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BUILDING QUÉBEC’S FIRST DIAMOND MINE
Scotiabank Mining Conference, Thursday November 29th, 2012
Matt Manson President, CEO & Director
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 “forward-looking 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) capital costs and operating costs; (v) mine
expansion potential and expected mine life; (vi) expected time frames for completion of permitting and regulatory approvals and making a
production decision; (vii) future exploration plans; (viii) future market prices for rough diamonds; and (ix) 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 ability to achieve 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) estimated completion date for the Environmental and Social Impact Assessment; (ii) required capital investment
and estimated workforce requirements; (iii) estimates of net present value and internal rates of return; (iv) receipt of regulatory approvals on
acceptable terms within commonly experienced time frames; (v) the assumption that a production decision will be made, and that decision will be
positive; (vi) anticipated timelines for the commencement of mine production; (vii) anticipated timelines related to the Route 167 extension and the
impact on the development schedule at Renard; (viii) anticipated timelines for community consultations and the conclusion of an Impact and
Benefits Agreement; (ix) market prices for rough diamonds and the potential impact on the Renard Project’s value; and (x) future exploration plans
and objectives. Additional risks are described in Stornoway's most recently filed Annual Information Form, annual and interim MD&A, 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.
3
Stornoway Diamond Corporation TSX:SWY
Renard
Diamonds
Strong Base Case Economics
World Class Resource Upside
All-Season Access Road Under Construction
Permitting Nearing Completion
Excellent Long Term Supply & Demand Fundamentals
Few New Mining Projects
100% Ownership in Renard, Québec’s First
Diamond Mine
The World’s Most Advanced New Diamond
Project Under Development
On Track for Construction Start-up in 2013
4
MAJOR SHAREHOLDINGS*
12 MONTH ANALYST TARGETS Market Capitalization: (based on voting and non-voting shares)
C$ 100 million
Total Shares Outstanding: (Basic and Non-voting convertible shares)
162 million
Total Options & Warrants Outstanding: 31 million
Cash and Short Term Deposits: (as of July 31st 2012)
C$ 41 million
Debt: ($100m Standby Facility with IQ undrawn)
C$ 20 million
IQ** (common shares)
(non-voting convertible shares)
25.0%
-------- 33.7%
Agnico-Eagle 10.6% 8.9%
Caisse de dépôt et placement du
Québec
9.0%
(est)
7.5%
(est)
Float 55.4% 49.9%
Fully
Diluted Basic
RBC Des Kilalea,
November 5th 2012
Outperform-
Speculative Risk $2.05
Paradigm David Davidson
Nov 17th 2011
Buy $3.15
BMO Ed Sterck
November 15th 2012
Market Perform $1.00
Desjardins Brian Christie
November 15th 2012
Speculative Buy $1.70
Laurentian Eric Lemieux
November 16th 2012
Buy $2.75
National Bank Eldon Brown
October 31st 2012
Outperform-
Speculative Risk $2.00
BALANCE SHEET*
Notes: Debt Facility: In December 2010, Stornoway announced a $100 million Credit Support Agreement with a subsidiary of Société générale de financement du Québec, now Investissment
Québec, with respect to future project debt financing. The Credit Support Agreement has an annual commitment fee of 175 bps undrawn, and will take the form of a direct project loan ranking
pari passu with concurrent senior lenders or, as appropriate, on a stand alone basis on terms no less favourable than prevailing commercially reasonable market terms.
*Based on market close of $0.60 on November 23rd 2012
**IQ: Investissement Québec, the Québec government's industrial and financial holding company whose mission is to foster the growth of investment in Québec, thereby contributing to
economic development and job creation in every region
Stornoway’s Platform for Project Development and Financing
5
Lynx
R10
N
R7
R1 Hibou
R4
R9 R2
R3
R65
R8
Kimberlite Bodies with
Probable Reserves
Hibou
Lynx
R4
R9 R2
R3
R65
Kimberlite Bodies with
Resource Potential
R1 Hibou
Lynx
Legend
Stornoway Properties
HydroQuébec Facility
Renard Kimberlites
Kimberlitic Dyke
Regional Kimberlites
HydroQuébec
Powerlines
Route 167 Extension
Road
Exploration/ Mining
Projects
LEGEND:
0 1 2
Kilometers
60 0 60 120
Kilometers
Renard
LG3 LG2 LG4
Laforge 1
Laforge 2
Brisay
Foxtrot Property
Strateco
Eastmain Mine Western Troy
Troilus Mine
Eleonore
Temiscamie
Mistissini
Chibougamau Matagami
Wemindji
Renard Kimberlite Bodies
Kimberlite Bodies with
Inferred Resources
6
On Nov. 15th Stornoway announced that it will assume the
completion of segments C and D of the Route 167
Extension as a single track, mining grade road.
Québec will provide up to $85m of financing, on an
unsecured and subordinated basis.
All season access to Renard is now scheduled for Q4 2013.
The Route 167 Extension A Canadian Diamond Project with Road Access.
Renard
Segments C & D
Stornoway
97km of Mining
Grade Road
(50km/hr)
Segments A & B
Ministry of Transport
143km of Regional
Highway (70km/hr) Construction, September 2012
7
Key Project Parameters
24 mcarat Indicated Mineral Resource
17 mcarat Inferred Mineral Resource
24-49 mcarat Exploration Upside
November 2011 Feasibility Study*
Mine Life 11 years
Mineral Reserve 18 mcarats
Initial Cap-ex $802m
Operating Cost $55/t ($70/carat)
Operating Margin 68%
Operating Cash Flow $2.7B
Diamond Valuation $180/carat
Peak Diamond Production 2.1 mcarats/yr
After Tax NPV (7%; Jan 1 2012) $376m
After Tax IRR 14.9%
Project Startup July 2015
Long Term Plan (Basis of December 2011 ESIA)
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
*Key Assumptions: C$1=US$1, Oil US$90/barrel, 2.5% real terms diamond price growth
Q311-Q425, 83.5% ore recovery, 19.4% mining dilution, 0cpht dilution grade, January 1
2012 effective date for NPV and IRR calculation.
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.
Renard 4
53/44cpht Renard 9
47cpht
Renard 65
29cpht
Renard 2
103/118cpht
Renard 3
106/118cpht 0m
100m
200m
400m
600m
710m
500m
300m
8
2008 model 2010 (and current) model 0m
100m
200m
400m
600m
710m
500m
300m
Resource Model
The Renard kimberlites are “transitional”
with discrete phases of TKt & HKt/TKt
Geology, grade and dilution models are
based on: 88,585m of core drilling from surface
2,382 m of underground drilling
6,151m of reverse circulation (RC) drilling
780 m of underground drifting
+2,000 petrographic thin sections
4,563 tonnes of underground bulk samples
3,520 tonnes of surface trench bulk samples
903 tonnes of RC chip samples
154 tonnes of drill core samples
9,212 carats of recovered diamonds +1 DTC
View looking North
Establishing the Geological Model at Renard Drilling Renard 2 & 3 at Depth (2009)
2009 Drill Program
2009 drill program revealed a much larger
volume of kimberlite at depth than
previously realised, tripling the overall
Mineral Resource.
Each kimberlite remains open at depth.
Renard 2 Renard 3
9
The Feasibility: 11
years of mining
Permitting and Long
Term Business Plan
The Vision: Deposit still
Open
40
60
80
100
120
140
Millions
of Tonnes
20
0
Exploration Target High Range
Inferred Resource
Exploration Target Low Range
Probable Reserve
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.
Renard’s Resource Upside A Project with a Long Resource Tail and Very Long Mine Life Potential
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.
Renard 4
53/44cpht Renard 9
47cpht
Renard 65
29cpht
Renard 2
103/118cpht
Renard 3
106/118cpht 0m
100m
200m
400m
600m
710m
500m
300m
10
Renard 2
Renard 3
Renard 9
Renard 4
Renard is Continuing to Grow Renard 65 Bulk Sample: Expansion in the Project Reserve
Stornoway commenced a 5,000 tonne bulk sample at
Renard 65 in July 2012.
The objective is the recovery of a 1,000 carat parcel of
diamonds for valuation, to allow conversion of Inferred
Resources to Reserve.
Renard 65 currently contains:
• 3.7 mcarats of Inferred Mineral Resources
(12.9mtonnes at 29 carats per hundred tonnes)
• 6.8 to 13.7 mcarats of Exploration Target (29.5 to 41.6
mtonnes at 23 to 33 cpht)
Renard 65 has a good potential to return large diamonds.
Results are expected in Q1 2013.
A 4 carat, top quality diamond
recovered from Renard 65 drillcore
Renard 65
R65 Pit on September 2nd
11
Mine Plan A Combined Open Pit and Underground Mine
Open Pit Mining (years 1-2).
Underground Mining (years 3-11).
Underground method: Blast Hole
Shrinkage with waste backfill from pits.
6,000 tpd plant capacity, (2.2mt/annum)
Pit at Renard 65 (initially) as a borrow-
pit and waste water sump, pending
resource conversion.
Post-feasibility optimization study is
ongoing to address opportunity for cap-
ex reduction through shaft deferral. Renard 4
Renard 2
Renard 3
Renard 65
Renard 2
Renard 3
12
General Project Arrangement Small Project Footprint of 3.1km2, Modest Environmental Impact
Processed Kimberlite
Containment (PKC)
Overburden
Stockpile
Waste Rock
R2-R3
Ore Stockpile
R65
Camp
Plant
Route 167 Extension
13
Renard’s Diamonds Valuation Conducted by WWW International Diamond Consultants Ltd. May 8th-13th, 2011
Renard kimberlite pipes have a diamond population with a coarse size distribution
and high proportion of large white gems. Lynx and Hibou kimberlite dykes have a
finer distribution of browner stones.
99% by weight gem/near-gem quality. 1% industrial quality boart.
Coarse size distribution: potential for significant “Specials”, not accounted for in the
current resource work. (Three to six 50-100ct stones and one to two +100ct stones
every 100,000 carats.)
Kimberlite
Body
Size of
Valuation
Sample (carats)
Largest
Diamonds
Recovered (carats)
May 2011
Diamond Price (US$/carat)1
Sensitivities (Minimum to
High)
Renard 2 1,580 15.46, 8.80, 8.42 $182
$163 to $236
Renard 3 2,753 10.15, 7.78, 6.36 $153 to $205
Renard 4 2,674 5.92, 5.74, 3.99 $1122 $105 to $185
1Based on an average of five independent valuations conducted between May 9th and 13th 2011, and
supervised by WWW International Diamond Consultants Limited. 2The Renard NI 43-101 compliant Mineral Resource of January 2011 and the Feasibility Study of November
2011 utilize a higher diamond price based on an analysis of diamond breakage and poor plant recovery of the
Renard 4 valuation sample, which is $164/carat. All samples utilize a +0.85mm (+1 DTC) cutoff
10.15 carat gem
quality
octahedron
Renard 3 Bulk Sample Stones larger than 2 carats. “Run of Mine”
14
Feasibility Mine Plan Production Schedule and Cash Flow
-
500
1,000
1,500
2,000
2,500
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
Open Pit & Underground Mining Schedule (Ktonnes of Ore)
R4 UG
R3 UG
R2 UG
R3 Pit
R2 Pit
-
500
1,000
1,500
2,000
2,500
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
Carat Production (Kcarats)
R4
R3
R2
-
100.0
200.0
300.0
400.0
500.0
600.0
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
Gross Revenue (C$M, Real)
R4
R3
R2
15
Renard will Make Stornoway a Significant Diamond Producer
Source: Kimberly process, Company Reports and SWY Estimates
1 De Beers (Anglo/Botswana) $6,420m
2 Alrosa (Russia) $4,660m
3 BHPB (ASE: BHP) $940m
4 Rio Tinto (ASE: RIO) $910m
5 Peak Stornoway (TSX: SWY) $380m
6 Harry Winston (TSX: HW) $350m
7 Gem (L: GEMD) $340m
8 Petra (L: PDL) $250m
Others $2,160m
De Beers 39%
Alrosa 28%
BHPB 6%
Rio Tinto 6%
Peak Stornoway
2%
Harry Winston 2%
Gem 2%
Petra 2%
Others 13%
2011 World Diamond
Production Data with
Renard Included at
Peak Production (2.1mcarats/yr at US$182/carat)
16
Permitting and Development Schedule
BFS (Complete)
ESIA (Complete)
Community Hearings
COMEX and CEAA Review
Specific Mine Permits (50)
Detailed Engineering
Project Financing
Road Construction
Mine Construction
Commissioning and Ramp-up
Commercial Production
2011
2H 2H 2H 2H 2H 1H 1H 1H 1H
2012 2013 2014 2015
First Vehicle Access
Following Stornoway’s November
14th Agreement with Québec, first
road access is expected to Renard by
Q4 2013 compared to July 2013 in the
November 2011 Feasibility Study
17
12 Months of Milestones Achieved Moving Forward with Québec’s First Diamond Mine
Social Licence
Permitting
March 2012: IBA (“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.
December 2011: ESIA Submitted.
June-August 2012: Successful Québec and federal public
hearings in Mistissini and Chibiugamau.
October 2012: Mining license issued.
Certificate of Authorization expected by end 2012.
Financing
March-May 2012: $40m debt/equity raised for pre-
development program.
Sept 2012: Mandate Letter and Draft Term Sheet
announced for $475m project debt financing with
seven commercial lenders.
18
What to Expect
Significant Development and Financing
Milestones in the next 12 months
Completion of Project Permitting • Certificate of Authorization in Q4 2012
Capital Cost Optimization • Shaft/Ramp Tradeoff Study Q4 2012
Reserve Growth through R65 • Results Q1 2013
Completion of Project Financing • Completion of Project Debt Financing Announced on
September 6th 2012
• Balance on “Minimum Capital/Minimum Equity” Terms
Stornoway is Targeting Construction
Mobilization in 2013
19
0%
100%
200%
300%
400%
500%
600%
6-S
ep-9
5
6-M
ar-
96
6-S
ep-9
6
6-M
ar-
97
6-S
ep-9
7
6-M
ar-
98
6-S
ep-9
8
6-M
ar-
99
6-S
ep-9
9
6-M
ar-
00
6-S
ep-0
0
6-M
ar-
01
6-S
ep-0
1
6-M
ar-
02
6-S
ep-0
2
6-M
ar-
03
6-S
ep-0
3
6-M
ar-
04
6-S
ep-0
4
6-M
ar-
05
6-S
ep-0
5
6-M
ar-
06
6-S
ep-0
6
6-M
ar-
07
6-S
ep-0
7
B
A. 1994-1995 – Discovery of A21, A154S, A154N, A418 pipes
B. July 1995 – Bulk Sample Completed
B. September 1996 – Pre-Feasibility Completed
C. July 1999 – Announces equity financing of $100.0m with Tiffany and Co and Off-Take Deal
E. July 1999 – Feasibility Completed
F. November 1999 – Principal Permits Received
G. December 2000 – Sells minority stake in Snap Lake Project to De Beers for $173.00 mm,
H. November 2001 – Bank financing of $230.0 m
I. January 2003 – First Production
A
C
D E
H
I
Post Financing,
De-Risking Phase
Aber Diamond Corporation Stockprice Index Sept. 95 to Sept. 07
Production
G
F SWY December 2008 to August 2012
Discovery/
Resource
Growth
Pre-Feas/
Feas Post-Feas
Pre-Financing
Low Point
Why Invest in Stornoway? The Lassonde Curve: Value Creation through Project Financing and Development
4x Return
1999-2004
Stornoway’s
Objective is to Build
Shareholder Value by
Building Renard
20 20
Appendix 1: The Diamond Market
21
Diamond Jewelry Demand is Forecast to Grow Dramatically
Share of World Diamond Jewelry Market, 2005 to 2020
US 49%
Japan 14%
Europe 10%
India (and Asia-
Arabia) 13%
China (and Asia-
Pacific) 10%
Others 4%
2005: $62B
US 42%
India (and Asia-Arabia)
18%
China (and Asia-Pacific)
15%
2010: $74B
US 27%
India (and Asia-Arabia)
25%
China (and Asia-Pacific)
32%
2020F: $128B
Source: AllanHochtreiter after De Beers, Tacy Ltd.,
1 CAGR estimates after Alrosa October 2011. Nominal Terms
Diamond Jewelry
CAGR of 5.6%1
2010-2020
Rough Diamond
CAGR of 10%1
2010-2020
22
Major Diamond Mines and Development Projects Worldwide Few Enough Mines to Fit on One Map
South Africa
• Venetia (De Beers)
• Finsch, Premier (Petra Diamonds)
• Lace (DiamondCorp)
Tanzania
• Williamson (Petra Diamonds)
Russia
• Arkhangelsk District (Alrosa)
• Yakutia District (Alrosa)
• Grib (LUKOIL)
India
• Bundar (Rio Tinto)
Australia
• Argyle (Rio Tinto)
• Ellendale (Gem Diamonds)
Canada
• Ekati (BHPB)
• Diavik (Rio Tinto/Harry Winston)
• Victor, Snap Lake, Gahcho Kue (De Beers)
• Renard (Stornoway)
• Star (Shore Gold/Newmont)
Botswana
• Jwaneng, Orapa (De Beers)
• Gope (Gem Diamonds)
• AK6 (Lucara Diamonds)
Angola
• Catoca (Alrosa)
Democratic Republic of Congo
• Mbuyi-Mayi
Sierra Leone
• Koidu, (Steinmetz Group)
Lesotho
• Letseng (Gem Diamonds)
• Kao (Namakwa Diamonds)
• Liqhobong (Firestone)
• Mothai (Lucara)
23
Global Rough Diamond Production (MMct)
0
20
40
60
80
100
120
140
160
180
200
2006
A
2007
A
2008
A
2009
A
2010
A
2011
E
2012
E
2013
E
2014
E
2015
E
2016
E
2017
E
2018
E
2019
E
Ct M
M
Angola Australia Botswana Canada DRC Namibia Russia South Africa Zimbabwe Other
Almost all rough diamond production forecasts show flat or declining
production long term. Rough production may not reach 2008 levels in
carat terms again.
No large scale diamond mine has been discovered since the
discovery of EKATI and Diavik in the early 1990s. New production
from projects under development such as Renard is not expected to
materially impact overall supply.
Source: RBC Capital Markets
AK6 (LUC)
Koidu (Steinmetz)
Zimbabwe
Renard (SWY)
Gahcho Kue
(MPV, De Beers)
Star-Orion (SGF)
Future Rough Diamond Production is Forecast to be Static
Only 15% Supply
Growth
2010-2020
24
Diamond Prices are Growing Rough and Polished Diamonds Against a Basket of Indicators, 2003-April 2012
Source: LME, IMF, Rough Diamond Price data after WWW International Diamond Consultants Limited Indexed to October 2003. CAGR in Nominal Terms.
8% CAGR in
Rough Prices
2003-2012
Rough
Diamonds
+ Successive Renard Sample Valuations
25 25
Appendix 2: Feasibility Study Sensitivities
26
Feasibility Study Contributors
Capital and Operating Cost Estimates, Onsite Infrastructure Design,
Construction Strategy, Risk Assessment
Process Plant, Underground Mine Design and Underground Reserve
Open Pit Design, Open Pit Reserve and Financial Analysis
Geotechnical, Processed Kimberlite Containment, Waste Water Management
Environmental, Social and Permitting Considerations
Rock Mechanics, Hydrogeology
NI 43-101 Resource
Human Resources, Operating Plan, Marketing Plan
27
Financial Analysis Project Assumptions, Valuation and Pay-Back
Key Assumptions in the Financial Model
Mining
Parameters
Reserve Carats (m) 18.0
Tonnes Processed (m) 23.0
Recovered Grade (cpht) 78
Average Ore Recovery (%) 83.5%
Average Mining Dilution (%) 14%
Dilution Grade (cpht) 0
Processing Rate (Mtonnes/a) 2.2
Mine Life (years) 11
Cost
Parameters
Pre-Production Cap-ex (C$m) $802
LOM Cap-Ex (C$m) $994
Oil Price (US$/barrel) $90
LOM Op-ex (C$/tonne) $54.71
LOM Op-ex (C$/carat) $70.27
Revenue
Parameters
(real terms)
Gross Revenue (C$m) $4,112
Marketing Costs 2.7%
DIAQUEM Royalty 2.0%
Operating Cash Flow (C$m) $2,677
Operating Margin 68%
Total Taxes and Mining Duties (C$m) $571
After Tax Net Cash Flow (C$m) $1,151
Diamond
Price
Parameters
Renard 2 and Renard 3 (US$/carat) $182
Renard 4 (US$/carat) $164
Diamond Price Escalation, 2012-2025 2.5%
Exchange Rate 1C$=1US$
Schedule
Parameters
Effective Date for NPV Calculation January 1 2012
Construction Mobilization July 1 2013
Plant Commisioning Commences July 1 2015
Commercial Production Declared January 1 2016
Valuation Results (C$m)
Pre-Tax After Tax
NPV5% $899 $534
NPV7% (Base Case) $672 $376
NPV9% $490 $248
IRR 18.7% 14.9%
Pay-Back (years) 4.65 4.80
28
Financial Analysis Capital Costs
Capital Costs (C$m)
Site Preparation & General $22.9
Mining $236.9
Mineral processing plant $168.4
Onsite utilities and infrastructures $102.4
Owner’s Cost $86.2
Spares, fills, tools $10.2
EPCM services $45.0
Field indirect costs, vendor representatives $22.5
Construction camp & Catering $25.0
Freight and duties $8.1
Contingency $74.3
Total Pre-Production Capital $801.8
Escalation Allowance on Initial Capital $57.3
Pre-Production Revenue ($24.6)
Deferred & Sustaining Capital $138.8
Deferred Capital (Route 167 Extension) $44.0
Salvage Value2 ($22.9)
Total LOM Capital $994.4
Site Prep. & General
4% Mining 45%
Plant 32%
Onsite utilities
and infra. 19%
Direct Costs (C$531m)
Owner’s Cost 32%
Spares 4%
EPCM 17%
Field, Vendor
reps 8%
Camp 9%
Freight 3%
Conting. 27%
Indirect Costs (C$271m)
29
Operating Unit Costs (Real Terms; C$)
$/tonne
Open Pit Mine $19.99
Underground Mine $24.11
Plant $14.82
G&A $14.69
Total $54.71 ($70.27/ct)
Notes: Pit costs incurred before January 1st, 2016 are capitalized
Open Pit Mine,
$40.70 , 3%
Underground Mine, $547.90 ,
43%
Plant, $337.00 ,
27%
G&A, $334.00 ,
27%
Operating Costs (C$1,260m)
0
10
20
30
40
50
60
70
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
Operating Costs LOM
Others
Power
Labour
Financial Analysis Operating Costs
30
Financial Analysis Valuation Sensitivities
80% 90% 100% 110% 120%
Operating Cost 16.5% 15.7% 14.9% 14.0% 13.2%
Capital Cost 19.1% 16.8% 14.9% 13.2% 11.8%
Revenue 9.2% 12.2% 14.9% 17.4% 19.8%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
80% 90% 100% 110% 120%
Operarting Cost 20.7% 19.7% 18.7% 17.7% 16.7%
Capital Cost 23.7% 21.0% 18.7% 16.7% 15.0%
Revenue 11.6% 15.4% 18.7% 21.8% 24.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
80% 90% 100% 110% 120%
Operating Cost 808,813 740,372 671,932 603,487 535,040
Capital Cost 829,526 750,717 671,932 593,125 514,316
Revenue 235,672 453,813 671,932 890,040 1,108,14
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
80% 90% 100% 110% 120%
Operating Cost 463,661 419,627 375,577 331,523 287,283
Capital Cost 488,669 432,381 375,577 318,658 261,323
Revenue 94,589 236,370 375,577 513,934 651,296
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
PRE-TAX IRR
AFTER-TAX IRR
PRE-TAX NPV7%
AFTER-TAX NPV7%
31
Financial Analysis Renard Diamond Valuation. Conducted by WWW May 9th to 13th 2011
1The Renard Feasibility Study of November 2011, consistent with the NI 43-101 compliant Mineral Resource of January 2011, utilizes a higher diamond price based on an analysis of
diamond breakage and poor plant recovery of the Renard 4 valuation sample, which is $164/carat. All samples utilize a +0.85mm (+1 DTC) cutoff.
Kimberlite Body
Valuation Sample (carats)
Achieved Prices for the Valuation Samples WWW Price Modeling
Number of Independent Valuations
Average of Independent Valuations (US$/carat)
Minimum of Independent Valuations (US$/carat)
Maximum of Independent Valuations (US$/carat)
WWW Valuation
(US$/carat)
WWW Base Case Model (US$/carat)
WWW "High" Model
(US$/carat)
WWW "Minimum"
Model (US$/carat)
Renard 2 1,580 5 $173 $143 $195 $195 $182 $236 $163
Renard 3 2,753 5 $171 $137 $195 $190 $182 $205 $153
Renard 4 2,674 5 $100 $87 $107 $107 $1121 $185 $105
Conducted by WWW International Diamond
Consultants Ltd. May 9th-13th 2011
32
Kimberlite Body
WWW Base
Case Model
(US$/carat)
WWW "High"
Model
(US$/carat)
WWW
"Minimum"
Model
(US$/carat)
Renard 2 Scenario 1 (Base Case): Utilizing an R2-R3 Size Frequency Model $182 $201 $163
Scenario 2 (Alternative): Utilizing an R2 only Size Frequency Model $208 $236 $186
Renard 3 Scenario 1 (Base Case): Utilizing an R2-R3 Size Frequency Model $182 $205 $168
Scenario 2 (Alternative): Utilizing an R3 only Size Frequency Model $165 $183 $153
Renard 4 Scenario 1 (Base Case): Utilizing an R2-R3 Size Frequency Model $164 $185 $152
Scenario 2 (Alternative): Utilizing an R4 only Size Frequency Model $112 $121 $105
WWW determine High and Minimum sensitivities on their Base Case diamond price model. WWW state that
it is unlikely that an actual diamond price achieved for each kimberlite 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.
The Feasibility Study Base Case diamond price of US$182/carat for Renard 2 and 3 and US$164/carat for
Renard 4 derives from a value modeling approach that assumes a single diamond size distribution in the
three kimberlites.
An alternative interpretation, that each kimberlite’s diamond population is unique and is correctly represented
by its diamond sample, yields diamond price models of US$208/carat for Renard 2, US$165/carat for Renard
3 and US$112/carat for Renard 4.
Financial Analysis Renard Diamond Valuation Sensitivities
33
This “Alternative” diamond price model is highly accretive to the project’s valuation given the dominance of
Renard 2 in the mine plan. The interpretation of similarity in the diamond populations is the more
conservative approach.
A real-terms diamond price growth factor of 2.5% per annum has been applied between 2012 and 2025.
This is consistent with well constrained rough diamond supply and demand forecasts and industry best-
practice. WWW have advised that Stornoway’s assumptions on diamond price and diamond price growth
are “reasonable in the context of the overall supply and demand environment” of the diamond industry.
The project shows strong sensitivity to future diamond price growth.
Kimberlite Body
Pre-Tax After-Tax
NPV7%
(C$m) IRR
Pay-Back
(years) 1
NPV7%
(C$m) IRR
Pay-Back
(years) 1
WWW Minimum Model $397 14.6% 5.34 $199 11.5% 5.46
Feasibility Study Base Case Model $672 18.7% 4.65 $376 14.9% 4.80
Alternative Model $871 21.8% 4.07 $502 17.4% 4.20
WWW High Model $1,261 26.5% 3.49 $747 21.4% 3.90
Financial Analysis Renard Diamond Valuation Sensitivities
Diamond Price Escalation (2012-2025)1
Pre-Tax After-Tax
NPV7%
(C$m) IRR
Pay-Back
(years) 1
NPV7%
(C$m) IRR
Pay-Back
(years) 1
0% per annum $227 11.8% 5.80 $93 9.2% 5.91
2.5% per annum (Base Case) $672 18.7% 4.65 $376 14.9% 4.80
5% per annum $1,228 25.1% 3.87 $724 20.3% 4.00
1Calculated on an after-tax basis
1Calculated on an after-tax basis
34 34
Appendix 3: Project Comparables
35
Project Comparables Diamond Industry Cost Curve (Anglo American November 2011 after De Beers 2010)
COST/REVENUE
Ren
ard
Ren
ard
wit
h P
ow
erl
ine
2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 0
0.0
0.5
1.0
10.5
2.0
Co
st/
rev
en
ue (
x)
Cumulative revenue (US$m)
Jw
an
en
g Nam
ed
eo
op
era
tio
ns
Gah
ch
o K
ue (
dev
elo
pm
en
t p
roje
ct)
Ven
eti
a
Ora
pa
Sn
ap
lake
Dam
tsh
aa
Source: Anglo-American (After De Beers, November 2011), and Stornoway Estimates
36
Project Comparables Recent Canadian Diamond Mines Compared as of the Date of each BFS
Source: Company Reports and Stornoway Estimates. Excludes resource and diamond price upside from both projects. Excludes diamond price escalators.
Assumes similar diamond recovery and mining dilution parameters.
Ekati (1998)
BHPB, As Built
Estimates
Diavik (1999)
Rio-Tinto, As
Built Estimates
Victor (2008)
De Beers, As
Built Estimates
Renard FS
(2011)
Resource Parameters Resource (m carats) 161 133 No data 41
Resource (US$) $10B $6.7B No data $7.2B Resource Grade (cpht) 110 360 No data 72
Average Resource Diamond Price $60 $50 No data $175
Resource Mine Life 25 25 No data n/a
Reserve Parameters Reserve (carats) 72 102 6 18
Reserve (dollars) $6B $5.5B $2.4B (est) $3.2B Reserve Grade (cpht) 109 400 20 78
Average Reserve Diamond Price $84 $55 $400 $180
Average Reserve Ore Value (US$) $92 $220 $80 $140
Reserve Mine Life 17 19 12 11
Production Parameters Annual Production (mCarats) Up to 3.6 Up to 7 0.5 Up to 2.1
Annual Revenue (US$m) $302 $385 $215 $364
LOM Op-ex (Cdn$/tonne) $100 to $60 $100 No data $55
LOM Op-ex (Cdn$/carat) $92 to $55 $25 No data $70
Canadian-US Dollar c.$0.75 $0.67 c.$1.00 $1.00
Pre-Production Cap-ex (Cdn$) $900m $1.3B $982m $802m
37
Project Comparables Recent Canadian Diamond Development Projects Compared as of the Date of each BFS
Gahcho Kué FS (2010)
Mountain Province
Star-Orion FS (2011)
Shore Gold
Renard FS (2011)
Resource Parameters Resource (m carats) 61 43 41
Resource (US$) $5.1B $11B $7.2B Resource Grade (cpht) 168 12 72
Average Resource Diamond Price $85 (WWW Apr 10)
$65 (DTC Apr 10) $256 (WWW Feb 11) $175 (WWW May 11)
Resource Mine Life n/a n/a n/a
Reserve Parameters Reserve (carats) 49 34 18
Reserve (dollars) $3.7B $8.2B $3.2B Reserve Grade (cpht) 157 12 78
Average Reserve Diamond Price $75 $242 $180
Average Reserve Ore Value (US$) $118 $30 $140
Reserve Mine Life 11 20 11
Production Parameters Annual Production (mCarats) 4.5 1.7 Up to 2.1
Annual Revenue (US$m) $338 $411 $364
LOM Op-ex (Cdn$/tonne) $49 $14 $55
LOM Op-ex (Cdn$/carat) $31 $114 $70
Canadian-US Dollar 0.96 0.945 1.00
Pre-Production Cap-ex (Cdn$) $550m
($800m De Beers Dec 11) $1.9B $802m
Source: Company Reports. Excludes resource and diamond price upside from both projects. Excludes diamond price escalators. Assumes similar diamond
recovery and mining dilution parameters.
38 38
Appendix 4: Management Biographies
39
Nick Thomas Manager,
Investor Relations
Yves Perron VP Engineering
& Construction
Zara Boldt
CFO and VP
Finance
Pat Godin
COO & Director
Matt Manson
President, CEO
& Director
Michel Blouin
Independent/
IQ Designate
Yves Harvey
Independent
John LeBoutillier
Independent/
IQ Designate
Monique Mercier
Independent/
IQ Designate
Peter Nixon
Independent
Ebe Scherkus
Independent/
Board Chairman
Serge Vézina
Independent
Executive Officers
Non-Executive Directors
Key Managers
Ghislain
Poirier VP Public Affairs
Dave Skelton VP Project
Development
Brian Glover VP Asset
Protection
Martin Boucher Manager,
Sust. Dev
Guy Bourque Chief Mining
Engineer
Helene
Robitaille Director, HR
Head Office: Longueuil, Québec,
Exploration Office: North Vancouver, BC
Community Office: Mistissini, Québec
John
Armstrong Senior Geologist
Patrick Houle Manager,
Community Dev.
Stornoway’s Board and Management Team
Robin
Hopkins VP Exploration
40
Appendix: Management Biographies
PRESIDENT, CHIEF EXECUTIVE
OFFICER AND DIRECTOR
STORNOWAY DIAMOND CORPORATION
49 WELLINGTON STREET EAST, SUITE 300
TORONTO, ONT M5E 1C9
TEL. : (416) 304-1026
www.stornowaydiamonds.com TSX:SWY
Matt Manson, PhD.
Matt Manson was appointed President of Stornoway Diamond
Corporation in March 2007 following the acquisition of Ashton
Mining of Canada and Contact Diamond Corporation, and
subsequently President & CEO in January 2009.
As President & CEO, Mr. Manson is responsible for the
management of the company as a whole, playing a leadership role
in all key business units including finance and budgets, exploration,
human resources, investor relations and advanced project
development including the Renard Diamond Project.
Between 1999 and 2005 he was employed by Aber Diamond
Corporation (now Harry Winston Diamond Corporation) as VP
Marketing and subsequently VP Technical Services & Control,
during which time he participated in the US$230m project financing
for the Diavik Diamond Project and oversaw Aber's technical and
marketing operations during the feasibility, construction and early
production phases of Diavik. Between 2005 and 2007 he was
employed by Contact Diamond Corporation, formerly Sudbury
Contact Mines and a 40% owned subsidiary of Agnico-Eagle Mines
Limited, as President & COO and subsequently President & CEO.
Mr. Manson is a graduate of the University of Edinburgh (BSc
Geophysics, 1987) and the University of Toronto (MSc Geology 1989
and PhD Geology, 1996), and has over 17 years of experience in
diamond exploration, development and production.
41
CHIEF OPERATING OFFICER
AND DIRECTOR
Patrick Godin, Eng., Asc.
Pat Godin joined Stornoway as Chief Operating Officer in May 2010 and
was appointed to the Board of Directors in October 2011. He is
responsible for the development of the Renard Diamond Project in north-
central Québec, on track to becoming Québec’s first diamond mine.
Prior to joining Stornoway Diamond, Mr. Godin acted as Vice President,
Project Development for GMining Services, focused on the development
of mining projects in the Americas and West Africa, and was responsible
for the developed of the Essakane Mine in Burkina Faso under contract to
IAMGOLD.
He was previously Vice President of Operations for Canadian Royalties,
specifically heading the development of their nickel project in Northern
Québec. He was also President and General Manager of CBJ-CAIMAN
S.A.S., a French subsidiary of Cambior / IAMGOLD, holder of the Camp
Caïman gold mining project located in French Guiana. For many years, he
was involved in Cambior’s various Canadian properties in Abitibi-
Témiscamingue, through progressive management positions in project
development and mine management.
He holds a bachelor’s degree in mining engineering from Université Laval
in Québec. Mr. Godin is a member of the “Ordre des Ingénieurs du
Québec”, of the Certified Directors College and of The Canadian Institute
of Mining, Metallurgy and Petroleum (CIM). He is the Chairman of the
Board of Geomega Resources and a director of Orbit-Garant Drilling.
Appendix: Management Biographies
STORNOWAY DIAMOND CORPORATION
1111 RUE ST. CHARLES O.
LONGUEUIL, QUÉBEC J4K 4G4
TEL. : (450) 616-5555
www.stornowaydiamonds.comTSX:SWY
42
Appendix: Management Biographies
VICE PRESIDENT, FINANCE AND
CFO
STORNOWAY DIAMOND CORPORATION
980 W FIRST STREET, #116
NORTH VANCOUVER, BC V7P 3N4
TEL. : (604) 983-7750
www.stornowaydiamonds.com TSX:SWY
Zara Boldt, B.A., CGA
Zara Boldt was appointed Vice President, Finance with Stornoway
in May 2007, after serving as Stornoway’s Controller between 2004
and 2007, and Chief Financial Officer in March 2010.
As Vice President Finance and CFO, Ms. Boldt is responsible for the
management of the corporate and financial affairs of the
corporation, and for the oversight of its regulatory reporting
requirements.
Ms. Boldt has held positions of progressive responsibility with
several mineral exploration companies, in addition to severeal years
of experience with a national investment dealer. Her most recent
resource industry roles include CFO for Sherwood Copper
Corporation from May 2006 to May 2007 and Controller for the
Northair Group of Companies between May 2004 and April 2007.
Ms. Boldt is a Certified General Accountant and a graduate of the
University of Puget Sound in Tacoma, Washington. She is a director
of Troon Ventures Ltd., where she serves as Chair of the Audit
Committee.
