By Andrew de Souza

Climbing diamond prices good for Shore Gold

Aug 6, 2011 | 11:39 AM

Diamond prices have been climbing, and that means better prices for the rough diamonds that could

be coming out of the proposed Shore Gold diamond project.

Since February, diamond prices have increased and the company is updating its valuations to better reflect those world-wide changes.

According to the company, the increases means some of the large stones the company has already pulled out of the ground as part of their feasibility study have increased between 31 and 46 per cent in value.

Senior vice president of exploration and development George Reed said that the added price is good news for the project coming together. He said he hopes it’ll help attract more investors to the $1.9 billion-project.

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“The project is particularly sensitive to diamond prices, diamond grade and exchange rates,” he said.

“Diamond prices have performed remarkably well this year.”

Reed said high prices could help the company not only live out its expected 20-year life cycle, but also stay in the area to explore the other diamond deposits.

“We all know that there’s many other kimberlites in the Fort a la Corne Forest, many of which have been shown to contain diamonds and will be evaluated as (current) projects get under way,” he said.

While diamond prices are high generally, its particularly good news for Shore Gold because of the quality of stones expected from the project.

Based on the updated model, a large stone of 11.96 carats, recently procured by the company has increased in value to $215,190, an increase of more than $30,000 since February.

The updated valuation is available here.

Currently, the mine is awaiting approval of its recently-submitted environmental assessment study.

adesouza@panow.com