Stornoway Updated Mine Plan Support Materials March 30, 2016

6,112 views

Published on

Support materials to accompany the Updated Mine Plan and Mineral Reserve Estimate from March 30, 2016

Published in: Investor Relations
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
6,112
On SlideShare
0
From Embeds
0
Number of Embeds
4,842
Actions
Shares
0
Downloads
4
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Stornoway Updated Mine Plan Support Materials March 30, 2016

  1. 1. BUILDING QUÉBEC’S FIRST DIAMOND MINE Renard Updated Mine Plan and Mineral Reserve Estimate Support Materials, March 30, 2016
  2. 2. 2 Forward-Looking Information This presentation contains "forward-looking information" within the meaning of Canadian securities legislation. This information and these statements, referred to herein as “forward-looking statements”, are made as of the date of this presentation and the Corporation does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by law. These forward-looking statements include, among others, statements with respect to our beliefs, plans, objectives, expectations, anticipations, estimates and intentions. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. 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 Reserves, Mineral Resources and exploration targets; (ii) the amount of future production over any period; (iii) assumptions relating to recovered grade, average ore recovery, internal dilution, mining dilution and other mining parameters set out in the March 2016 Updated Renard Mine Plan and Mineral Reserve Estimate ; (iv) assumptions relating to gross revenues, operating cash flow and other revenue metrics set out in the 2016 Updated Renard Mine Plan and Mineral Reserve Estimate; (v) mine expansion potential and expected mine life; (vi) the expected time frames for the completion of construction, start of mining and commercial production at the Renard Diamond Project and the financial obligations or costs incurred by Stornoway in connection with such mine development; (vii) the expected time frames for the completion of the open pit and underground mine at the Renard Diamond Project; (viii) future market prices for rough diamonds; and (ix) future market prices for liquefied natural gas and diesel. All statements, other than statements of historical fact regarding Stornoway or the Renard Diamond Project, are forward-looking statements. 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”, “schedule” 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 by Stornoway or its consultants 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 prospects and 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, regulatory developments, development plans, exploration, development and mining activities and commitments. Although management considers its assumptions on such matters to be reasonable based on information currently available to it, they may prove to be incorrect. Certain important assumptions by Stornoway or its consultants in making forward-looking statements include, but are not limited to: (i) required capital investment; (ii) the amount of future production over any period; (iii) assumptions relating to recovered grade, average ore recovery, internal dilution, mining dilution and other mining parameters set out in the March 2016 Updated Renard Mine Plan and Mineral Reserve Estimate ; (iv) assumptions relating to gross revenues, operating cash flow and other revenue metrics set out in the 2016 Updated Renard Mine Plan and Mineral Reserve Estimate ; (v) estimates of net present value; (vi) anticipated timelines for completion of construction, commencement of mine production and development of an open pit and underground mine at the Renard Diamond Project, (vii) anticipated geological formations; (viii) Stornoway’s interpretation of the geological drill data collected and its potential impact on stated Mineral Resources, Mineral Reserves, and mine life; and (ix) Stornoway’s ability to draw on the financing elements of the Renard Diamond Project Financing Transactions closed on July 8th, 2014. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that estimates, forecasts, projections and other forward- looking statements will not be achieved or that assumptions do not reflect future experience. We caution readers not to place undue reliance on these forward- looking statements as a number of important risk factors could cause the actual outcomes to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates, assumptions and intentions expressed in such forward-looking statements. These risk factors may be generally stated as the risk that the assumptions and estimates expressed above do not occur, including the assumption in many forward-looking statements that other forward-looking statements will be correct, but specifically include, without limitation: (i) risks relating to variations in the grade, kimberlite lithologies and country rock content within the material identified as Mineral Resources from that predicted; (ii) variations in rates of recovery and breakage; (iii) changes in development or mining plans due to changes in other factors or exploration results; (iv) slower increases in diamond valuations than assumed; (v) risks relating to fluctuations in the Canadian dollar and other currencies relative to the US dollar; (vi) increases in the costs of proposed capital and operating expenditures; (vii) increases in financing costs or adverse changes to the terms of available financing, if any; (viii) tax rates or royalties being greater than assumed; (ix) risks relating to the receipt of regulatory approvals; and (x) the additional risks described in Stornoway's most recently filed Annual Information Form, annual and interim MD&A and Stornoway's anticipation of and success in managing the foregoing risks. Stornoway cautions that the foregoing list of factors that may affect future results is not exhaustive, and new, unforeseeable risks may arise from time to time.
  3. 3. 3 Forward-Looking Information (continued) The Renard Diamond Project, December 23, 2015 Readers are referred to the technical report dated as of March 30, 2016 entitled “Updated Renard Diamond Project Mine Plan and Mineral Reserve Estimate, Québec, Canada” in respect of the March 2016 Updated Mine Plan and Mineral Reserve Estimate, and the technical report dated January 11, 2016 and press release dated September 24, 2015 in respect of the September 2015 Mineral Resource estimate for further details and assumptions relating to the project. The Qualified Persons that prepared the technical reports and press releases that form the basis for the presentation are listed in the Company’s AIF dated March 30, 2016. Disclosure of a scientific or technical nature in this presentation was prepared under the supervision of Patrick Godin, P.Eng. (Québec), Chief Operating Officer and Robin Hopkins, P.Geol. (NT/NU), Vice President, Exploration, both “qualified persons” under NI 43-101. Darrell Farrow, PrSciNat, P.Geo.(BC), Ordre des geologues du Quebec (Special Authorisation # 332) of GeoStrat Consulting Services Inc. is the independent Qualified Person responsible for preparation of the mineral resource estimate for the Renard Diamond Project. GeoStrat Consulting Services Inc, a mineral resources consultancy, focuses on client interaction and involvement in developing resource models, and has experience in exploration, geological modeling, resource evaluation, production, resource reconciliation and accounting of diamond deposits around the globe. GeoStrat has verified the results disclosed herein with respect to the mineral resources, and has conducted appropriate verification on the underlying data, including visitations to the Renard site and the primary process laboratories.
  4. 4. 4 Chronology of Renard Studies Feasibility Study (Nov 2011. NI 43-101 Technical Report Dec 2011) 11 Year Mine Plan based on 18 million carat Mineral Reserve derived from January 2011 NI 43-101 Resource. Long Term Business Plan Companion study to the Feasibility Study with an extended mine plan incorporating the project`s Inferred Mineral Resources. Basis of mine design and permitting Optimization Study (Jan 2013. NI 43-101 Technical Report Mar 2013) Refined Feasibility mine design, including shaft deferral and a modified underground mining sequence. 11 Year Mine Plan based on 17.9 million carat Mineral Reserve. Mineral Resource Update (July 2013) Resource update with 14% increase in Indicated Resource contained carats LNG Feasibility Study (Oct 2013) Modified project Cap-ex and Op-ex for LNG powered gen-sets Mineral Resource Update (Sep 2015. NI 43-101 Technical Report Oct 2015) Resource update with 11% increase in Indicated Resource contained carats Updated Mine Plan and Mineral Reserve Estimate (Mar 2016. NI 43-101 Technical Report Mar 2016) Update based on 2013 & 2015 Mineral Resource Updates, accelerated construction schedule, and expanded processing 14 Year Mine Plan based on 22.3 million carat Mineral Reserve
  5. 5. 5 What has Changed? January 2013 Optimization Study to March 2016 Updated Mine Plan R65 Added to Mine Plan 2013 Resource Update additional Indicated Mineral Resources at Renard 65. R65 pit was contemplated in 2013 Optimization Study. Material will represent expansion ore to the current mine plan. R2 Reserve Extends down to 700m 2015 Resource Update added additional Indicated Mineral Resources at Renard 2 between 600m to 700m depth. Ramp will be extended down 710 meters depth to extract additional Renard 2 ore. CRB Material Added to Reserve 2015 Resource Update added additional low grade Indicated Mineral Resources from Renard 2 CRB and CRB2a material within the envelope of the Renard 2-Renard 3 open pit and the Renard 2 underground mine. Material was assumed as zero-grade waste in 2013 Optimization Study. Now represents a low grade stockpile for plant expansion and/or processing at end of mine life. Mine Life Extension and Plant Expansion Mineral Reserve based mine life from 11 years to 14 years Plant expansion from 2.16 Mt/a (6,000 tpd) to 2.52 Mt/a (7,000 tpd) starting in 2018 utilizing Renard 65 ore. Upside Elements not Included in New Mine Plan 13.4 million carats of Inferred Mineral Resources (24.5 million tonnes at 54 cpht) and 33.0 to 71.1 million carats of non- resource exploration upside (76.2 to 113.2 million tonnes at grades ranging from 25 to 168 cpht). Large diamond recovery
  6. 6. 6 Renard Diamond Project NI 43-101 Mineral Resource Estimate Effective September 24 2015. Changes to Previous Estimate Shown in Italics Notes 1 Resource categories were completed in accordance with the "CIM Definition Standards on Mineral Resources and Reserves". Mineral resources that are not mineral reserves do not have demonstrated economic viability. 2 Totals may not add due to rounding. 3 Carats per hundred tonnes. Estimated at a +1 DTC sieve size cut-off. 4 Diamond valuation data utilized for the test of prospects of reasonable economic extraction are derived from a diamond valuation exercise undertaken in March 2014 (see Stornoway Annual Information Form dated July 2015). Indicated Mineral Resources(1,2,4) Contained Carats (millions) Tonnes (millions) Grade (cpht)(3) Renard 2, All Units 21.58 +15.6% 25.70 +38.3% 84 -16.4% Renard 2, w/o CRB-2A, CRB 20.39 +11.0% 20.52 +15.9% 99 -4.3% CRB-2A 0.29 +2.6% 0.90 +2.6% 32 -- CRB 0.90 n/a 4.28 n/a 21 n/a Renard 3 1.86 +2.3% 1.82 +3.4% 102 -1.0% Renard 4 4.44 +3.0% 7.25 -- 61 +3.0% Renard 65 2.30 -- 7.87 -- 29 -- Total Indicated Mineral Resources 30.17 +11.4% 42.63 +20.2% 71 -7.4% Inferred Mineral Resources(1,2) Contained Carats (millions) Tonnes (millions) Grade (cpht)(3) Renard 2, All Units 3.88 -48.0% 6.59 -44.0% 59 -7.2% Renard 2, w/o CRB 3.36 -46.1% 4.08 -22.0% 82 -30.9% CRB 0.53 -57.6% 2.51 -61.6% 21 +10.5% Renard 3 0.61 -- 0.54 -- 112 -- Renard 4 2.46 +3.5% 4.75 -- 52 +3.5% Renard 65 1.18 -- 4.93 -- 24 -- Renard 9 3.04 -- 5.70 -- 53 -- Lynx 1.92 -- 1.80 -- 107 -- Hibou 0.26 -- 0.18 -- 144 -- Total Inferred Mineral Resources 13.35 -20.8% 24.49 -17.5% 54 -4.0% Inferred Mineral Resources Indicated Mineral Resources High Range TFFE Renard 65 775m depth Renard 4 775m depth Renard 9 775m depth Renard 2 1,250m depth Renard 3 1,250m depth North East View
  7. 7. 7 Renard Diamond Project Exploration Potential Effective September 24 2015. Changes to Previous Potential Shown in Italics Notes 1 Target for Further Exploration: represents potential upside that can be reasonably assumed given the nature and grade of material within the current 2015 Mineral Resource. The Renard 2 shape has been projected 250m below the deepest kimberlite intersection at 1,000m depth. Tonnage and grade ranges are not directly applicable to potential total carats.The potential quantity and grade of any Exploration Target is conceptual in nature, there has been insufficient information to define a mineral resource, and it is uncertain if further exploration will result in the target being delineated as a mineral resource. 2 Carats per hundred tonnes. Potential at a +1 DTC sieve size cut-off. Notes Resource categories were completed in accordance with the "CIM Definition Standards on Mineral Resources and Reserves". Mineral resources that are not mineral reserves do not have demonstrated economic viability. Area indicated in yellow represents a gap in drill coverage that may represent additional exploration potential outside of the current Mineral Resource Estimate and not included in the current Targets for Further Exploration. Renard 65 775m depth Renard 4 775m depth Renard 9 775m depth Renard 2 1,250m depth Renard 3 1,250m depth Inferred Mineral Resources Indicated Mineral Resources High Range TFFE North East View Targets for Further Exploration(1) Contained Carats (millions) Tonnes (millions) Grade (cpht)(2) Renard 1 1.7 to 3.9 8.6 to 13.0 20 to 30 Renard 2, All Units 3.7 to 15.5 6.1 to 15.5 60 to 100 Renard 3 3.6 to 6.3 3.4 to 3.8 105 to 168 Renard 4 5.6 to 11.8 11.1 to 15.4 50 to 77 Renard 65 7.3 to 13.5 29.0 to 40.9 25 to 33 Renard 7 1.9 to 3.8 6.3 to 9.4 30 to 40 Renard 9 2.0 to 4.3 3.9 to 6.3 52 to 68 Renard 10 0.7 to 2.1 1.2 to 1.7 60 to 120 Lynx 3.0 to 3.8 3.1 to 3.2 96 to 120 Hibou 3.6 to 6.1 3.5 to 4.0 104 to 151 Total TFFE 33.0 +28% to 71.1 +40% 76.2 +49% to 113.2 +51% R10 R7 R1 R65 R4 R9 R2 R3
  8. 8. 8 0 20 40 60 80 100 120 140 160 180 Mine Plan: 14 years of mining on 22mcarat Mineral Reserve (33mtonnes) Permitting and 2013 Long Term Plan The Vision: Deposit still Open Millions of Tonnes TFFE High Range Inferred Mineral Resource TFFE Low Range Indicated Mineral Resource The Renard Diamond Project A Large, High Value Diamond Resource with a Very Long Mine Life Potential 0m 100m 200m 400m 900m 700m 500m 300m 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. Renard 65 29/24cpht Renard 3 102/112cpht Renard 4 61/52cpht Renard 9 53cpht Renard 2 84/59cpht 800m 600m 1100m 1200m 1000m 30 mcarat Indicated Mineral Resource 13 mcarat Inferred Mineral Resource 33-71 mcarat TFFE Mineral Resource Estimate Effective September 24, 2015 (NI 43-101)
  9. 9. 9 Renard 2 Mineral Resource Update Effective September 24 2015. Changes to Previous Estimate Shown in Italics Pipe shape at surface (1.89ha) High TFFE at 1,250m (1.38ha) Notes 1 Reserve and Resource categories were completed in accordance with the "CIM Definition Standards on Mineral Resources and Reserves". Mineral resources that are not mineral reserves do not have demonstrated economic viability. 2 Totals may not add due to rounding. 3 Carats per hundred tonnes. Estimated at a +1 DTC sieve size cut-off. 4 Diamond valuation data utilized for the test of prospects of reasonable economic extraction are derived from a diamond valuation exercise undertaken in March 2014 (see Stornoway Annual Information Form dated July 2015). 0m 700m 850m 1250m INDICATED INFERRED TFFE 600m: Base of Previous Indicated Mineral Resources Depth Below Surface Kimberlite outline at surface (0.75ha) Low TFFE at 1,250m (0.62ha) Base of New Indicated Resources (1.55ha) Indicated Mineral Resources(1,2,4) Contained Carats (millions) Tonnes (millions) Grade (cpht)(3) Renard 2, All Units 21.58 +15.6% 25.70 +38.3% 84 -16.4% Renard 2, w/o CRB- 2A, CRB 20.39 +11.0% 20.52 +15.9% 99 -4.3% CRB-2A 0.29 +2.6% 0.90 +2.6% 32 -- CRB 0.90 n/a 4.28 n/a 21 n/a Inferred Mineral Resources(1,2) Contained Carats (millions) Tonnes (millions) Grade (cpht)(3) Renard 2, All Units 3.88 -48.0% 6.59 -44.0% 59 -7.2% Renard 2, w/o CRB 3.36 -46.1% 4.08 -22.0% 82 -30.9% CRB 0.53 -57.6% 2.51 -61.6% 21 +10.5% Target for Further Exploration(1) Contained Carats (millions) Tonnes (millions) Grade (cpht)(2) Renard 2, All Units 3.7 to 15.5 6.1 to 15.5 60 to 100 North View Renard 2 NI 43-101 Mineral Resource Estimate Renard 2 Targets for Further Exploration Notes 1 Represents potential upside that can be reasonably assumed given the nature and grade of material within the current 2015 Mineral Resource. The potential quantity and grade of any Exploration Target is conceptual in nature, there has been insufficient information to define a mineral resource, and it is uncertain if further exploration will result in the target being delineated as a mineral resource. 2 Carats per hundred tonnes. Potential at a +1 DTC sieve size cut-off. Pinch in model in area lacking drill coverage
  10. 10. 10 Renard 2 Geological Model and Unit Grades Effective September 24 2015. Changes to Previous Estimate Shown in Italics Within the Indicated Mineral Resources Average Grade (cpht)(1) Average Dilution (%)(2) Kimb 2a (“Blue”) 76 +3.0% 52 -0.9% Kimb 2b (“Brown”) 145 +1.0% 30 -0.9% Kimb 2c (HK)3 229 +0.5% 12 -3.1% CRB-2a 32 -- 93 -- CRB 21 n/a 96 n/a Within the Inferred Mineral Resources Average Grade (cpht)(1) Average Dilution (%)(2) Kimb 2a (“Blue”) 67 -2.4% 65 +9.2% Kimb 2b (“Brown”) 145 +0.3% 30 +1.5% Kimb 2c (HK)3 229 +0.5% 12 -3.1% CRB 21 +10.5% 96 -- Notes 1 Carats per hundred tonnes. Estimated at a +1 DTC sieve size cut-off. 2 Represents the average amount of non-diamond bearing country rock estimated within each geological unit. 3 The Kimb 2c (Hypabyssal Kimberlite, or “HK”) unit is a constituent component of each of the Kimb2a, Kimb2b, CRB and CRB-2a units. Renard 2 Average Mineral Resource Grades, by Geological Unit Kimb2b (“Brown”) Kimb2a (“Blue”) CRB CRB-2a Kimb2c (HK) West View Contact Pinch in model in area lacking drill coverage 0m 700m 850m 1250m INDICATED INFERRED TFFE 600m: Base of Previous Indicated Mineral Resources Depth Below Surface North View Photographs of geological units from the 2007 Renard underground bulk sample program
  11. 11. 11 Renard 2 Geological Model and Renard 2-Renard 3 Convergence Effective September 24 2015 Pipe shape at surface (1.89ha) Kimberlite outline at surface (0.75ha) Kimb2b (“Brown”) Kimb2a (“Blue”) CRB CRB-2a Surface View, Looking Down Surface View, Looking Down 0m 700m 850m 1250m R2 INDICATED R2 INFERRED R2 TFFE Depth Below Surface R3 INDICATED R3 INFERRED R3 TFFE North East View Resource categories were completed in accordance 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, there has been insufficient information to define a mineral resource and it is uncertain if further exploration will result in the target being delineated as a mineral resource. Renard 2 Renard 3 Renard 2 Renard 3 126.6m R3 intersection in DDH R2- 81J (in red) starting 942.2m downhole: 47m true width. R3 TFFE: >500m potential between drill intersections
  12. 12. 12 March 2016 Updated Mine Plan A Combined Open Pit and Underground Mine Tonnes of ore per meter of development. Main ramp excluded Combined open pit and underground mining Open pit mining R2-R3 2015 to 2018, processing from 2016 Open pit mining R65 2014 to 2029, processing from 2018 Four production levels in R2 underground mine, one in R4 and one in R3. Underground mining R2 2018 to 2027 (steps 1- 4) using blasthole shrink stoppage with panel retreat. Underground mining R3 and R4 2026-2029 (steps 5 and 6) using longhole stoping and blasthole stoppage respectively. Stopes Ore t/m 1 R2-290 836 2 R2-470 781 3 R2-590 897 4 R2-710 940 5 R3-250 448 6 R4-270 680
  13. 13. 13 March 2016 October 2016 December 2016 August 2017 December 2017 End of April 2018 March 2016 Updated Mine Plan A Combined Open Pit and Underground Mine 2.58 Mcarats (4.33 Mtonnes at 59cpht) 15.5 Mtonnes moved Stripping ratio (Waste to Ore): 2.54 Depth 130m Renard 2-Renard 3 Open Pit (2015-2018) March 2018 End 2018 End 2019 End 2021 End 2024 End 2027 1.38 Mcarats (4.58 Mtonnes at 30cpht) 14.0 Mtonnes moved Stripping ratio (Waste to Ore): 2.11 Depth 155m Renard 65 Open Pit (2014-2029)
  14. 14. 14 NI 43-101 Probable Mineral Reserves March 30, 2016 Probable Mineral Reserve(1,2,4) (Changes from January 2013 Probable Mineral Reserve estimate shown in italics) Mining Recovery Factors Utilized in the Reserve Calculation Carats (millions) Tonnes (millions) Grade (cpht)(3) Mining Dilution(5) Internal Dilution(6) Mining Recovery Open Pit Renard 2, All Units 1.85 49% 3.54 170% 52.2 -45% 2.9% 0.0% 98% Renard 2 1.38 11% 1.49 14% 92.7 -2% 1.7% 0.0% 98% CRB-2A 0.15 n/a 0.47 n/a 31.4 n/a 1.8% 0.0% 98% CRB 0.32 n/a 1.58 n/a 20.2 n/a 4.3% 0.0% 98% Renard 3 0.73 9% 0.79 10% 92.3 -1% 11.4% 0.0% 98% Renard 4 -- n/a -- n/a -- n/a -- -- -- Renard 65 1.38 n/a 4.58 n/a 30.1 n/a 3.5% 0.0% 98% OP Probable Mineral Reserves 3.96 107% 8.91 339% 44.4 -53% 3.9% 0.0% 98% Underground Renard 2 15.65 15% 19.68 16% 79.6 -1% 20.2% 6.4% 82% Renard 3 0.86 2% 1.22 22% 70.2 -16% 14.0% 29.8% 85% Renard 4 1.67 6% 3.46 -7% 48.3 15% 14.0% 2.2% 78% Renard 65 -- n/a -- n/a -- n/a -- -- -- UG Probable Mineral Reserves 18.18 13.4% 24.36 12.0% 74.6 1% 18.9% 6.7% 82% Stockpile Stockpile 0.11 n/a 0.15 n/a 73.9 n/a -- -- -- Total Probable Mineral Reserves 22.26 24.0% 33.42 40.5% 66.6 -11.3% 14.8% 4.9% 86% Notes 1 Reserve categories follow the CIM Standards for Mineral Resources and Mineral Reserves. 2 Totals may not add due to rounding. 3 Carats per hundred tonnes. Estimated at a +1 DTC sieve size cut-off. 4 Diamond valuation data utilized for the test of prospects of reasonable economic extraction are derived from a diamond valuation exercise undertaken in March 2014 (see Stornoway Annual Information Form dated March 2016). 5Represents the proportion of waste rock expected to be extracted during mining. Mining dilution is assumed to have zero grade. 6Represents planned dilution of waste rock through stope design in the underground mine. 7Represents mine and stockpiled ore as of December 31, 2015
  15. 15. 15 NI 43-101 Probable Mineral Reserves March 30, 2016 Kimb2a/ Kimb2b 35% CRB-2A 4% CRB 8% Renard 3 18% Renard 65 35% Renard 2, All Units 47% Carats Open-Pit Probable Mineral Reserves Underground Probable Mineral Reserves Kimb2a/ Kimb2b 17% CRB-2A 5% CRB 18% Renard 3 9% Renard 65 51% Renard 2, All Units 40% Tonnes Renard 2 86% Renard 3 5% Renard 4 9% Carats Renard 2 81% Renard 3 5% Renard 4 14% Tonnes Reserve categories are compliant with the "CIM Definition Standards on Mineral Resources and Reserves".
  16. 16. 16 Mine Production Profile Mineral Reserve Case. Not Including Inferred Mineral Resources or Non-Resource Upside - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Tonnes UG R3 UG R4 UG R2 OP R65 OP R2/R3 - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Carats R65 R4 R3 CRB CRB2A R2
  17. 17. 17 Mine Production Profile Mineral Reserve Case. Not Including Inferred Mineral Resources or Non-Resource Upside $0 $100 $200 $300 $400 $500 $600 $700 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Gross Revenue (C$ millions) Renard 65 Renard 4 Renard 3 Renard 2 0 500 1,000 1,500 2,000 2,500 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Carat Sales (000s) Renard 65 Renard 4 Renard 3 Renard 2 Notes: Gross Revenue expressed in real terms.
  18. 18. 18 97.00 85.71 66.45 62.55 68.73 73.09 77.81 78.74 79.60 76.64 74.01 61.18 50.61 33.02 20.23 0 20 40 60 80 100 120 - 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Grade(CPHT) Annual Plant Feed Tonnage and Recovered Grade R65 R4 R3 CRB CRB2A R2 Grade Mine Production Profile Mineral Reserve Case. Not Including Inferred Mineral Resources or Non-Resource Upside
  19. 19. 19 Nameplate capacity of 6,000 tpd (2.16 Mt/a) based on 78% plant utilization. 60% of nameplate scheduled for December 31, 2016 (commercial production) and 100% for June 2017. Expansion to 7000 tpd (2.52 MT/a) is scheduled for 2018 based on 83.5% utilization and +2% throughput. Large Diamond Recovery (“LDR”) through TOMRA XRT. Flow sheet: • Primary jaw crushing to < 230mm • Twin DMS circuits at +1mm -19mm • LDR circuit at +19mm -45mm, scalable to -60mm • Oversize +45mm to secondary cone crusher • LDR and DMS tails +6mm -19mm to tertiary High Pressure Grinding Rolls Thickening and centrifugal treatment of fines and tails to create a truckable product for dry-stack disposal. Diamond Processing Plant
  20. 20. 20 Ramp Up Schedule 35,154 82,005 108,000 126,000 135,000 145,801 162,000 171,000 180,000 180,000 180,000 - 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 180,000 200,000 M10-2016 M11-2016 M12-2016 M1-2017 M2-2017 M3-2017 M4-2017 M5-2017 M6-2017 M7-2017 M8-2017 MILLFEED(T) Process Plant Ramp Up 100% Nameplate Capacity Commercial Production 60% Nameplate Capacity for 30 days
  21. 21. 21 Key Assumptions and Valuation Jan 2013 Opt. Study, before Stream1,2 2016 Mine Plan Update, after Stream1,2 Mining Parameters Reserve Carats (M) 17.9 22.3 Tonnes Processed (M) 23.8 33.4 Recovered Grade (cpht) 75 67 Average Ore Recovery (%) 83% 86% Average Mining Dilution (%) 18% 15% Processing Rate (Mtonnes/annum) 2.2 2.2 to 2.5 Mine Life (years) 11 14 Cost Parameters Initial Cap-ex (C$M)3 $793 ($811)6 $775 LOM Cap-ex (C$M)3 $1,013 $1,045 Diesel Price (C$/litre) $1.14 $1.00 LOM Op-ex (C$/tonne)4 $57.63 $56.20 LOM Op-ex (C$/carat)4 $76.63 $84.37 Revenue Parameters4 Gross Revenue (C$M) $4,268 $5,565 Net Revenue (C$M) $4,069 $4,555 Marketing Costs 2.70% 1.80% DIAQUEM Royalty 2.00% 2.00% Cash Operating Margin (C$M) $2,693 $2,677 % Operating Margin 67% 59% Cash Operating Margin (C$/carat) $151 $120 Income Tax and Mining Duties (C$M) $625 $698 After Tax Net Cash Flow (C$M) $1,084 $1,105 Diamond Price Parameters Average Price of Reserve (US$/carat)5 $180 $155 Diamond Price Escalation 2.50% 2.50% Exchange rate 1C$=1US$ 1.35C$=1US$ Schedule Parameters Effective Date for NPV Calculation Jan. 1 2013 Jan. 1 2016 Plant Commissioning Commences Dec. 1 2015 Oct. 1 2016 Commercial Production Declared June 1 2016 Dec. 31 2016 Jan 2013 Opt. Study, before Stream1,2 2016 Mine Plan Update, after Stream1,2 Pre-Tax After Tax Pre-Tax After Tax NPV5% $894 $537 $1,558 $1,113 NPV7% $683 $391 $1,349 $974 Notes 1. March 2016 study shown net of the July 2014 Renard Streaming Agreement, Diaquem royalty and marketing costs in terms of net revenue, Cash Operating Margin and NPV. For further information on the Renard Streaming Agreement see the Stornoway Annual Information Form dated March 30, 2016 2. January 2013 Optimization expressed in October 2012 terms. March 2016 Updated Mine Plan expressed in December 2015 terms. 3. Expressed in nominal terms, and excluding Renard Mine Road capital of $69.4 million. 4. Expressed in real terms. 5. Represents the average price per carat of the Mineral Reserve before escalation, comprising Renards 2,3 & 4 expressed in May 2011 terms in the case of the January 2013 Optimization Study, and Renards 2, 3, 4 & 65 expressed in March 2016 terms in the case of the March 2016 Mine Plan Update. 6. Initial Capital Cost in the January 2013 Optimization Study was estimated at $793 million based on $752 million of cost and contingency plus $41 million escalation allowance. In April 2014, prior to the commencement of construction, Initial Capital was estimated at $811 million based on $754 million of cost and contingency plus $57 million of escalation. The estimate of $775 million of Initial Capital in the March 2016 Updated Mine Plan includes all costs, contingencies and escalation allowances and represents a reduction of $36 million on the April 2014 estimate. 7. Net-present valuations are presented net of all royalties, costs incurred under the Mecheshoo Agreement and, in the case of the March 2016 Updated Mine Plan, the effective revenue impairment associated with the Renard diamond streaming agreement, and on an un-levered basis. Valuation Parameters (C$)7
  22. 22. 22 Jan 2013 Opt. Study, before Stream1,2 2016 Mine Plan Update, after Stream1,2 Total Operating Cost (C$M)3 $1,352 $1,878 Ore Production (Mt) 23.8 33.4 Diamond Production (Mct) 17.9 22.3 Production Cost C$57.63/t C$56.20/t C$76.63/ct C$84.37/ct Total Gross Revenue (C$M) $4,268 $5,565 Total Net Revenue (C$M) $4,069 $4,555 Marketing Costs (%) 2.7% 1.8% DIAQUEM Royalty (%) 2.0% 2.0% Cash Operating Margin (C$M) $2,693 $2,677 % Operating Margin 67% 59% Operating Margin (C$/ct) $151.05 $120.04 Life of Mine Operating Parameters $97 , 5% $613 , 33% $568 , 30% $600 , 32% Operating Expenses (C$M and % of OPEX) Open Pit Mine Underground Mine Concentrator G&A and Infrastructure $0 $50 $100 $150 $200 2016 2018 2020 2022 2024 2026 2028 2030 Operating Expenses (C$M) G&A and Infrastructure Concentrator Underground Mine Open Pit Mine Notes 1. March 2016 study shown net of the July 2014 Renard Streaming Agreement, Diaquem royalty and marketing costs in terms of net revenue, Cash Operating Margin and NPV. For further information on the Renard Streaming Agreement see the Stornoway Annual Information Form dated March 30, 2016 2. January 2013 Optimization expressed in October 2012 terms. March 2016 Updated Mine Plan expressed in December 2015 terms. 3. Expressed in December 2015 real terms.
  23. 23. 23 Operating Cost Estimate Waterfall From November 2011 Feasibility Study to March 2016 Updated Mine Plan $54.71 $2.92 -$3.79 $2.36 $56.20 $0 $10 $20 $30 $40 $50 $60 FS Nov 2011 OS Jan 2013 LNG FS Oct 2013 Updated Mine Plan Mar 2016 Current Mar 2016 Cash Operating Cost/Tonne (C$) $84.37 $5.04 $70.27 $6.36 $12.78 $0 $10 $20 $30 $40 $50 $60 $70 $80 $90 FS Nov 2011 OS Jan 2013 LNG FS Oct 2013 Updated Mine Plan Mar 2016 Current Mar 2016 Cash Operating Cost/Ct (C$) Notes: Expressed in December 2015 real terms
  24. 24. 24 Capital Expenditures Project Costs of $548.5 million Committed or Incurred to Dec 31 2015 Initial Capital Site Preparation & General $ 45.1 Mining $ 57.1 Mineral processing plant $ 137.7 Onsite utilities and infrastructures $ 111.1 Network and Distribution $ 15.9 Offsite utilities and infrastructures $ 0.3 Pre-production and Ramp-up $ 88.5 Project indirect costs $ 153.9 Professional Services $ 44.6 Construction indirect costs $ 38.5 Contingency $ 57.5 Escalation $ 25.3 Total Initial Capital $ 775.4 Sustaining and Deferred Capital Open Pit $ 16.1 Underground $ 222.5 Process Plant $ 12.5 Admin. & Infrastructure $ 3.7 Power Plant and Airport $ 13.7 Total Sustaining/Deferred Capital $ 268.5 Total LOM Capital $ 1,045 $- $10 $20 $30 $40 $50 $60 $70 $80 $90 $100 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Capital Costs, 2016 to 2030 (C$M) Initial Capital Underground Open pit Power Plant & Airport Adm. & Infra. Process plant Notes: expressed in December 2015 nominal terms and excluding Renard Mine Road capital of $69.4 million. Totals may not add up due to rounding. Sustaining and Deferred Capital Costs (C$M and %) Open pit Process plant Adm. & Infra. Power Plant & Airport Underground 2016 Initial Capital equals $282 million
  25. 25. 25 Initial Capital Cost Estimate Waterfall From November 2011 Feasibility Study to March 2016 Updated Mine Plan $1,045.0 $2.9 $994.4 $18.5 $35.0 $500 $600 $700 $800 $900 $1,000 $1,100 FS Nov 2011 OS Jan 2013 LNG FS Oct 2013 Updated Mine Plan Mar 2016 Current Mar 2016 Renard LOM Capex (C$ millions) Including Contingencies and Escalation $775.4 $61.9 $35.6 $859.1 $1.9 $11.9 $500 $550 $600 $650 $700 $750 $800 $850 $900 FS Nov 2011 OS Jan 2013 LNG FS Oct 2013 Execution Plan Apr 2014 Updated Mine Plan Mar 2016 Current Mar 2016 Renard Initial Capex (C $millions) Including Contingencies and Escalation 11 Year Mine Life 14 Year Mine Life Notes: Expressed in December 2015 nominal terms and excluding Renard Mine Road capital of $69.4 million. Totals may not add up due to rounding.
  26. 26. 26 Financial Analysis Methodology & Assumptions The Financial Analysis of the Updated Renard Mine Plan is based on the following assumptions: • Commercial production January 1st, 2017, 14 year Mineral Reserve Based life of mine; • “Spot” diamond pricing based on the March 2014 WWW base case diamond price models for Renard 2, 3, 4 and 65 adjusted based on an estimated -19% world average rough diamond price decrease between March 2014 and March 2016; • Diamond price escalation of 2.5% per annum from March 2016 until the end of 2028. • Flat C$/US$ exchange rate of C$1.35 per US$; • 15 week cycle between production and sales, 10 sales per year; and • Real terms operating costs, revenue and cash flow, nominal terms capex. NPV 7% is C$974 million after-Tax, C$1,349 million Pre-Tax. • Effective date is January 1, 2016. • NPV is calculated after the Diaquem Royalty, the effective revenue impairment of the Renard Streaming Agreement, and costs associated with the Mecheshoo Agreement, and on an unlevered basis. • Given that much of the capital cost is now sunk, current estimates of internal rate of return (IRR) and payback period are not considered meaningful. Not considered in the Financial Analysis: • 13.4 mcarats of Inferred Mineral Resources (24.5 mtonnes at 54 cpht) and 33.0 to 71.1 mcarats of non-resource exploration upside (76.2 to 113.2 mtonnes at grades ranging from 25 to 168 cpht). • Large diamond recovery. • Additional plant utilization above 83.5% (achieved at 7,000 tpd or 2.52 Mtonnes/a).
  27. 27. 27 Diamond Price Assumptions Average life-of-mine pricing is US$185/ct or C$250/ct, or US$159/ct or C$214/ct after stream. • The Financial Analysis assumes a 2.5% real terms diamond price escalation between 2016 abnd 2028 • The Renard Streaming Agreement includes a payment of US$56 per carat on 20% of ROM production from Renards 2,3,4,9 and 65, Life-of-mine, escalating at 1% per annum after the 3rd anniversary of production, inclusive of marketing costs. The weighted average price of the March 2016 Probable Mineral Reserve is US$155/ct, or C$209/ct, in March 2016 terms Body March 2014 Diamond Price Model1 (US$/carat) Estimated Market Price Adjustment March 2014 to March 2016 Adjusted Price Estimates March 2016: “Spot” Price Models2 (US$/carat) Renard 2 $197 (High $222, Min $178) -19% $160 (High $181, Min $145) Renard 3 $157 (High $192, Min $146) $128 (High $156, Min $119) Renard 4 $106 ($155)3 (High $174, Min $100) $86 ($126)3 (High $141, Min $81) Renard 65 $187 (High $190, Min $160) $152 (High $155, Min $130) Notes 1. As determined WWW International Diamond Consultants Ltd. at a +1 DTC sieve size cut off. 2. As determined by applying the world average rough price index of roughrices.com to the March 2014 price models, at a +1 DTC sieve size cut-off. 3. Should the Renard 4 diamond population prove to have a size distribution equal to the average of Renard 2 and 3, WWW have estimated that a base case diamond price model of US$155 per carat would apply based on March 2014 pricing, equivalent to US$126 per carat on a market price adjusted basis to March 2016.
  28. 28. 28 Revenue Waterfall From January 2013 Optimization Study to March 2016 Updated Mine Plan $4,555 $800 $773 $4,069 $260 $574 $1,225 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 OS Jan 2013 Stream Impact Spot Diamond Pricing Addition of R65 Addition of R2 to 710m Depth Exchange Rate Updated Mine Plan Mar 2016 Net Revenue (C$ millions) Notes: Revenue is net of royalties, marketing costs, and (for the March 2016 Updated Mine Plan) the July 2014 Renard Streaming Agreement
  29. 29. 29 Financial Analysis Cash Flow Notes: Expressed in real terms. Payables and cash as of December 31, 2015 are included in 2016 Net FCF ($200) $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 ($50) $0 $50 $100 $150 $200 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Net Free Cash Flow (C$ millions) Net FCF Cumulative Net FCF
  30. 30. 30 Financial Analysis Valuation Sensitivities 80% 90% 100% 110% 120% Revenue $621 $799 $974 $1,144 $1,313 Operating Cost $1,104 $1,038 $974 $906 $837 Capital Cost $1,037 $1,004 $974 $941 $909 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 AfterTaxNPV7% (C$Million) Revenue Operating Cost Capital Cost 80% 90% 100% 110% 120% Revenue $784 $1,065 $1,349 $1,629 $1,913 Operating Cost $1,572 $1,459 $1,349 $1,236 $1,123 Capital Cost $1,440 $1,392 $1,349 $1,302 $1,255 $0 $500 $1,000 $1,500 $2,000 $2,500 PreTaxNPV7% (C$Million) Revenue Operating Cost Capital Cost
  31. 31. 31 Financial Analysis After Tax Valuation Sensitivities: Diamond Price Assumptions Notes 1. Grey shading presents base case assumption 2. Represents “High” and “Minimum” sensitivities based on alternate interpretations of diamond quality and potential value when estimating a ‘Base” diamond price model. High, Base and Minimum models are from the March 2014 WWW diamond pricing exercise, adjusted by -19% by Stornoway applying the world average rough price movement between March 2014 and March 2016 (as published by Roughprices.com which is based, in large part, on WWW market assortments) to the March 2014 diamond price models (Table 19-3). The choice of “Minimum” and “High” to describe the sensitivity limits is deliberate: in the view of WWW International Diamond Consultants it is highly unlikely that an actual diamond price achieved for each kimberlite ore body upon production would fall below the “Minimum” sensitivity, but it is possible that the actual diamond price achieved may be higher than the “High” sensitivity, which is not a maximum price. 3. Represents the March 2014 WWW base case diamond price models, with no diamond price escalation. Real C$ 000, After Tax Diamond Price Scenarios2 0.0% 3.0% 5.0% 7.0% 8.0% 10.0% WWW High $1,902 $1,526 $1,329 $1,166 $1,095 $970 WWW Base $1,604 $1,281 $1,113 $974 $913 $806 WWW Low $1,324 $1,058 $919 $803 $753 $664 March 2014 No Escalation3 $1,672 $1,357 $1,191 $1,052 $991 $884 Real C$ 000, After Tax Diamond Price Escalation Rate 0.0% 3.0% 5.0% 7.0% 8.0% 10.0% 0.00% $1,207 $974 $851 $749 $704 $625 1.25% $1,398 $1,122 $978 $858 $805 $713 2.50% $1,604 $1,281 $1,113 $974 $913 $806 3.75% $1,825 $1,452 $1,258 $1,098 $1,028 $905 5.00% $2,070 $1,641 $1,418 $1,234 $1,154 $1,014
  32. 32. 32 Financial Analysis After Tax Valuation Sensitivities: F/X and Energy Costs Real C$ 000, After Tax Exchange Rate $1.35 C$/US$ 0.0% 3.0% 5.0% 7.0% 8.0% 10.0% $1.49 90% $1,889 $1,518 $1,324 $1,162 $1,092 $969 $1.42 95% $1,738 $1,393 $1,213 $1,063 $998 $883 $1.35 100% $1,604 $1,281 $1,113 $974 $913 $806 $1.28 105% $1,480 $1,179 $1,022 $891 $835 $735 $1.22 110% $1,366 $1,084 $937 $815 $762 $669 Real C$ 000, After Tax Energy 0.0% 3.0% 5.0% 7.0% 8.0% 10.0% 80% $1,647 $1,318 $1,146 $1,004 $942 $833 90% $1,625 $1,300 $1,130 $989 $927 $819 100% $1,604 $1,281 $1,113 $974 $913 $806 110% $1,580 $1,261 $1,095 $957 $897 $792 120% $1,557 $1,242 $1,077 $941 $882 $777 Notes 1. Grey shading presents base case assumption
  33. 33. 33 Financial Analysis After Tax Valuation Sensitivities: OPEX, CAPEX Real C$ 000, After Tax OPEX 0.0% 3.0% 5.0% 7.0% 8.0% 10.0% -20% $1,801 $1,445 $1,259 $1,104 $1,037 $918 -10% $1,701 $1,362 $1,185 $1,038 $974 $862 0% $1,604 $1,281 $1,113 $974 $913 $806 10% $1,502 $1,197 $1,038 $906 $849 $748 20% $1,397 $1,111 $961 $837 $783 $689 Real C$ 000, After Tax CAPEX 0.0% 3.0% 5.0% 7.0% 8.0% 10.0% -20% $1,663 $1,343 $1,176 $1,037 $976 $870 -10% $1,631 $1,310 $1,143 $1,004 $943 $837 0% $1,604 $1,281 $1,113 $974 $913 $806 10% $1,573 $1,249 $1,081 $941 $880 $773 20% $1,542 $1,218 $1,049 $909 $848 $741 Notes 1. Grey shading presents base case assumption. OPEX in December 2015 real terms. CAPEX in December 2015 nominal terms
  34. 34. 34 Financial Analysis After Tax Valuation Sensitivities: Gross Revenue and Grade Real C$ 000, After Tax Gross Revenue2 0.0% 3.0% 5.0% 7.0% 8.0% 10.0% -20% $1,067 $838 $719 $621 $578 $503 -10% $1,336 $1,061 $917 $799 $747 $656 0% $1,604 $1,281 $1,113 $974 $913 $806 10% $1,865 $1,496 $1,304 $1,144 $1,074 $951 20% $2,128 $1,712 $1,494 $1,313 $1,234 $1,095 Real C$ 000, After Tax Grade 0.0% 3.0% 5.0% 7.0% 8.0% 10.0% -20% $1,119 $880 $756 $654 $609 $532 -10% $1,363 $1,082 $937 $816 $763 $671 0% $1,604 $1,281 $1,113 $974 $913 $806 10% $1,840 $1,476 $1,286 $1,127 $1,058 $937 20% $2,079 $1,671 $1,458 $1,281 $1,204 $1,067 Notes 1. Grey shading presents base case assumption. 2. Gross Revenue represents the potential of Large Diamond Recovery resulting in an achieved $/carat sales result above plan. NPV (7%) valuations are after tax, after stream, and unlevered.

×