STAR-ORION SOUTH DIAMOND PROJECT: SHORE SIGNS MOU FOR NO-COST SITE WASTE TIMBER REMOVAL FOR ETHANOL PRODUCTION

SASKATOON, June 21, 2011 /CNW/ --
Stock Symbol: SGF: TSX

SASKATOON, June 21, 2011 /CNW/ - Eric Cline, Vice President Corporate
Affairs of Shore Gold Inc. ('Shore' or the 'company') is pleased to
announce the signing today of a Memorandum of Understanding ('MoU')
with Nipawin Biomass Ethanol New Generation Co-operative Ltd. ('Nipawin
Biomass').  The MoU envisions non-merchantable waste timber from
Shore's potential future mining activities being processed and
converted into cellulose-based ethanol at Nipawin Biomass's proposed
green fuel facility at Nipawin, Saskatchewan.

Shore is currently undertaking the Environmental Impact Assessment in
support of its efforts to obtain environmental approval and necessary
permits to construct Saskatchewan's first diamond mine, the Star-Orion
South Diamond Project, at a site in the Fort à la Corne forest
approximately 60 kilometres east of the City of Prince Albert.  An
Environmental Impact Statement has been filed with Saskatchewan
Environment and federal authorities, and Shore is in the process of
producing a Final Feasibility Study.  The proposed Diamond Project site
would require approximately 4,250 hectares, less than 4 percent of the
forest, to be cleared of timber.  Clearing costs would normally be part
of construction costs. Timber cleared from the site would consist of
both merchantable wood suitable for milling, and waste wood commonly
referred to as 'slash'.

Nipawin Biomass and the Saskatchewan Research Council have jointly
developed a proprietary conversion technology which will process
synthesis gas from waste wood and waste farm fibre, such as flax fibre
or straw, into ethanol and other alcohols. Its proposed ethanol plant
will require approximately 200,000 oven dried metric tonnes of
cellulosic fibre per year, approximately two-thirds of which would come
from forest waste product.  Shore's available supply would provide a
significant volume, but only a fraction of the ethanol plant's needs.

Shore Vice President Corporate Affairs Eric Cline stated: 'The MoU
commits the parties to working together to achieve a mutually
beneficial relationship whereby Shore cuts its costs by having waste
timber removed by a third party and made available for ethanol
production, and Nipawin Biomass begins to secure a cost-effective
supply of cellulose for its potential processing needs.  Shore is very
pleased that a costly waste could be converted into green energy
instead, and is happy to be associated with the efforts of people in
northeast Saskatchewan trying to develop new environmentally-friendly
technology and promoting economic development in northeast
Saskatchewan.'

The MoU provides that the parties will work together to achieve cost
reduction for Shore, a secure supply of cellulose at the best possible
terms for Nipawin Biomass and seek involvement of Aboriginal people or
businesses in the clearing, removal and transportation of the slash. 
Next steps include defining the volume of fibre likely to be available
from Shore's activities and time frames of availability, studying
market trends and possible pricing levels, and keeping one another
informed as to the progress of each project.

Shore is a Canadian-based corporation engaged in the acquisition,
exploration and development of mineral properties.  Shares of the
company trade on the TSX Exchange under the trading symbol 'SGF'.

Caution Regarding Forward-Looking Statements

This news release contains forward-looking statements within the meaning
of certain securities laws, including the 'safe harbour' provisions of
Canadian securities legislation and the United States Private
Securities Litigation Reform Act of 1995. Forward-looking information
is often, but not always, identified by the use of words such as
'anticipate', 'believe', 'expect', 'plan', 'intend', 'forecast',
'target', 'project', 'guidance', 'may', 'will', 'should', 'could',
'estimate', 'predict' or similar words suggesting future outcomes or
language suggesting an outlook. In particular, statements regarding
Shore's future operations, future exploration and development
activities or other development plans constitute forward-looking
statements. Forward-looking statements in this press release include,
but are not limited to, statements related to the amount of clearing
required for the Project, the anticipated receipt of environmental
approval and construction permits to allow the Project to proceed, the
use of the slash by third parties, and the participation of other third
parties in the removal and use of the waste timber. All forward-looking
statements and information are based on Shore's current beliefs as well
as assumptions made by and information currently available to Shore
concerning anticipated financial performance, business prospects,
strategies, regulatory developments, development plans, exploration,
development and mining activities and commitments.  Although management
considers these assumptions to be reasonable based on information
currently available to it, they may prove to be incorrect.

By their very nature, forward-looking statements involve inherent risks
and uncertainties, both general and specific, and risks exist that
predictions, forecasts, projections and other forward-looking
statements will not be achieved.  We caution readers not to place undue
reliance on these statements as a number of important factors could
cause the actual results to differ materially from the beliefs, plans,
objectives, expectations, anticipations, estimates and intentions
expressed in such forward-looking statements.  These factors include,
but are not limited to, developments in world diamond markets, changes
in diamond valuations, risks relating to fluctuations in the Canadian
dollar and other currencies relative to the US dollar, changes in
exploration, development or mining plans due to exploration results and
changing budget priorities of Shore or its joint venture partners, the
effects of competition in the markets in which Shore operates, the
impact of changes in the laws and regulations regulating mining
exploration and development, judicial or regulatory judgments and legal
proceedings, operational and infrastructure risks and the additional
risks described in Shore's most recently filed Annual Information Form,
annual and interim MD&A, and Shore's anticipation of and success in
managing the foregoing risks.

Shore cautions that the foregoing list of factors that may affect future
results is not exhaustive. When relying on our forward-looking
statements to make decisions with respect to Shore, investors and
others should carefully consider the foregoing factors and other
uncertainties and potential events. Unless required by applicable
securities legislation, Shore does not undertake to update any
forward-looking statement that may be contained herein.

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Joseph Dickson, Investor Relations Manager at (306) 667-3505 and www.shoregold.com