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access roads, drill pads, the Dense Media Separation (“DMS”) plant, operations area, office trailers, exploration camp and the test shaft.

An estimated cost of $831,435 to implement the activities outlined in the PDP and to address those recognized environmental liabilities was presented as a Preliminary Decommissioning Cost Estimate (“PDCE”). The PDP and PDCE were both reviewed and accepted by the Saskatchewan Ministry of Environment. At present, financial assurances to cover the 2007 PDCE for the Star Diamond Project have been posted as irrevocable standby letters of credit. Shore and the other members of the FALC-JV have used a similar process to develop and arrive at a PDCE for the FALC-JV portion of the Star Kimberlite. Financial assurances to cover the FALC-JV have also been posted with the Government of Saskatchewan.

Environmental Considerations

The regulatory framework for the normal construction and operation of any exploration or mine site is subject to an ongoing process during which permits, licences and approvals are requested, issued, amended, expired and renewed. This process occurs before and after the acceptance of the Environmental Impact Assessment. In addition, the environmental regulatory obligations will evolve as the project develops.

The primary regulatory authority over the Star Diamond Project currently resides with the Government of Saskatchewan. However, there are a number of Federal departments which are considered to have jurisdiction over some aspects of the operation. In those situations where there is Federal involvement there is also coordination between the Federal and Provincial regulatory agencies (e.g. Human Resources Development Canada and Saskatchewan Labour), but each agency will retain its own responsibility for administering its own approvals, licences and permits where required. The main regulatory agencies that issue permits/approvals and inspect these operations are the Saskatchewan Ministry of Environment and, in instances where there is underground sampling, the Mine Safety Unit of the Saskatchewan Ministry of Advanced Education, Employment and Labour.

Current Status

Currently, the project is conducted in accordance with the terms and conditions contained within the surface exploration permit and other permits that are required for its activities. Shore has received the permits and approvals it needs to operate and conduct the associated advanced exploration activities. Shore permits and their associated expiry dates that are related to the Star Diamond Project are:

  • Surface Exploration Permit (# SEP-2009-03) – March 31, 2009;

  • Approval to Operate Pollutant Control Facilities (# IO-235) – July 31, 2011;

  • Aquatic Habitat Protection Permit – March 31, 2009;

  • Forest Products Permit (# 1558G) – March 31, 2009;

  • Surface Exploration Permit (# SEP-2009-03) – March 31, 2009;

  • Temporary Work Camp Permit (# SG-TWCP-01-2009) – March 31, 2009; and

  • Approval to Operate Water Works (Saskatchewan Watershed Authority) (Permit

numbers E3/3733 and E3/3791) – June 30, 2009.

P&E Mining Consultants Inc. NI 43-101 Technical Report No 159 Shore Gold Inc. - Star Diamond Project Resource Estimate Update

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