THE CANADIAN PRESS

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SASKATOON - Shore Gold Inc. (TSX:SGF) recorded a net loss of $2.8 million for the second quarter, reversing a year-ago profit of $1.7 million on a charge related to its holding of asset-backed commercial paper.

The Saskatoon-based company said the loss stemmed largely from a $2 million impairment in fair value of third-party asset-backed commercial paper, or ABCP, held by the company that was recorded during the quarter.

That class of investment has been frozen since last summer because of a general concern that ABCP could be linked to risky assets such as U.S. subprime housing loans.

Shore Gold also generated lower interest income because it has less cash on hand due to exploration expenditures incurred, the acquisition of a 22.5 per cent interest in the Buffalo Hills joint venture, and the investment in ABCP.

The 2007 results had also been boosted by an income tax recovery.

The second-quarter 2008 loss amounted to two cents per share, down from a profit of a penny per share for the same period in 2007.

Stock in Shore Gold traded at $1.52 on the TSX Wednesday, down three cents or two per cent.