Shoreham Resources
President’s Message – Jan 2009
In many ways, 2008 proved to be a difficult year for the junior mining sector. A sharp correction in the prices for most metals occurred along with a worldwide credit crisis and the resulting flight of speculative capital. These factors combined to create a very challenging environment for small companies engaged in exploration and development of mineral projects. Access to funding is essential for the early stage work that is required to build shareholder value and the sudden constriction of capital during the year has prompted a change in the strategy that we must pursue to develop our company. Our overall mission for the company however remains unchanged. We remain committed to the acquisition of highly prospective properties, to evaluation programs to demonstrate the value of these projects, to attract partner companies for development, and to enhancement of the value of our core projects in preparation for their profitable development. In this challenging market, we have thrived though innovation. It is my pleasure as President of Shoreham Resources to update our shareholders on the accomplishments of 2008 and the objectives we have set for 2009.
We began 2008 with active programs in both Ontario and Guyana. We planned ground geophysics, technical evaluations and systematic drilling in the Setting Net Lake Molybdenite prospect and the Borland Lake Silver target and were proceeding through our phase I program at Marudi Mountain in Guyana. Changes in the market and the political environment in Ontario caused us to defer the Canadian Projects and emphasize on the high quality gold targets we hold and are still acquiring in Guyana.
Guyana is a highly prospective, stable, democratic country in which modern mining developments are limited and our ability to recognize and acquire high quality gold prospects makes us very competitive. Our management team has been active in this region since 1992 and we have a strong locally based operating group in Guyana. We are known, respected and supported by the Guyanese administration and are well organized to drive our program there.
While Marudi remains our flagship, we have been encouraged by access to and our ability to evaluate new high quality prospects which offer both vehicles for growth and a currency for raising money through strategic option transactions. Our first such transaction was the Black Banana Project, a high grade gold prospect recently acquired in September. We have also been reviewing numerous other opportunities and will seek to close additional acquisitions to add funds to our treasury and value to our asset base. In the prevailing down market for junior mining equities, we have developed strategies for financing and growth which will add value our company without the excessive dilution which would be suffered by traditional financing methods.
Another successful season of fieldwork was reported at our Marudi Mountain Project. A drilling program using the light, portable TRADO drill rig has followed up on numerous geophysical and soil sampling targets, along with extensive trenching and sampling, to outline entirely new zones of continuous strong gold values. We have also been working to improve the access and infrastructure with the construction of roads, a mining camp, and an airstrip. We were pleased to announce a joint-venture deal with the private company Rexma Participations, with the objective of processing alluvial material for gold and diamonds. This arrangement is scheduled to commence in 2009 and we anticipate a revenue stream as a result of their operations.
The strong discovery potential for gold at the new Black Banana Project enabled a joint-venture deal with a third party company to fund exploration work as part of their earn-in commitment. As part of this deal, a transaction was completed to contribute financing to Shoreham Resources through a private placement issued at significantly above the market value of our stock. This is exactly the kind of creative approach that will allow our company to remain active and yet ensure that our share capital structure does not become overly diluted until conditions within our sector improve.
In Ontario we control a suite of attractive projects that we also believe have strong potential. In order to provide the funding necessary to keep our ownership interests in good standing we were able to complete a flow through financing in December, again at an offering price that was significantly above market. We continue to evaluate the merits of each property in the overall market conditions and review offers from other companies. This prompted us to accept an offer to vend the Sachigo Lake project, which we deemed to be non-core for our exploration objectives, in exchange for cash and shares in a transaction that we consider to be beneficial for Macdonald Mines, Escape Gold and our company. We will remain open to consider other transactions to acquire or vend property assets such that they are able to create value for our shareholders.
We are very excited about the year ahead and have set very high expectations for our core operating area in Guyana. We recognize a tremendous opportunity to define new deposit areas of oxidized gold mineralized material at Marudi Mountain. When our infrastructure improvement program, which will be supported by the REXMA development program, is completed our operations will be more cost effective. We anticipate REXMA, the alluvial operator, will begin recovery operations in the second semester of 2009, and thereby generate royalty payments that we plan to deploy in support of our development work. We also look forward to the commencement of exploration work at the Black Banana Property as underwritten by the funding commitment of our JV partner for that project. And we will continue to investigate new acquisition opportunities that are presented to us during the year.
Our strengths as a company come from our dedication to move ahead with our initiatives even when the economic conditions are challenging. We have responded quickly to changes in the market and developed creative solutions for survival and growth. These developments will serve us well as the market improves, a focus on gold attracts investor interest, and our aggressive, nimble growth program distinguishes us from companies whose business plans focus on conserving capital through inactivity.
On behalf of the entire management team and Board of Directors for Shoreham Resources, I wish to thank our shareholders for their confidence in our efforts, and encourage them to share our vision for success in this New Year.
Sincerely,
David Bending, PGeo.
President & CEO
