map
15
13.
Star Kimberlite Inner Area :Grade adjustment factors
16
14.
Star Kimberlite Inner Area: Diamond curves
17
15.
Star Kimberlite Inner Area: Radius of 100m around shaft
18
16.
Star Kimberlite Inner Area: Independent confirmation
19
17.
Star Kimberlite Inner Area: Tonnage method
20, 21
18.
LDD effect on diamond price
22
19.
The resource estimation process
23
20.
Star Kimberlite Inner Area impact on resource estimation
24
21.
Star Kimberlite NI43‐101 resource classification
25
22.
Star Kimberlite NI43‐101 resource estimate
26, 27
23.
Conclusion
28
2
Certain statements contained in this presentation constitute forward‐looking statements. These statements relate to future events or the Corporation's future performance, business prospects or opportunities. All statements other than statements of historical fact may be forward‐looking statements. Forward‐looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect, "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward‐looking statements. The Corporation believes that the expectations reflected in those forward‐looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward‐looking statements should not be unduly relied upon. These statements speak only as of the date specified. The Corporation does not intend, and does not assume any obligation, to update these forward‐looking statements unless required to do so pursuant to applicable securities legislation. These forward‐looking statements involve risks and uncertainties relating to, among other things, results of exploration activities, the Corporation's limited experience with development‐stage mining operations, uninsured risks, regulatory changes, defects in title, availability of materials and equipment, timeliness of government approvals, changes in commodity and particularly diamond prices, actual performance of facilities, equipment and processes relative to specifications and expectations and unanticipated environmental impacts on operations. Additional factors that could cause actual results to differ materially include, but are not limited to, the risk factors described in the Corporation’s Annual Information Form dated March 25, 2008. The Corporation cautions that the foregoing list of factors that may affect future results is not exhaustive. Actual results may differ materially from those expressed or implied by such forward‐looking statements. References to carats, rock value and diamond price set out in this presentation are based upon the Resource Estimate announced by the Company for the Star Kimberlite, and, for other kimberlites, are estimated based on potential tonnage, average bulk sample grades and modeled diamond prices from the bulk sample. Unless contained in an NI 43‐101 compliant Resource Estimate, all figures are conceptual in nature and should not be unduly relied upon because they are based on preliminary exploration results. All figures contained herein could be affected by the risks and uncertainties referred to above. 3
4
To demonstrate how factors are derived for Large Diameter Drilling (LDD) to account for diamond loss and breakage. Diamond loss and breakage lead to underestimation of diamond grade and price from LDD, thereby requiring adjustment factors to equate them to the more representative grades and prices determined from underground (UG) bulk sampling from the same geology. The LDD adjustment factors are key drivers for the Mineral Resource estimates of the Fort a la Corne (FALC) kimberlites.
5
1.
2.
3.
1.
2.
3.
BENEFITS:
LDD is required to recover macrodiamonds in a 3‐D manner across the kimberlite deposit for a Mineral Resource and Mineral Reserve Estimate.
LDD is cost effective and practical compared to underground bulk sampling, e.g. the 1.2m diameter LDD cost $1,200/m versus a 5m diameter shaft that cost $60,000/m.
LDD is time effective compared to shaft sinking, e.g. the 1.2m diameter LDD penetrates the rock at 1m/hour versus 0.03m/hour for a 5m diameter shaft. With 5m diameter shafts at every LDD location, it would have taken 100 years to do the 88 LDD equivalent program that was completed on the Star Kimberlite in 3 years.
DRAWBACKS:
LDD results in the kimberlite being ground up into fine grained particles by the steel drill bit teeth. The harder the kimberlite, the finer the rock is ground. It is well known in the diamond industry that this results in diamond damage, breakage and loss. The harder the rock, the more the brittle diamonds are damaged and lost to the sample, because the ‐1mm fine grained particles are screened out at the drill rig and not processed in the on‐site plant. In contrast, with the underground (UG) samples, large blocks of kimberlite are excavated and the full sample is processed in the plant.
Generally, the larger the diamonds, the higher the sample grade and diamond price. In LDD, larger diamonds are more broken than smaller diamonds. The destruction of the bigger diamonds disproportionately affects the grade and price of the LDD diamonds in a negative fashion, due to the significant effect of large diamonds on the grade and price. In contrast, with the UG samples, diamond damage is limited during excavation, due to the diamonds being protected from impact by large blocks of surrounding kimberlite and as a result more large diamonds are recovered in a similar size UG vs. LDD sample.
Unconsolidated overburden falling into the drill holes also results in a dilution to the grade from LDD samples, however no techniques are currently available to accurately quantify the magnitude that this 6
dilution contributes to the calculated grade. With UG samples, no overburden dilution occurs.
Diamonds are hard but brittle. The higher the energy of steel hitting a diamond and the harder the kimberlite, the greater the percentage of broken and lost diamonds, e.g. test work by Metso Minerals on diamond liberation and breakage showed that at an energy of 5.6 Nm (J), 33% of a 6mm diamond (0.7‐2Ct) is broken to sub 1mm particles and would therefore not be recovered in the LDD sample. The adjacent graph also demonstrates how bigger diamonds are subject to more breakage than smaller diamonds. Bauer calculated that the LDD drill bit hits the rock with 5,000 Nm of torque. This is equivalent to dropping 500 Kg of steel from a one metre
height directly on the kimberlite or diamond that protrudes out of the rock. Diamond simulant tests in the FALC LDD confirmed significant damage.
Herbst, J.A., Popatov, A., Hambidge, G., Rademan, J., 2008. Modeling of diamond liberation and damage for Debswana kimberlitic ores. Elsevier, Minerals Engineering 21, 766‐769.
Broken diamond simulants
7
Underground Bulk Sample:
On‐site kimberlite processing data shows equalization of the smaller (+1 ‐3mm particle size fraction) and the larger (+6mm particle size fraction) DMS yields (concentrate of heavy minerals and diamonds) for EJF kimberlite.
LDD Mini‐Bulk Sample:
In contrast, onsite kimberlite processing data shows LDD produced high DMS yields in the smaller (+1 ‐3mm particle size fraction) and very low DMS yields in the larger (+6mm) particle size fraction for EJF. The same excess fine DMS yield in LDD compared to UG samples were observed in several kimberlite types as shown in graphs.
Conclusion: Increased fine grinding of kimberlite concentrate in LDD compared to UG sample.
UG
LDD
8
Analysis of kimberlite evaluation data shows that the Star Kimberlite EJF can be subdivided into an Inner (vent proximal) and Outer (vent distal) Area. Data used to define the Star EJF Inner Area:
1. The geology of the EJF kimberlite as defined by core drilling, quantitative core logging, isotope dating, UG drift mapping, geochemistry, petrography and downhole geophysical logging.
2. Sub Unit Grain Size (SUGS) of the EJF kimberlite. The SUGS is a quantitative measure of the coarseness of the kimberlite grain size. The coarser the kimberlite, the larger the diamonds contained and the higher the grade.
3. Mean Stone Size (MSS) and diamond size frequency distribution from the UG EJF bulk sampling. The UG sampling is representative of the Inner Area.
4. MSS and diamond size frequency distribution from the EJF LDD mini bulk sampling.
5. The morphology (shape) of the EJF kimberlite, particularly the influence of the volcanic cinder cone on the diamond distribution in the deposit.
EJF GEOLOGY
VOLCANIC CINDER CONE
EJF
SUGS
STAR EJF INNER AREA
LDD UG
EJF
EJF
MSS
MSS
9
FALC Kimberlite
Other known Kimberlite
Star and FALC kimberlites are different from other known kimberlite pipes in Canada, Southern Africa and Russia, due to their depositional environment: A marine depositional environment existed in FALC approximately 100 million years ago during the EJF kimberlite
volcanic eruption. The volcanic eruption in a marine environment resulted in the EJF diamonds undergoing extensive sorting due to the influence of water, with large stones in the coarse grained kimberlite and small stones in the fine grained kimberlite. Other known kimberlite pipes show very limited sorting and only on local scales.
The Star and FALC kimberlites erupted through soft, water logged, unconsolidated sediments that resulted in large excavations in the marine sediments and footprints of the kimberlite. Other known kimberlite pipes mostly erupted through hard consolidated country rock, resulting in small footprints.
Rising sea‐level sediment deposition after eruption of the EJF resulted in the full preservation of the pyroclastic flows and the cinder cone. Conventional kimberlite pipes are eroded and usually no cinder cones are preserved. 10
PATTERN CORE DRILLING
MEASURED CORE LOGGING
EJF
KIMBERLITE
EJF SUGS
GEOLOGY
11
REPRESENTATIVE
UNDERGROUND
BULK SAMPLING
DIAMOND
SIEVING
EJF
KIMBERLITE
UG EJF MSS
GEOLOGY
12
PATTERN
LDD
LDD DIAMOND SIEVING
EJF
KIMBERLITE
LDD EJF MSS
GEOLOGY
13
Star EJF Elevation data showing volcanic cinder cone y 134
Crater
MJF
Cinder Cone
Eruption in marine environment caused sorting of diamonds: larger stones (higher grade) in coarse units, smaller stones in fine units. Preservation of cinder cone due to sea level rise affected diamond distribution in EJF: Larger stones (higher grade) in cinder cone and smaller stones (lower grade) outside of cinder cone.
14
15
DIAMOND CURVES
RADIUS OF 100M AROUND SHAFT
TONNAGE METHOD
INDEPENDENT CONFIRMATION
16
DIAMOND CURVES
RADIUS OF 100M AROUND SHAFT
TONNAGE METHOD
INDEPENDENT CONFIRMATION
STAR KIMBERLITE EJF UG BULK AND LDD SAMPLE RESULTS FOR INNER AREA 100.00
FACTOR:
1.62
Diamond curve factor conservative: model underestimates large stones’ effect on grade
Spht ui
10.00
1.00
0.10
0.01
Average size: Cts/Stn
0.01
Spht ui = Stones per hundred tonne per unit interval
0.10
Inner_EJF_LDD
1.00
UG_EJF
17
DIAMOND CURVES
RADIUS OF 100M AROUND SHAFT
TONNAGE METHOD
INDEPENDENT CONFIRMATION
FACTOR:
1.67
18
DIAMOND CURVES
RADIUS OF 100M AROUND SHAFT
TONNAGE METHOD
INDEPENDENT CONFIRMATION
Fred Brown (M.Sc (Eng)) of P&E Mining Consultants used the same raw data, split by Inner and Outer Area for the Star Kimberlite, and analyzed the diamond data with a size fraction method. Fred Brown independently determined a grade adjustment factor for the EJF LDD of 1.62. In the EJF Inner Area, LDD sampling produced an average grade in the +4.75 mm size fraction of 1.81 cpht, compared to the UG average of 4.98 cpht, indicating that larger stones are being preferentially lost during drilling.
Size fraction diamond grade ratios for the EJF Inner Area. Grade (cpht) FACTOR:
1.62
Ratio Size Fraction UG RE LDD UG/LDD RE/LDD UG/RE +4.75
4.98
4.77
1.81
2.75
2.64
1.04
‐4.75 +1.70
9.8
9.07
6.05
1.62
1.5
1.08
‐1.70
2.76
2.09
2.12
1.3
0.99
1.32
Fred Brown is an independent Qualified Person (QP) with +21 years of diamond mining and Mineral Resource estimation experience.
Diamond curve factor conservative: model underestimates large stones’ effect on grade
19
DIAMOND CURVES
RADIUS OF 100M AROUND SHAFT
TONNAGE METHOD
INDEPENDENT CONFIRMATION
100 Tonnes of Processed UG EJF Kimberlite
Underground Bulk Samples vs LDD Samples in Star & OS EJF
100 Tonnes of Theoretical
LDD EJF Kimberlite
Theoretical tonnes
calculated using hole caliper and core density.
100 Tonnes of Processed
LDD EJF Kimberlite
Processed tonnes actually measured in diamond processing plant.
20
Processed EJF Tonnes vs Theoretical Tonnes
TONNAGE METHOD
RADIUS OF 100M AROUND SHAFT
INDEPENDENT CONFIRMATION
FACTOR:
1.70
Processed INNER LDD EJF Tonnes
DIAMOND CURVES
250
y = 0.5804x + 1.2389
R² = 0.9311
200
150
milled tonnes
100
Linear (milled tonnes)
50
0
0
100
200
300
400
Calculated Theoretical INNER LDD EJF Tonnes
Theoretical tonnage is misleading due to destruction of diamonds by LDD that results in large proportion of diamonds ending up in the ‐1mm size fraction (not recovered). Overburden dilution, which is difficult to quantify, further adds to inaccuracies with the theoretical tonnage. Processed tonnage, measured by plant weightometer, is a more reliable measure of the kimberlite from which diamonds are recovered with the LDD.
CALCULATED EJF TONNES PROCESSED EJF TONNES TOTAL CARATS TOTAL STONES THEORETICAL GRADE (CPHT) PROCESSED GRADE (CPHT) INNER EJF LDD FACTOR
8928.42
5261.00
955.10
9891
10.70
18.15
1.70
USING THE TONNAGE METHOD: AVERAGE EJF GRADE IN INNER AREA =18 CPHT; 21
COMPARES FAVOURABLY WITH UG BULK SAMPLE GRADE OF 17.5 CPHT
FACTOR:
1.65
Star Kimberlite LDD diamond prices are compared to bulk sample prices for diamonds smaller than 0.21 carats / stone. This size range provides valid statistics for comparison. This illustrates that the LDD not only underestimates the grade, but also the diamond price by a factor of approximately 1.7.
Sample
Stones
Carats $/Ct Price Factor
UG
43,807
2,700.68
LDD
1,248
120.54
1.65
22
Report
Estimate
Analyse
Set‐up
Once the LDD adjustment factors have been determined, the Mineral Resource estimation can be completed. Check
data integrity
Geological
interpretation
and modelling
Domain definition
and verification
Choose a
block size
Understand anticipated
or current
mining selectivity
Data analysis
‐statistical
Code
block model
Set up
density model
Data analysis
‐variography
Composite data
Select estimation
technique
Estimate
and validate
Classify
and report
23
For each lithology, the geology and kimberlite density data from core drilling is used for modelling the resource tonnages, LDD is used for the global 3‐D grade estimation and the UG diamond size distribution, shapes and colour for the diamond price. The resource tonnages are further constrained by a potential economic pit shell that take pit slopes, mining, processing and general and administration costs into account, and only the tonnages above the potential economic cut‐off are reported as the Mineral Resource. The figure below shows the Star Kimberlite Inner Area in relation to the potential open pit. OPEN PIT CONSTRAINT
LDD
INNER AREA:
Used for Resource
estimation
24
Once the Mineral Resource has been estimated, the resource for each lithology is classified into NI43‐101 compliant Indicated Resources and Inferred Resources based on distance criteria established from the variography. Indicated Resources are shown in green and Inferred Resources in red in the figure below.
OPEN PIT CONSTRAINT
LDD
RESOURCE CLASSIFICATION CRITERIA:
Indicated (Green): 170m and two drill holes
Inferred (Red): 340m and one drill hole
25
Initial Star Kimberlite Mineral Resource
Updated Star Kimberlite Mineral Resource
AMEC
Americas
P&E Mining
Consultants
Total in Pit
Total in Pit
Indicated
Inferred
Lithology
Tonnes
Above
Cut-off
(kt)
Cantuar
10,500
13
1,402
EJF
90,200
15
EJF
0
Pense
Indicated
Inferred
Grade
(cpht)
Carats
(000's)
Lithology
Tonnes
Above
Cut-off
(kt)
2,800
13
373
Cantuar
11,507
15
1,729
426
8
33
13,452
24,600
13
3,167
EJF (Inner Area)
80,516
17
13,362
2,672
16
424
0.0
0
0
0
0
EJF (Outer Area)
32,120
10
3,106
19,857
11
2,158
6,300
14
858
2,800
15
409
Pense
8,002
16
1,251
3,178
14
445
MJF
15,700
6
948
100
5
5
MJF
18,617
5
1,009
1
5
0.05
LJF
Total
0
4
0
0
4
0
LJF
Total
896
4
36
30
4
1.07
151,658
14
20,493
26,164
12
3,061
122,700
Tonnes
Above
Grade
Cut-off
(cpht) Carats (000's)
(kt)
14
16,660
30,300
13
3,954
(1) Mineral resources are accumulated within an optimized floating‐cone pit shell.
(2) Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources
may be materially affected by environmental, permitting, legal, title, taxation, socio‐political, marketing, or other relevant issues.
(3) The quantity and grade of reported inferred resources in this estimate are conceptual in nature. There is no guarantee that all or any
part of the mineral resource will be converted into a mineral reserve.
(4) 1mm bottom cut off assumed.
(5) WWW High scenario.
(6) Numbers in the tables are affected by rounding.
Grade
(cpht)
Carats
(000's)
Tonnes
Above
Cut-off
(kt)
Grade
(cpht)
Carats
(000's)
Additional 10% LDD and Geology taken into account with the Mineral Resource (Indicated & Inferred) update resulting in ~3 Million additional carats and ~25 Million additional tonnes.
26
LJF Kimberlite Block Model: Average Indicated Grade = 4 CPHT
Graphical 3‐D view of Star Grade Block Model with purple colour depicting higher grade
MJF Kimberlite Block Model: Average Indicated Grade = 5 CPHT
Inner
Outer
EJF Kimberlite Block Model: Average Indicated Grade = 17 & 10 CPHT (Inner & Outer Areas)
Pense Kimberlite Block Model: Average Indicated Grade = 16 CPHT
Cantuar Kimberlite Block Model: Average Indicated Grade = 15 CPHT
27
DIAMOND CURVES
RADIUS OF 100M AROUND SHAFT
TONNAGE METHOD
INDEPENDENT CONFIRMATION
Using four different approaches, the LDD grade adjustment factor for the EJF ranges from 1.62 to 1.7 in the Inner Area of the Star Kimberlite.
The Tonnage Method established in the Star Kimberlite compares favourably with the Star Kimberlite UG bulk sample and factors derived with different approaches in the Inner Area . Having established this Tonnage Method on the Star Kimberlite, it allows the use of the same method on other FALC kimberlites, where the same type of core drilling and LDD data exist. As a first step, an Inner Area must be defined for the kimberlite and then the Tonnage Method can be applied to that Inner Area to determine the LDD grade adjustment factor for that particular kimberlite. This method has positive time and cost implications for the evaluation of the FALC kimberlites in future.
28
y
Technical information prepared under the supervision of Senior Vice President Exploration and Development, George Read, Professional Geoscientist in the Provinces of Saskatchewan and British Columbia, as the Qualified Person responsible for the verification and quality assurance of analytical results for Shore Gold Inc. Resource estimate update completed by Fred Brown (M.Sc (Eng)), an independent QP from P&E Mining Consultants. For further information contact Pieter Du Plessis at Shore Gold Inc. (Tel. +1 306 664 2202)
29