Shore Gold Inc. recorded a net loss of $219.9 million or 98 cents per share for the fiscal year that ended on December 31. The company reported a loss of $26 million the previous year, Rapaport reported. Shore Gold registered impairment charges of certain previously capitalized exploration and evaluation assets of $208.4 million in 2011. The company sold some investments for $1.3 million during the year.
The decline in the company's share price during 2011 resulted in Shore Gold's market capitalization being substantially less than the carrying value of the net assets. Shore Gold held working capital of $15.9 million as of December 31.
During 2011, Shore Gold completed the National Instrument 43-101 compliant technical report documenting the feasibility study for the Star-Orion South Diamond Project. An updated valuation of diamond parcels from both the Star and Orion South kimberlites confirmed price increases of 31 percent to 46 percent.
Since the completion of the Star-Orion South feasibility study, Shore Gold has been actively pursuing various options for the financing of the project. Recently, one of these options reached an advanced stage of negotiation but was not concluded due to global economic uncertainties, according to the company.
The management and directors of Shore Gold deemed it necessary to make changes to staff and leadership to meet current corporate priorities. These measures will enable the completion of project environmental approval while continuing pursue financing. Measures include the reduction in the number of company directors, officers and personnel as well as postponement of all arrangements with SaskPower for the design and construction of electrical power supply to the project.
Shore Gold believes that those measures will enable the company to conserve its present cash position and provide an extended operating window in which it can complete the environmental approval and project permitting and continue to seek opportunities for development capital through participation by a third party or a syndicate of investors.
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