Kensington Resources Ltd.
TSX VENTURE : KRT

Kensington Resources Ltd.
Shore Gold Inc.
TSX VENTURE : SGF

Shore Gold Inc.

October 28, 2005 18:55 ET

Shore Gold Inc. and Kensington Resources Ltd. Complete Merger

SASKATOON, SASKATCHEWAN and VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 28, 2005) - Shore Gold Inc. (TSX:SGF) ("Shore") and Kensington Resources Ltd. (TSX VENTURE:KRT) ("Kensington") announced today that they have completed the merger transaction announced on August 15, 2005. The merger was completed by a plan of arrangement which was approved by the securityholders of Kensington on October 21, 2005 and was approved by the Supreme Court of the Yukon Territory earlier today.

"Our goal has always been to create long term value for all stakeholders involved and we believe this transaction will allow us to maximize that potential. With the merger complete, our efforts are clearly focused on realizing the significant growth potential of the world's largest diamond bearing kimberlite field," said Kenneth E. MacNeill, President and CEO of Shore Gold Inc.

"I wish to congratulate all of Kensington Resources' securityholders who will now enjoy increased value by participating in the development of the world's largest diamond bearing kimberlite field at Fort a la Corne," said Robert A. McCallum, former President and CEO of Kensington and who today becomes a director of Shore. "Shore Gold now holds the largest interest in this field. Through Shore Gold, our securityholders will enjoy a premium opportunity in the timely realization of the vast potential of the Fort a la Corne diamond field."

Pursuant to the plan of arrangement, Kensington amalgamated with a wholly-owned subsidiary of Shore and all of the issued and outstanding common shares of Kensington were transferred to Shore in consideration for the issuance by Shore of 0.64 of a common share of Shore for each Kensington share. All of the outstanding options to acquire common shares of Kensington were transferred to Shore and the former holders thereof received options to purchase common shares of Shore under Shore's stock option plan. Likewise, each outstanding warrant to acquire common shares of Kensington was transferred to Shore and the former holder thereof was issued warrants of Shore in exchange therefor. All outstanding broker warrants of Kensington, in accordance with their terms, now entitle their holders to purchase securities of Shore.

Pursuant to the plan of arrangement, Shore issued an aggregate of approximately 51,706,786 common shares to the former shareholders of Kensington and reserved an additional 7,175,346 common shares for issuance pursuant to options, warrants and broker warrants held by the former securityholders of Kensington. Upon completion of the transaction, Shore has a total of approximately 152,657,604 issued and outstanding common shares.

Three former directors of Kensington were appointed to the board of directors of Shore effective at the closing of the plan of arrangement. The eight member board of directors of Shore is now comprised of five continuing Shore directors (Kenneth MacNeill, Arnie Hillier, Neil McMillan, Ronald Walker and Harvey Bay) and three former directors of Kensington (James R. Rothwell, Robert McCallum and William Stanley).

The common shares of Shore issued to the former shareholders of Kensington will commence trading on the Toronto Stock Exchange on Monday, October 31, 2005. The warrants of Shore issued to the former warrantholders of Kensington will be listed and posted for trading on the Toronto Stock Exchange at the opening on or about Wednesday, November 2, 2005 at which time they will be delisted from the TSX Venture Exchange.

Shore is a Canadian based corporation engaged in the acquisition, exploration and development of mineral properties. Shares of Shore trade on the Toronto Stock Exchange under the trading symbol "SGF".

Forward-Looking Statements

The information in this news release contains certain forward-looking statements that involve substantial known and unknown risks and uncertainties, which are beyond Shore's control including the impact of general economic conditions and the price of diamonds. Shore's actual results and performance could differ materially from those expressed in, or implied by, such forward-looking statements and, accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur or if any of them do, what benefits Shore will derive from them.

Neither the Toronto Stock Exchange nor the TSX Venture Exchange have reviewed or accept responsibility for the adequacy or accuracy of this news release.

Contact Information

  • Shore Gold Inc.
    Kennett E. McNeill
    President and CEO
    (306) 664-2202
    or
    Shore Gold Inc.
    Wade MacBain
    Investor Relations
    (306) 664-2202