By Ragnar Haagen

paNOW Staff

Submitted on March 2, 2012 - 6:40am

Following news that Shore Gold will be cutting a third of its staff by the end of the month, local diamond cutter Mike Botha says there is no need to be concerned for the company or its projects.

“We have to remember that this is an absolutely huge project,” said Botha, CEO with Embee Diamond Technologies.

“It’s the largest diamond project in the world, so we have to be patient and the market has to be patient because this thing will happen and we just have to give it time.”

Shore Gold is a Saskatoon-based junior mining company whose primary asset is the Star Diamond project, 60 km east of Prince Albert. The project is situated in the Fort a la Corne area of Saskatchewan and is believed to hold one of the largest kimberlite fields in the world.

Botha says in this situation, it doesn’t matter that the company is cutting cost, and still searching for a substantial portion of the estimated $2-billion dollars needed for startup costs; the value in the ground is still the same.

“We can look forward to the mine coming to production and not only will it be the largest mine, but it will also be one of the mines that is producing the largest diamonds in the world,” he said.

And Botha should know what he’s talking about. He has been in the diamond business for 45 years and has been exposed to all sectors of the industry.

He calls it a ‘prudent business decision’ by Shore Gold as they wait for financing to come into place.
The company released an update on Wednesday that detailed the cost-cutting measures that Shore

Gold has undergone and it also touched on the state of finances and how the company had reached an advanced stage of negotiations in late August 2011 before the deal could be completed.

“I think what basically happened was because of the unstable situation in Europe and particularly in Greece… I think that just kind of put a damper on the thing,” said Botha.

“People are cautious you know, they don’t want to venture into something big and then the whole economy world-wide gets affected by a few countries dragging the whole economy down.”

A spokesperson for Shore Gold has confirmed that the company has about $17-million dollars in cash reserves which gives them a two year window to secure financing for the project.

To see previous story on Shore Gold and its recent cutbacks click here.

rhaagen@panow.com

http://www.panow.com/node/188533