Shore Gold shares drop as diamond mine deal falls through

Shore Gold (TSX:SGF) shares fell dramatically Thursday after the Saskatoon-based company announced it had failed to secure a deal to fund their Star-Orion South diamond project near Prince Albert.

According to a company's news release, Shore Gold was unable to get financing “due to world economic uncertainties”

In an effort to save money, the company has laid off a few executives such as Duane D. DeRosier, vice-president administration, and Eric Cline vice-president corporate affairs, who will finish their duties March 31. Harvey J. Bay will step down as chief operating officer and will not continue to be employed full-time at Shore as principal under a management services agreement. Bay remains a member of the board of directors and will stay on as chief financial officer for Shore.

The company also cut the number of directors, from eight to five and seven out of 15 staff positions, most of which were technical jobs.

Shore said it has also postponed a SaskPower agreement for the design and construction of electrical power supply to the project site “until financing is secured and a production decision is made."