Summary of the Star-Orion South Diamond Project Feasibility Study Feasibility Study

November 2011

Saskatchewan Geological Survey42nd Annual Open House

Safe Harbour StatementCertain statements contained in this presentation relate to future events or the Corporation's future performance, businessp p p ,prospects or opportunities and constitute forward-looking statements within the meaning of certain securities laws, includingthe “safe harbour” provisions of Canadian securities legislation and the United States Private Securities Litigation Reform Actof 1995. All statements other than statements of historical fact may be forward-looking statements, which are often, but notalways, identified by the use of words such as "seek“, "anticipate", "plan", "continue", "estimate", "expect, "may", "will","project", "predict", "potential", "targeting“, "intend", "could", "might", "should", "believe" and similar expressions. Forwardlooking statements in this presentation include, but are not limited to, statements regarding the following: Project schedule,looking statements in this presentation include, but are not limited to, statements regarding the following: Project schedule,anticipated diamond production dates and mine life; Project economics, including anticipated cash flow model, pre- and post-tax and royalty NPV and IRR, gross annual revenue, and estimated capital and operating costs and capital payback period; theanticipated Project footprint and location of infrastructure; size of mineral reserves, grades, quantity of carats, diamondvalues and anticipated diamond price increases; the presence of large stones, Type IIa diamonds, size frequency distributionand diamond quality; upside potential considerations including trafficability and pit slopes and other considerations which mayhave the potential to reduce capital costs; cumulative tonnages associated with the kimberlites in the FalC region; andhave the potential to reduce capital costs; cumulative tonnages associated with the kimberlites in the FalC region; andinferred resources, which are considered too speculative geologically to have economic considerations applied that wouldenable them to be categorized as mineral reserves.

These statements involve known and unknown risks, uncertainties and other factors such as results of exploration activities,the Corporation's limited experience with development-stage mining operations, uninsured risks, regulatory changes, defectsin title availability of materials and equipment timeliness of government approvals changes in commodity and particularlyin title, availability of materials and equipment, timeliness of government approvals, changes in commodity and particularlydiamond prices, changes in the Canadian/US exchange rate, actual performance of facilities, equipment and processes relativeto specifications and expectations, assumptions made regarding the project schedule, assumptions made regarding provincialtaxation, unanticipated environmental impacts on operations, and other key assumptions utilized in the preparation of afeasibility study, any of which may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Other additional factors that could cause actual results to differ materially include, but are not limited to,h bili f h C i b i j fi i i k f d ib d i h C i ’ A l I f i Fthe ability of the Corporation to obtain project financing, risk factors described in the Corporation’s Annual Information Form

dated March 23, 2011 and its annual and interim MD&A. The Corporation cautions that the foregoing list of factors that mayaffect future results is not exhaustive. Actual results may differ materially from those expressed or implied by such forward-looking statements.

The Corporation believes that the expectations reflected in its forward-looking statements are reasonable, but no assurance

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can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly reliedupon. These statements speak only as of the date specified. The Corporation does not intend, and does not assume anyobligation, to update these forward-looking statements unless required to do so pursuant to applicable securities legislation.

Location

• Fort à la Corne (FalC) Kimberlite field

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( )• 70 kimberlite bodies

Southern Fort à la Corne Kimberlite Field

• Star-Orion South Di d P j tDiamond Project

• Star: 100% Shore• Orion South and Star

W t F lC JV (66% West: FalC JV (66% Shore and 34% Newmont)

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Star – Orion South Feasibility Study

• Feasibility Study (FS) completed August 2011

Financial Highlights– Financial Highlights– Proposed mining methods– Proposed processing methods

All values in Canadian $, except diamond prices,which are in US$

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Feasibility Study Highlights

• Probable Mineral Reserves of 279 Mt at a weighted average grade of 12.3 cpht containing 34.4 Mct at a weighted average price of US$242 per carat over the 20 year LOM;year LOM;

• Robust Project economics combined with proximity to infrastructure (electric power, paved highways, railroads, water and labour);

• The Base Case FS has a pre-tax and royalty NPV (7%) of $2.1B and a pre-tax and royalty IRR of 16% and a post-tax and royalty NPV (7%) of $1.3B with an IRR of 14%;

• Pre-production capital cost of $1.9B with a total capital cost of $2.5B (including direct, indirect costs and contingency) over the LOM and an initial capital cost payback period of 5.3 years.

Abbreviations: Mt – Million tonnes; cpht: carats per hundred tonne; Mct: million carats; LOM: Life of Mine; NPV: NetPresent Value; IRR: Internal Rate of Return

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Future Project Footprint

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1 km

FS Mineral Reserves and Resources

MINERAL RESERVES

Deposit Category Ore (Mt) Ore Grade (cpht) Carats (Mct)

Star Probable 165.890 12.3 20.386

Orion South Probable 113.090 12.4 13.994

Total Probable 278.980 12.3 34.3801.0 mm bottom screen cut-off

MINERAL RESOURCES

Deposit Category Ore (Mt) Ore Grade (cpht) Carats (Mct)Star Inferred 11 621 10 0 1 161Star Inferred 11.621 10.0 1.161

Orion South Inferred 68.679 11.5 7.939

Total Inferred 80.300 11.3 9.100

The cost of excavation of these Inferred Resources is included in the FS but processingcost and resultant revenue is not included, as NI 43-101 only permits revenue derivedfrom Indicated Reserves to be used in financial analysis. NI 43-101 considers InferredResources too speculative geologically to have economic considerations applied to themth t ld bl th t b t i d Mi l R d th i t i t

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that would enable them to be categorized as Mineral Reserves, and there is no certaintythat they will be economic.

FS Diamond Prices

SModel Model Price Minimum High

Star Kimberlite

CaratsModelPrice

(US$/carat)

Model Price plus 15%

(US$/carat)

MinimumModel Price(US$/carat)

HighModel Price(US$/carat)

Cantuar 1,667.96 355 408 281 499

Pense 1,410.47 175 201 131 224

EJF 7,124.74 225 259 176 296

MJF‐LJF 91.28 198 228 106 290

Orion SouthModel Model Price  Minimum High

Used in FS Base Case

Orion South Kimberlite

Carats Price(US$/carat)

plus 15%(US$/carat)

Model Price(US$/carat)

Model Price(US$/carat)

EJF 1,400.01 192 221 149 258

Pense 581.47 129 148 94 177

Notes:1. Diamond prices determined by WWW International Diamond Consultants Limited using their February 2011

diamond pricebook

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diamond pricebook.2. Diamond prices continued to rise into late July 2011 when prices were above the February 2011 High Model price.3. In August 2011 there was a decrease of approximately 15% in diamond prices, therefore, diamond prices used in

the FS (Feb 2011 Model + 15%) are considered conservative.

FS Cash Flow Model Economic Criteria

Area Criterion Base Case

ProductionParameters

Process plant functional Q4, 2016Projected start of ore production Q4, 2016No. of operating days per year 350No. of operating days per year 350Process plant availability 87%Processing rate 45,000 tpd oreEstimated LOM total plant feed 279 Mt ore at a weighted

average 12.3 cpht gradeR S f R h di d lRevenue Source of revenue Rough diamond sales

Revenue per tonne of ore processed (includes escalation)

$54.24

Net revenue per tonne of ore processed after capital cost recovery

$19.92 p y

Weighted average diamond price per carat (February 2011 valuation)

US$210 plus 15% = US$242

Escalation Projected diamond price escalation 3.5%

Abbreviations: Mt – Million tonnes; tpd – tonnes per day.

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FS Cash Flow Model Economic Criteria

Area Criterion Base Case

Cost Assumptions Cost escalation 0%Exchange rate $1.00=US$0.945Marketing costs 2% of gross revenueRoyalties Based on Saskatchewan royalty

regimeOperating Costs Mining (includes waste removal cost) $8.58 / tonne processed

Ore processing $3.01 / tonne processedGeneral and Administration $2.48 / tonne processedGeneral and Administration $2.48 / tonne processed

Capital Costs Capital over LOM $8.99 / tonne processedMarketing Marketing cost $1.08 / tonne processedRoyalties Royalties cost $2.87 / tonne processedClosure Mine closure cost $0.31 / tonne processedTa es Ta cost $6 98 / tonne processedTaxes Tax cost $6.98 / tonne processed

Contingency Applied to pre-production and mining operating expenditures; mine, plant and facilities capital costs

$253M

Level of Accuracy +/- 15%yAbbreviations: Mt – Million tonnes; tpd – tonnes per day.

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Mining – Star and Orion South Open Pits• FS based on mining Star followed by FS based on mining Star followed by

Orion South– 15 m benches– Variable ultimate pit slopes

Stratigraphy Slope AngleUpper Stratified Drift 16°Till 16-27°

– Pit Phasing• Star: 5 phase pit design to reduce the amount of

pre-strip waste removal and to reduce pit equipment capital in initial mining

Colorado Group 15°Kimberlite 45°Upper Mannville Group 20°Lower Mannville Group 25°• Orion South: 3 phase pit design Lower Mannville Group 25

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Mining: Open Pit PhasesItem Star Open Pit Development Phases Total

1a 1b 2 3 41a 1b 2 3 4Total ore (Probable Mineral Reserve) (Mt) 29.46 25.76 45.18 49.45 16.02 165.89Total waste (Mt) 343.6 154.7 225.2 166.1 148.9 1,038Stripping ratio (t waste: t ore) 11.66:1 6.00:1 4.98:1 3.36:1 9.29:1 6.26:1

Item OS Open Pit Development Phases Totalp p1a 1b 2

Total ore (Probable Mineral Reserve) (Mt) 24.91 32.30 55.87 113.09Total waste (Mt) 216.5 281.5 235.8 733.8Stripping ratio (t waste: t ore) 8.69:1 8.71:1 4.22:1 6.49:1

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Mining

• Open pit mining to employ three methods based on mining material:1. Upper sand, silt and clay: Conventional hydraulic excavator and shovel2. Till and country-rock waste (shale): In-Pit Crush and Convey (IPCC) system3. Kimberlite ore: Hybrid truck and shovel with IPCC for ore haulage to process plant

• Electrification of facilities wherever possible, as grid power available Q3 2013

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Overburden Strippingpp g

1. Upper sand, silt and clay65 000 t d– 65,000 tpd

• 3 hydraulic excavators• 9 haul trucks• 5 bulldozers

Komatsu PC4000 hydraulic excavator (22 m3 capacity)

Komatsu HD1500 Haul Truck (144 t capacity)

15Komatsu D275AX Dozer

Overburden Stripping

2. Till and country rock (shale): IPCC– 16,000 tph (384,000 tpd)

• 3 IPCC systems3 IPCC systems– Electrical powered shovel– Fully-mobile sizer– Fully-mobile transfer conveyor

Bridge inclined and overland conveyors• Bridge, inclined and overland conveyors• OVB/waste stacker

Takraf Stacker (ARs-

Bateman hi h i

Takraf Stacker (ARsB-12500.90)

high-capacity conveyor

161500 Series MMD Sizer (8,400 tph capacity)

Ore and Waste

3. Kimberlite and Waste– 45,000 tpd

3 h d li t• 3 hydraulic excavators• 12 haul trucks• Sizer and conveyance

– Size to -400 mm• Ore stacker• Ore stacker

Sandvik Stacker (PA-1600)

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1500 Series MMD Sizer (8,400 tph capacity)

Komatsu HD1500 Haul Truck (144 t capacity)

Processing

• 116,000 tonne kimberlite stockpile• Two conveyors (apron feeders) to feed -400 mm ore at 45,000 tpd to the

process plant

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• Process Plant functions include:

From Metso Minerals

Process PlantProcess Plant functions include:• Comminution

• Size and density classification

• Recovery

• Final diamond cleaning andgrading at Saskatoon sorthouse

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Environment, Permitting & Community

• Environment and Permitting– Draft EIS submitted to regulatory agencies in 2010– Comments received and reviewed, extra requirements for baseline work fulfilled , q

during 2011– Supplemental information expected to be filed in 4th quarter, 2011

• Community Engagement– Two rounds of successful stakeholder open houses since 2009– Facilitated forming of Diamond Development Advisory Committee (DDAC): a

stakeholders group of all local municipalities and several Aboriginal Groupsstakeholders group of all local municipalities and several Aboriginal Groups– Entered into EIS Information Gathering Agreements with nine Aboriginal Groups– Signed three MOUs and one Mutual Cooperation Agreement

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Star-Orion South Diamond Project Summary

• Probable Mineral Reserves:

• 279 Mt at a weighted average grade of 12.3 cpht containing 34.4 Mct at a weighted a erage price of US$242 per carat o er the 20 ear LOM;average price of US$242 per carat over the 20 year LOM;

• The Base Case FS has a pre-tax and royalty NPV (7%) of $2.1B and a pre-tax and royalty IRR of 16% and a post-tax and royalty NPV (7%) of $1.3B with an IRR of 14%;

• Pre-production capital cost of $1.9B with a total capital cost of $2.5B over the LOM and an initial capital cost payback period of 5.3 years;

• Ore mining and processing 45,000 tpd utilizing a hybrid IPCC and truck and shovel g p g , p g ysystem and a front-end autogenous grinding (AG) mill processing plant.

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