BUILDING QUÉBEC’S FIRST DIAMOND MINE
Annual General Meeting of Shareholders, Montreal, October 23rd 2013

Matt Manson

Pat...
2

Forward-Looking Information
This presentation contains "forward-looking information" within the meaning of Canadian sec...
3

Your Board and Management Team
Executive Officers
Head Office: Longueuil, Québec
Exploration Office: North Vancouver, B...
4

From the 2012 AGM…
5

Comments on Stornoway’s Project Financing
The Renard Project is Ready to Build
Final Project Financing is the Last Rema...
6

Why does the Renard Project Stand Out from the Pack?
What Other Mining Project Offers all of these
Advantages to Invest...
7

Renard: Québec’s First Diamond Mine
8

Renard Kimberlite Bodies
0

1

2

Kilometers

N
60

0

60

120

Kilometers

Laforge 2
Laforge 1

R10
LG2

R7
Hibou

LG3...
9

Key Project Parameters
Reserve Based Mine Plan
(Feasibility Study Nov. 2011, Optimization Jan. 2013)

Mine Life
Mineral...
Renard’s Resource Upside

10

A Project with a Long Resource Tail and Very Long Mine Life Potential

0m

Renard 65
29/24cp...
11

General Project Arrangement
Small Project Footprint of 3.1km2, Modest Environmental Impact

Processed Kimberlite
Conta...
12

Mine Plan
A Combined Open Pit and Underground Mine
Renard 65

Open Pit Mining
(years 1-2).
Underground Mining
(years 3...
13

Mine Plan Production Schedule and Cash Flow
(Mineral Reserves Only)
Open Pit & Underground Mining

Ore Tonnage (t)

2,...
14

Stornoway will be a Significant Diamond Producer
Current and Future Diamond Producers

2012 World Diamond Production D...
15

12 Months of Progress
12 Months of Progress
What has been Achieved since September 2012?

1.
2.
3.
4.

The Road is Open
Permitting Authorization...
17

The Route 167 Extension and the Renard Mine Road
The First Canadian Diamond Mine with Road Access
Construction of an a...
18

Road Construction Steps

Tree clearing and earthworks

Culvert installation

Infrastructure preparation

Bridge instal...
19

Views of the Road
KM 210

KM 155

KM 237
20

Views of the Road
KM 236

KM 215

KM 228
21

Bridges
Stornoway is constructing 16 bridges on the Renard
Mine Road.
Temporary bridges were first installed on all ri...
All Road Segments Connected on September 1st, 2013
Two Months Ahead of Schedule and 10% Below Budget

Stornoway acknowledg...
23

Construction to Commence on Renard Aerodrome
The Renard Aerodrome will be located 8 km south
of the project site.
The ...
24

Aerodrome Progress
October 2013

Tree Cutting
Area

Runway
Centerline
25

Site Progress
October 2013

Renard Mine Road
Bulk Sample
DMS Plant
Tree Clearing
R9

R2

R4
Construction Camp
R65

R65...
Permitting and Social Acceptability
Strong Regulatory and Public Support for Québec’s First Diamond Mine
Social Licence
Ma...
27

Regulatory and Fiscal Regime in Québec Settled
The last 12 months has seen proposed changes to the Québec’s system of ...
28

The Renard Optimization Study
Released January 2013
Since the release of the Renard Feasiblity
Study in November 2011,...
Liquefied Natural Gas Power Plant
Feasibility Study Released October 2013
With a view to project optimization,
Stornoway h...
30

Liquefied Natural Gas Power Plant
Feasibility Study Released October 2013
An LNG fuelled powerplant for Renard offers ...
Renard’s Resource is Continuing to Grow

31

Revised Mineral Resource Statement Release July 2013
Renard 65
Renard 3

In J...
Renard’s Resource is Continuing to Grow

32

Resource Expansion in 2013, and Beyond
Renard 4

Renard 3

Renard 2

490 m
as...
33

Renard Resource Upside
Inferred Resources and TFFE Not in Reserve Case Mine Plan

Renard’s Inferred Resources and
TFFE...
Renard’s Diamonds

34

Recent Valuation Conducted by WWW International Diamond Consultants Ltd. March 2013
The Renard kimb...
Rough Diamond Price Movements
The Diamond Market, January 2010 to September 2013

May 2011 Valuation
utilized in the FS ba...
36

Renard’s Legacy
37

Renard’s Legacy
Value Creation for our Shareholders
An Example of Constructive Partnership with Local People
• Stornow...
Renard’s Legacy

38

Mines are Wealth Generators
Over the First 11 Years Alone:

$907m of tax payments, royalty payments, ...
Renard’s Legacy

39

Mines Employ People
Construction Employment Breakdown

Around 7,000 person years of
employment create...
40

What to Expect
41

Project Schedule
2011
2H

2013

2012
1H

2H

1H

2H

2014
1H

2H

2016

2015
1H

2H

1H

2H

BFS (Complete)
ESIA (Comp...
42

Québec’s First Diamond Mine is Ready to Build

Project Green-lighted: Authorizations Issued
Community Agreements in Pl...
Upcoming SlideShare
Loading in …5
×

Swy 2013 AGM Presentation

12,639 views

Published on

Stornoway AGM Presentation October 23, 2013

Published in: Business, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
12,639
On SlideShare
0
From Embeds
0
Number of Embeds
11,822
Actions
Shares
0
Downloads
10
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Swy 2013 AGM Presentation

  1. 1. BUILDING QUÉBEC’S FIRST DIAMOND MINE Annual General Meeting of Shareholders, Montreal, October 23rd 2013 Matt Manson Patrick Godin President, CEO & Director COO & Director
  2. 2. 2 Forward-Looking Information This presentation contains "forward-looking information" within the meaning of Canadian securities legislation and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. This information and these statements, referred to herein as “forwardlooking statements”, are made as of the date of this presentation and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by law. Forward-looking statements relate to future events or future performance and reflect current expectations or beliefs regarding future events and include, but are not limited to, statements with respect to: (i) the amount of mineral resources and exploration targets; (ii) the amount of future production over any period; (iii) net present value and internal rates of return of the mining operation; (iv) assumptions relating to recovered grade, average ore recovery, internal dilution, mining dilution and other mining parameters set out in the Feasibility Study or Optimization Study; (v) assumptions relating to gross revenues, operating cash flow and other revenue metrics set out in the Feasibility Study or Optimization Study; (vi) mine expansion potential and expected mine life; (vii) expected time frames for completion of permitting and regulatory approvals and making a production decision; (viii) future exploration plans; (ix) future market prices for rough diamonds; and (x) sources of and anticipated financing requirements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives” or variations thereof or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements. Forward-looking statements are made based upon certain assumptions and other important factors that, if untrue, could cause the actual results, performances or achievements of Stornoway to be materially different from future results, performances or achievements expressed or implied by such statements. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which Stornoway will operate in the future, including the price of diamonds, anticipated costs and Stornoway’s ability to achieve its goals. Certain important factors that could cause actual results, performances or achievements to differ materially from those in the forward-looking statements include, but are not limited to: (i) required capital investment and estimated workforce requirements; (ii) estimates of net present value and internal rates of return; (iii) receipt of regulatory approvals on acceptable terms within commonly experienced time frames; (iv) the assumption that a production decision will be made, and that decision will be positive; (v) anticipated timelines for the commencement of mine production; (vi) market prices for rough diamonds and the potential impact on the Renard Project’s value; and (vii) future exploration plans and objectives. Additional risks are described in Stornoway's most recently filed Annual Information Form, annual and interim MD&As, and other disclosure documents available under the Company’s profile at: www.sedar.com. When relying on our forward-looking statements to make decisions with respect to Stornoway, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Stornoway does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by Stornoway or on our behalf, except as required by law. Robin Hopkins, a Qualified Person and the Company’s VP Exploration, has reviewed the technical information contained herein. Readers are referred to the technical report dated December 29th, 2011 in respect of the November 2011 Feasibility Study for the Renard Diamond Project, the technical report dated February 28th, 2013 in respect of the January 2013 Optimization Study, and the press release dated July 23rd 2013 in respect of the July 2013 Mineral Resource estimate for further details and assumptions relating to the project. These techncial reports and this press release list the names of the Qualified Persons in respect of these studies.
  3. 3. 3 Your Board and Management Team Executive Officers Head Office: Longueuil, Québec Exploration Office: North Vancouver, BC Matt Manson President, CEO & Director Pat Godin COO & Director Community Offices: Mistissini & Chibougamau Québec Zara Boldt CFO and VP Finance Non-Executive Directors Ebe Scherkus Independent/ Board Chairman Michel Blouin Independent/ IQ Designate Yves Harvey Independent Hume Kyle Independent John LeBoutillier Independent/ IQ Designate Monique Mercier Independent/ IQ Designate Peter Nixon Independent Serge Vézina Independent Key Managers Ghislain Poirier VP Public Affairs Yves Perron VP Engineering & Construction Robin Hopkins VP Exploration Martin Boucher Brian Glover Guy Bourque VP Sustainable Development VP Asset Protection Chief Mining Engineer Helene Robitaille Mario Courchesne Orin Baranowsky Jean-Charles Dumont Freddie Mianscum Director, HR Construct. Manager Director, IR Corporate Controller IBA Implem. Officer
  4. 4. 4 From the 2012 AGM…
  5. 5. 5 Comments on Stornoway’s Project Financing The Renard Project is Ready to Build Final Project Financing is the Last Remaining Challenge Before Construction can Begin Despite very difficult market conditions, in the past 18 months Stornoway has successfully arranged up to $144m of financing ($124m debt, $20m equity) for road and airport construction, permitting, design optimization work, engineering and financing costs. The timely completion of final mine project financing, and its impact on project schedule, is the principal risk Stornoway currently faces. Project financing discussions with lenders and prospective investors are ongoing and progressing well. Stornoway is Fully Focused on the Timely Completion of Final Project Financing
  6. 6. 6 Why does the Renard Project Stand Out from the Pack? What Other Mining Project Offers all of these Advantages to Investors? Renard will have a high margin with high cash flow: it is a major new project. Renard has strong social acceptability. Renard is in one of the world’s safest jurisdictions for mining investment (still). Renard will be the first Canadian diamond mine with an all-season road. Renard has enough resource upside for potentially decades of mining. Renard is owned 100% by Stornoway: our partners are our shareholders and in our communities. Diamonds are an essential part of our culture, and very difficult to find.
  7. 7. 7 Renard: Québec’s First Diamond Mine
  8. 8. 8 Renard Kimberlite Bodies 0 1 2 Kilometers N 60 0 60 120 Kilometers Laforge 2 Laforge 1 R10 LG2 R7 Hibou LG3 Foxtrot Property R1 Wemindji Eleonore R65 R4 Renard Western Troy Eastmain Mine Strateco R8 R9 R2 Brisay LG4 Troilus Mine R3 Temiscamie Mistissini Lynx Matagami Kimberlite Bodies with Probable Reserves Kimberlite Bodies with Inferred Resources Kimberlite Bodies with Resource Potential Chibougamau Legend LEGEND: Stornoway Properties Hydro-Québec Facility Renard Kimberlites Kimberlitic Dyke Regional Kimberlites Hydro-Québec Powerlines Route 167 Extension/ Renard Mine Road Road Exploration/ Mining Projects
  9. 9. 9 Key Project Parameters Reserve Based Mine Plan (Feasibility Study Nov. 2011, Optimization Jan. 2013) Mine Life Mineral Reserve Initial Cap-ex Operating Cost Operating Margin Operating Cash Flow Average Diamond Price Average Diamond Production After Tax NPV (7%; Jan 1 2013) After Tax IRR Production Startup Renard 65 29/24cpht 0m 11 years 17.9 mcarats 100m $752m 200m $58/t ($76/carat) 67% 300m $2.7B Renard 3 103/112cpht 400m $180/carat 1.6 mcarats/yr $391m 16.3% December 2015 *Key Assumptions: C$1=US$1, Oil US$95/barrel, 2.5% real terms diamond price growth Q311-Q425, 82.9% ore recovery, 23.8% mining and internal dilution, 0cpht dilution grade, January 1 2013 effective date for NPV and IRR calculation. Long Term Plan (Basis of Mine Permitting) Includes the mining of the 17mcarat Inferred Resources within the scope of the Feasibility Study mine infrastructure: Extended mine life, increased annual production, increased project valuation 500m 600m 700m Renard 4 60/50cpht Renard 9 53cpht Renard 2 104/119cpht 27 mcarat Indicated Mineral Resource 17 mcarat Inferred Mineral Resource 26-48 mcarat Exploration Upside Notes: Grades illustrated are for Indicated and Inferred Mineral Resources respectively at a +1DTC sieve size cut-off. Reserve and Resource categories are compliant with the "CIM Definition Standards on Mineral Resources and Reserves". Mineral resources that are not mineral reserves do not have demonstrated economic viability. The potential quantity and grade of any Exploration Target (previously referred to as a “Potential Mineral Deposit”) is conceptual in nature, and it is uncertain if further exploration will result in the target being delineated as a mineral resource. Mineral reserves are not a sub-set of mineral resources.
  10. 10. Renard’s Resource Upside 10 A Project with a Long Resource Tail and Very Long Mine Life Potential 0m Renard 65 29/24cpht Renard 3 103/112cpht Millions of Tonnes 140 Exploration Target High Range Exploration Target Low Range 100m Inferred Resource 120 200m Probable Reserve 300m 100 400m 80 500m The Vision: Deposit still Open 600m 60 700m 40 Renard 4 60/50cpht Renard 9 53cpht Renard 2 104/119cpht The resource upside at depth at Renard is world class. Although highly accretive, the project’s Inferred Mineral Resources are not included in the Feasibility Study economic analysis in accordance with NI 43-101. 20 Permitting and Long Term Business Plan The Feasibility: 11 years of mining 0 Notes: Reserve and Resource categories are compliant with the "CIM Definition Standards on Mineral Resources and Reserves". Mineral resources that are not mineral reserves do not have demonstrated economic viability. The potential quantity and grade of any Exploration Target is conceptual in nature, and it is uncertain if further exploration will result in the target being delineated as a mineral resource. Mineral reserves are not a sub-set of mineral resources.
  11. 11. 11 General Project Arrangement Small Project Footprint of 3.1km2, Modest Environmental Impact Processed Kimberlite Containment (PKC) R65 Waste Rock R2-R3 Plant Ore Stockpile Camp Road from Chibougamau Overburden Stockpile
  12. 12. 12 Mine Plan A Combined Open Pit and Underground Mine Renard 65 Open Pit Mining (years 1-2). Underground Mining (years 3-11). Underground method: Blast Hole Shrinkage, Panel Retreat with waste backfill from pits. Renard 3 Ramp access 610 meter level. 6,000 tpd plant capacity (2.2Mtonnes/year) expandable to 7,000 tpd (2.5Mtonnes/year). Renard 4 Pit at Renard 65 (initially) as a borrow-pit and waste water sump, pending resource conversion. Renard 2 View looking Northeast Renard 2 Renard 3
  13. 13. 13 Mine Plan Production Schedule and Cash Flow (Mineral Reserves Only) Open Pit & Underground Mining Ore Tonnage (t) 2,500,000 2,000,000 1,500,000 1,000,000 500,000 R2 Pit R3 Pit R2 UG Diamond Production 2027 R4 UG Gross Revenue (Real Terms) 500,000 Revenue (k C$) 600,000 2,000,000 2026 2025 R3 UG 2,500,000 1,500,000 1,000,000 500,000 400,000 300,000 200,000 100,000 - R2 R3 R4 R2 R3 R4 2027 2026 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2027 2026 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 Diamonds (carats) 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 -
  14. 14. 14 Stornoway will be a Significant Diamond Producer Current and Future Diamond Producers 2012 World Diamond Production Data/ Forecast Future Production 1 De Beers (Anglo/Botswana) $6,100m 2 Alrosa (Russia) $4,610m 3 BHPB/Dominion Diamond (TSX: DDC) $894m 4 Rio Tinto (ASE: RIO) $741m 5 Petra $403m 6 Stornoway 7 Mountain Province (note 3; TSX: MPV) $273m 8 Gem (L: GEMD) $202m 9 Lucara (note 4; TSX: LUC) $118m 10 Others $2,200m Total $15,817m (note 1; L: PDL) (note 2; TSX: SWY) Alrosa 29% BHPB/ Dominion 6% RioTinto 5% $306m DeBeers 38% Petra 2% Others 14% LUC 1% GEM 1% SWY 2% MPV 2% Notes: 1. Petra 12 month results for period ending June 30, 2013 2. Renard estimated at FS average annual diamond production of 1.7 million carats, and WWW April 2011 weighted diamond price of $180/ct, un-escalated 3. Gahcho Kue estimated at 50% of FS average annual production of 4.5 million carats, and WWW April 2011 weighted diamond price of $121/ct, un-escalated 4. Karowe estimated as per Lucara FY2013 Operating Guidance. Source: Kimberly process and Company Reports
  15. 15. 15 12 Months of Progress
  16. 16. 12 Months of Progress What has been Achieved since September 2012? 1. 2. 3. 4. The Road is Open Permitting Authorizations are in Place The Resource has Continued to Grow The Project has been Optimized 16
  17. 17. 17 The Route 167 Extension and the Renard Mine Road The First Canadian Diamond Mine with Road Access Construction of an all-season access road connecting Renard to the Québec highway network began in February 2012. Under the terms of a November 2012 agreement between Stornoway and Québec, segments A & B (143 km) are being constructed by the Ministry of Transport as the 2-lane “Route 167 Extension” and segments C & D (97 km) are being constructed by Stornoway as the single lane “Renard Mine Road”. Renard Km240 Segments C & D Stornoway 97km of Mine Road (50km/hr) Stornoway forecasts the cost to complete the Renard Mine Road at $70 million, approximately 10% below base budget. Lac Hecla Km195 Eastmain WesternTroy Abitex Km143 Strateco Under the terms of a December 2012 financing agreement, Québec has provided Stornoway financing facilities of up to $85m to complete its work, repayable upon commercial production at Renard. On September 3rd 2013 Stornoway announced that all 4 segments have been connected and the road had opened to construction traffic, 2 months ahead of schedule. Lac Naococane Km82 Segments A & B Min. of Transport 143km of Regional Highway (70km/hr) Legend Lac Km 0 Mistassini Lac Albanel Renard Project Explor./Mining Projects Stornoway Properties Albanel-TémiscamieOtish Par Mistissini 50 km Segment A: 0-82km Segment B: 82-143km Segment C: 143-195km Segment D: 195-240km
  18. 18. 18 Road Construction Steps Tree clearing and earthworks Culvert installation Infrastructure preparation Bridge installation Gravel works Last step is a topcoat gravel finish
  19. 19. 19 Views of the Road KM 210 KM 155 KM 237
  20. 20. 20 Views of the Road KM 236 KM 215 KM 228
  21. 21. 21 Bridges Stornoway is constructing 16 bridges on the Renard Mine Road. Temporary bridges were first installed on all river crossings by April 2013. As of October 2013, 12 of 16 permanent bridges have been installed. All bridges are fabricated from locally harvested, engineered wood and supplied by Nordic Structures Bois, a wholly-owned subsidiary of Chantiers Chibougamau Ltée.
  22. 22. All Road Segments Connected on September 1st, 2013 Two Months Ahead of Schedule and 10% Below Budget Stornoway acknowledges the professionalism and performance of its contractors on the Renard Mine Road: The Eskan Company Eenatuk Forestry Corp. Swallow-Fournier inc. Kiskinchiish Corp. Nordic Structures Bois Petronor Jos Ste-Croix & Fils Ltée 22
  23. 23. 23 Construction to Commence on Renard Aerodrome The Renard Aerodrome will be located 8 km south of the project site. The airstrip will be certified by Transport Canada to receive Dash 8-300 turboprop and Hercules aircraft. Design criteria (3C-NP): Gravel surface 30m wide by 1,494m long Taxiway and 100mx100m apron Equipped with assisted landing capability Traffic will be 3 to 5 flights per week for 48 workers per flight. The Renard Mine Aerodrome will be available for public use, enhancing air transport in the Monts Otish region of Québec. Renard Project Site On October 10th Stornoway announced an agreement with Québec to commence construction of the Renard Mine Aerodrome immediately, utilizing the residual amount of financing available within the Renard Mine Road credit facility. Shoulder Runway Taxi way Apron
  24. 24. 24 Aerodrome Progress October 2013 Tree Cutting Area Runway Centerline
  25. 25. 25 Site Progress October 2013 Renard Mine Road Bulk Sample DMS Plant Tree Clearing R9 R2 R4 Construction Camp R65 R65 Borrow Pit
  26. 26. Permitting and Social Acceptability Strong Regulatory and Public Support for Québec’s First Diamond Mine Social Licence March 2012: Impact and Benefits Agreement (“IBA” or the “Mecheshoo Agreement”) with the Cree Nation of Mistissini and the Grand Council of the Crees (EI). July 2012: Partnership Agreements Signed with Chibougamau and Chapais. Permitting Oct. 2012: Québec Mining Lease issued. Dec. 2012: Québec Certificate of Authorization issued. Dec. 2012: Closure Plan accepted by regulators. May. 2013: Renard Mine Road Permit issued. July 2013: Positive Federal Environmental Assessment decision issued. All Community Agreements and Regulatory Authorizations Required to Proceed to Construction are in Place. 26
  27. 27. 27 Regulatory and Fiscal Regime in Québec Settled The last 12 months has seen proposed changes to the Québec’s system of mining taxes and royalties, and mine closure bonds. Stornoway participated in the Government of Québec’s consultation process and, although impacted by these changes, welcomes the balanced approach that has been taken. Québec remains a leading destination for mining investment, and we look forward to developing Renard at a time of regulatory and fiscal certainty. For mine planning, Stornoway assumes the new hybrid fiscal regime, being the greater of the “Minimum Mining Tax” or “Progressive Mining Tax” Stornoway does not anticipate a major impact on the Renard Project from the new Mining Act still under assessment in the Québec National Assembly. Québec remains one of the world’s leading mining jurisdictions offering : • Regulatory Stability • Institutional Support • Expertise • Infrastructure
  28. 28. 28 The Renard Optimization Study Released January 2013 Since the release of the Renard Feasiblity Study in November 2011, Stornoway has sought improvements in the project’s cost and operating parameters. The Renard Optimization Study was released in January 2013, and included: • A reduced initial capital cost, principally through deferral of the shaft. • Increased project NPV and IRR. • Maintained high operating margin. • A refined underground mining sequence and draw point design. Accommodation Complex Additional design optimization and engineering work is ongoing in partnership with a joint venture made up of SNC-Lavalin Inc. and AMEC Americas Ltd. under an interim agreement pending completion of the project’s EPCM contract at time of project financing. Process and Power Plants
  29. 29. Liquefied Natural Gas Power Plant Feasibility Study Released October 2013 With a view to project optimization, Stornoway has been investigating more cost efficient alternatives for on-site power supply than traditional diesel fuelled gensets. A Hydro-Quebec powerline has been ruled out in the short term due to high cap-ex cost. On October 21st Stornoway announced it will proceed with an LNG fuelled gen-set option, made possible by the ability to receive regular cryogenic LNG shipments on the Renard Mine Road. The Renard LNG plant will comprise seven 2.1MW rated gas gen-sets, providing sufficient power generation capacity for the project’s normal operating specification of 9.5MW. 29
  30. 30. 30 Liquefied Natural Gas Power Plant Feasibility Study Released October 2013 An LNG fuelled powerplant for Renard offers many advantages over diesel: • Greatly reduced annual operating costs of $8m to $10m per year, for a small incremental capital cost of $2.6m. • Up to 43% less greenhouse gas emissions. • Long term, stable supply market utilizing existing commercial distribution network within Quebec. • Elimination of on-site propane, as LNG will be used for building and underground mine heating. Diesel will continue to be used for the mobile mining fleet and construction activities Cost Improvements with LNG Unit Power Cost (C$/kWh) 1 Jan 2013 Optimization Study with Diesel Jan 2013 Optimization Study with LNG Unit Operating Cost (C$/tonne) 1,2 $0.299 $57.63 $0.188 $53.84 (-37%) (-7%) Initial Capital Cost (C$m) 1 $752.1 $754.0 (+0.3%) Life of Mine Capital Cost (C$m) 1,3 $1,013 $1,010 (-0.3%) 27.5 5.9 (-79%) n/a 3.5 41.7 n/a Annual Diesel Consumption (million litres) Annual LNG Consumption (thousand m3/annum) Annual Propane Consumption (thousand m3/annum) Notes Key Assumptions 1. January 2013 Optimization Study costs expressed in October 2012 terms. 2. Excludes capitalized preproduction costs. Based on the 11 year reserve-based mine life (17.9 mcarats) contained within the January 2013 Optimization Study, with a normal operating load of 9.49MW, C$1=US$1, Oil US$95/barrel 3. Includes all initial, sustaining and deferred capital, contingencies and escalation
  31. 31. Renard’s Resource is Continuing to Grow 31 Revised Mineral Resource Statement Release July 2013 Renard 65 Renard 3 In July 2013 Stornoway release the results of a revised Mineral Resource Statement with a 14% increase in contained carats within the Indicated Resource category. This followed the successful completion of a 5,000 tonne bulk sample at Renard 65 in 2012 and the recovery of 997 carats of diamonds for valuation. The Renard 65 bulk sample returned the highest value diamonds to date at the Renard Project, with a March 2013 valuation of US$250/ct, giving a base model of US$180/ct (sensitivities of $203 & $169). Upon conversion to a Mineral Reserve, this material may be incorporated into the mine plan in two ways: 1. add 1 year to the LOM and increase the production rate to 2.5Mt/a or 2. add 3 years to the LOM as a reserve tail at a production rate of 2.1Mt/a The cost of developing a 75m deep pit at Renard 65 is already contained within the Feasibility Study. Notes: Reserve and Resource categories are compliant with the "CIM Definition Standards on Mineral Resources and Reserves". Mineral resources that are not mineral reserves do not have demonstrated economic viability. The potential quantity and grade of any Exploration Target is conceptual in nature, and it is uncertain if further exploration will result in the target being delineated as a mineral resource. Mineral reserves are not a sub-set of mineral resources. Renard 4 Renard 9 Renard 2 Three Renard 65 diamonds: 9.78 ct and 6.41 ct diamonds recovered from the 2012 bulk sample and a 4 carat stone discovered in drillcore in 2003
  32. 32. Renard’s Resource is Continuing to Grow 32 Resource Expansion in 2013, and Beyond Renard 4 Renard 3 Renard 2 490 m asl Renard 65 Renard 9 0 m 1 2 3 790 m -275 m asl 1. 27 mcarat Indicated Mineral Resource Conversion of Renard 65 Inferred Resources to Indicated to 150m depth (July 2013: Completed) 2. Addition of Renard 2 Country Rock Breccia to both Indicated and Inferred Resources (July 2013: Completed) 3. 6.2 mcarats in 5.23 Mtonnes (at 119 cpht) in Renard 2 Inferred Resources between 610m and 700m depth: 4.2 to 7.3 Mcarats TFFE between 700m and 770m depth. Open below 770m. (Target for Future Exploration) 17 mcarat Inferred Mineral Resource 26-48 mcarat Exploration Upside
  33. 33. 33 Renard Resource Upside Inferred Resources and TFFE Not in Reserve Case Mine Plan Renard’s Inferred Resources and TFFE represent a potential increase over the current Indicated Resource of 160% to 240%. 0m 100m 2.7 mcarats 1.2 mcarats 200m Each kimberlite remains open at 770m depth 300m 2.4 mcarats 0.6 mcarats 1.2 mcarats 400m 500m 0.8 to 2.8 mcarats 6.2 mcarats 600m 700m 27 mcarat Indicated Mineral Resource 7.3 to 13.5 mcarats 5.6 to 11.8 mcarats 17 mcarat Inferred Mineral Resource 2.0 to 4.3 mcarats 4.2 to 7.3 mcarats 26-48 mcarat Exploration Upside Notes: Reserve and Resource categories are compliant with the "CIM Definition Standards on Mineral Resources and Reserves". Mineral resources that are not mineral reserves do not have demonstrated economic viability. The potential quantity and grade of any Exploration Target (previously referred to as a “Potential Mineral Deposit”) is conceptual in nature, and it is uncertain if further exploration will result in the target being delineated as a mineral resource. Mineral reserves are not a sub-set of mineral resources.
  34. 34. Renard’s Diamonds 34 Recent Valuation Conducted by WWW International Diamond Consultants Ltd. March 2013 The Renard kimberlite pipes have similar, but marginally different diamond populations exhibiting coarse size distributions and with high proportions of large white gems. 99% by weight gem/near-gem quality. 1% industrial quality boart. Significant value upside in large gems. Diamonds larger than 10.8ct, “Specials”) estimated at three to six 50-100ct stones and one to two +100ct stones every 100,000 carats (two weeks). Not accounted for in the revenue model. Stornoway most recently valued the Renard diamond samples with WWW International Diamond Consultants Ltd. in March 2013. Size of Valuation Sample WWW March 2013 Sample Price (carats) (US$/carat)1 Renard 2 1,580 $180 Renard 3 2,753 $173 Renard 4 2,674 Renard 65 997 Kimberlite Body WWW March 2013 Base Case Price Model Renard 3 Bulk Sample Stones larger than 2 carats. “Run of Mine” Sensitivities (Minimum to High) (US$/carat)1 $171 to $214 $100 $190 $151 $104 ($150)2 $250 $180 $169 to $203 $141 to $185 $98 to $168 Notes 1. All prices in US$/carat. Samples utilizing a +1 DTC sieve size cut-off. 2. Should the Renard 4 diamond population prove to have a diamond population with a size distribution equal to the average of Renard 2 and 3, WWW have estimated that a base case diamond price model of $150 per carat based on March 2013 pricing.
  35. 35. Rough Diamond Price Movements The Diamond Market, January 2010 to September 2013 May 2011 Valuation utilized in the FS based on the average of 5 diamantaires c.10% below the WWW rough index price A tracking of the diamond market since the publication of the November 2011 FS indicates rough diamond prices have generally remained within the bounds of sensitivities contained within the FS financial model (May 2011 spot prices and a 2.5% real terms annual price escalator). 35
  36. 36. 36 Renard’s Legacy
  37. 37. 37 Renard’s Legacy Value Creation for our Shareholders An Example of Constructive Partnership with Local People • Stornoway’s relationship with the Crees of Eeyou Istchee • Stornoway’s relationship with Chibougamau and Chapais Québec Institutional Equity Ownership • Stornoway’s Largest Shareholder is Investissement Québec, at 35% (fully diluted). An Economic Engine in the James Bay Region of Québec • Long Term Direct and Indirect Employment • Long Term Local Contracting and Purchasing A Catalyst for Public Infrastructure Development • The Route 167 Extension/Renard Mine Road • A New Aerodrome in the Otish Mountains An Important Government Revenue Base • Federal and Québec Income Tax • Québec Mining Duty • Personal Income Taxes and Sales Taxes 10.15 carat gem quality octahedron
  38. 38. Renard’s Legacy 38 Mines are Wealth Generators Over the First 11 Years Alone: $907m of tax payments, royalty payments, and Public infrastructure support payments. Payments associated with the project’s Long Term Business Plan are substantially higher still. DIAQUEM Royalty $94 Québec Mining Duties $372 Québec Income Tax $163 Notes: As estimated by Stornoway based on the Renard Feasibility Study Optimization dated January 2013, and existing tax regimes. In nominal terms. Québec Mining Duties subject to certain refundable credits Contribution to the Renard Mine Road and Aerodrome $77 Maintenance Contribution to the Renard Federal Income Mine Road $13 Tax $188
  39. 39. Renard’s Legacy 39 Mines Employ People Construction Employment Breakdown Around 7,000 person years of employment created during construction (2013-2016). Induced Employment 43% Indirect Employment with Suppliers 36% Annual average of 482 direct jobs (Stornoway and contractors) created during operations (20162027). 405 Stornoway employees with an average salary of $115 000/y (including benefits). 700 Stornoway Direct Employment 21% Direct Renard Employment An estimated of 740 jobs maintained or supported at suppliers and local merchants. Annual operating expenditures on Québec goods and services of $90m (73% of total). Construction 500 Manpower 600 Contractors 400 Process Plant 300 Underground 200 100 0 Notes: As estimated by Stornoway based on the Renard Feasibility Study Optimization dated January 2013 Open Pit G&A
  40. 40. 40 What to Expect
  41. 41. 41 Project Schedule 2011 2H 2013 2012 1H 2H 1H 2H 2014 1H 2H 2016 2015 1H 2H 1H 2H BFS (Complete) ESIA (Complete) Community Hearings (Complete) Reg. Authorizations (Complete) Specific Operating Permits (50) Detailed Engineering Project Financing Road Construction First Vehicle Access Site Construction Commissioning and Ramp-up Commercial Production With first vehicle access achieved on the Renard Mine Road, the timely completion of mine project financing is the now principal driver on project schedule
  42. 42. 42 Québec’s First Diamond Mine is Ready to Build Project Green-lighted: Authorizations Issued Community Agreements in Place Stornoway Operating Team in Place Access Road Opened Resource Growing Project Design Fully Optimized Favourable Cost Environment Stornoway is Fully Focused on the Timely Completion of Final Project Financing

×