Foxtrot Property – Renard Kimberlitic Bodies, Quebec
The Foxtrot Property, containing the Renard cluster of kimberlite bodies, is a 50/50 joint venture between Stornoway’s wholly-owned subsidiary Ashton, and SOQUEM Inc.’s (“SOQUEM”) wholly-owned subsidiary, Diaquem. Ashton is the project operator. Since 1996, Ashton and SOQUEM have evaluated an area of more than 400,000 square kilometres of the eastern Archean Superior craton. Exploration conducted by the joint venture has resulted in the discovery of a new field of kimberlitic intrusions on the Foxtrot property, notably the Renard cluster of kimberlitic bodies, and a nearby system of kimberlitic dykes, the Lynx-Hibou dykes. In August 2007, Ashton and SOQUEM completed an advanced stage bulk sample program at the Foxtrot property and recovered 6,497 carats of diamonds from three kimberlite pipes.
Diamond recovery results from the Renard bulk sampling program as well as an analysis of an Antwerp diamond valuation exercise conducted in September 2007, were provided in the Company’s interim MD&A dated December 13, 2007. This information can be obtained under Stornoway’s profile on Sedar (www.sedar.com) or from Stornoway’s website. In addition, subsequent diamond recovery results from an additional 400 tonne sample from the Renard 4 northern complex zone, a 185 tonne sample from Renard 3, a 500 tonne sample from the Lynx kimberlite dyke, a 31 tonne sample from the Hibou dyke, a 266 tonne sample from the Renard 65 kimberlite pipe and a 28 tonne sample from the North Anomaly dyke can also be found in the Company’s interim MD&As dated December 13, 2007 and March 13, 2008.
The results of the Renard bulk sampling program, including diamond valuation work and additional mini-bulk sampling of associated kimberlite bodies, will be utilized in a National Instrument (“NI”) 43-101 compliant mineral resource calculation, currently ongoing. This resource calculation forms a component part of a larger pre-feasibility study into potential diamond mining scenarios at Renard, which is expected to be completed shortly. Pending the results of this program of work, the Foxtrot property has the potential to host Quebec’s first diamond mine.
Revised Renard Diamond Valuation Results
During the current quarter ended April 30, 2008, Stornoway received new diamond valuation results from the Renard 2, 3 and 4 kimberlite pipes, and the Lynx and Hibou kimberlite dykes. The new valuations were commissioned to provide updated diamond price data in support of the Renard Pre-Feasibility study. Three new diamond valuation parcels from Renard 4, Lynx and Hibou were presented for valuation in Antwerp, Belgium under the supervision of WWW International Diamond Consultants Ltd. (”WWW”), an internationally recognized diamond valuation and consulting company. In addition, WWW performed an update of the previously obtained valuation on bulk sample diamond parcels from Renard 2, 3 and 4.
Renard 2 and 3
WWW recommended a revised modeled “Base Case” diamond price estimate for both the Renard 2 and Renard 3 kimberlite pipes of US$121 per carat, with a “High” modeled price estimate of US$136 per carat and a “Low” modeled price estimate of US$108 per carat. This was an 11% increase compared to the previous diamond price model of $109 per carat obtained in September 2007. The revised model was generated by WWW restating their own September 2007 valuation result on each diamond parcel on the basis of their March 2008 price book, and applying an adjustment factor to the diamond price model accordingly.
The revised Renard 2 and 3 diamond price models are summarized as follows:
| Kimberlite Sampled | Weight of Valuation Sample (Carats)* | September 2007 “Base Case” Diamond Price Model (US$/carat) | March 2008 “Base Case” Diamond Price Model (US$/carat) | Percentage Increase in Model Price |
|---|---|---|---|---|
| Renard 2 | 1589.57 | $109 (with sensitivities of $105 to $122) |
$121 (with sensitivities of $108 to $136) |
11% |
| Renard 3 | 2651.17 | |||
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* Sample weights represent the total carat weight of diamonds presented for valuation following the combination of individual sub-samples and after acid cleaning. |
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Renard 4
WWW recommended a revised modeled “Base Case” diamond price estimate for the Renard 4 kimberlite pipe of US$79 per carat, with a “High” modeled price estimate of US$87 per carat and a “Low” modeled price estimate of US$71 per carat. This is a 14% increase compared to the September 2007 diamond price model of US$69 per carat. The revised model was generated in a similar fashion to that of Renard 2 and 3 above, but also incorporated the results of a valuation by WWW of 504 carats from the additional Renard 4 sample “4003”. Sample 4003 was collected in 2006 as part of the Renard 4 bulk sample program, which comprised surface trenching within the Renard 4 “Northern Complex Zone” (NCZ). 4003 was processed subsequent to the September 2007 valuation exercise so as to increase the size of the Renard 4 valuation parcel and to assist in determining the exact nature of the NCZ diamond size distribution.
The revised Renard 4 diamond price model is summarized as follows:
| Kimberlite Sampled | Weight of Valuation Sample (Carats)* | September 2007 “Base Case” Diamond Price Model (US$/carat)** | March 2008 “Base Case” Diamond Price Model (US$/carat) | Percentage Increase in Model Price |
|---|---|---|---|---|
| Renard 4 - N. Complex Zone | 2695.63 | $69 (with sensitivities of $63 to $73) |
$79 (with sensitivities of $71 to $87) |
14% |
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* Sample weights represent the total carat weight of diamonds presented for valuation following the combination of individual sub-samples and after acid cleaning, and including 504 carats of diamonds from sample 4003 not available at the time of the September 2007 valuation. ** Model based on an original valuation sample of 2,192 carats. |
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Lynx and Hibou
WWW further recommended a modeled “Base Case” diamond price estimate for the Lynx kimberlite dyke of US$66 per carat, with a “High” modeled price estimate of US$97 per carat and a “Low” modeled price estimate of US$56 per carat. In addition to performing their own valuation on the 520 carat Lynx diamond parcel, WWW showed the parcel to two other Antwerp based experienced rough diamond valuators in order to obtain additional market based valuations. The average “observed” (un-modeled) price of the three valuations was US$53 per carat. The Lynx diamond valuation parcel was recently recovered from 494 tonnes of kimberlite extracted from two trench locations along the surface trace of the dyke during 2007. The parcel included a 21 carat stone which was broken during sample processing and recovered in principally three fragments, the largest of which weighed 11.73 carats.
WWW also performed a valuation on a 40 carat parcel of diamonds recovered from recent trenching on the Hibou kimberlite dyke (Stornoway press release dated January 28, 2008). This small parcel of diamonds was valued by WWW alone, who determined an “observed” (un-modeled) price of US$43 per carat. Owing to the size of the parcel, no diamond price modeling exercise was possible. However, WWW recommended that, for planning purposes, a diamond price of US$66 per carat be adopted for the Hibou kimberlite dyke, conditional upon the collection of a bulk sample that demonstrates an incidence of large diamonds similar to that seen at Lynx.
The complete Lynx and Hibou diamond price models are summarized as follows:
| Kimberlite Sampled | Weight of Valuation Sample (Carats)* | Largest Diamonds (Carats) | Observed (Un-Modeled) Average Diamond Price (US$/carat) | “Base Case” Diamond Price Model (US$/carat) |
|---|---|---|---|---|
| Lynx | 519.62 | 11.73, 5.87 | $53 | $66 (with sensitivities of $56 to $97) |
| Hibou | 38.98 | 1.01, 0.67 | $42 | none determined** |
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* Sample weights represent the total carat weight of diamonds presented for valuation following the combination of individual sub-samples and after acid cleaning. ** WWW have recommended that, for planning purposes, a diamond price of US$66/carat be adopted for the Hibou kimberlite dyke, conditional upon the collection of a bulk sample that demonstrates an incidence of large diamonds similar to that seen at Lynx. |
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Scientific and technical data
The diamond valuation results discussed above were obtained during a valuation exercise undertaken in Antwerp, Belgium, between the 26th and 28th of March 2008, and by applying updated diamond price information to a valuation exercise undertaken in Antwerp between the 24th and 28th of September 2007. During the September 2007 valuation exercise, WWW and an additional three independent diamond valuators were employed, under the supervision of WWW, to determine diamond price estimates on the Renard 2, 3 and 4 diamond parcels. During the March 2008 valuation exercise, WWW and an additional two independent diamond valuators were employed to determine a diamond price estimate for the Lynx dyke diamond parcel, and WWW alone was employed to determine a diamond price estimate for the Renard 4 sample “4003” and the Hibou diamond parcel. Adjustment factors to diamond price models for Renard 2, 3 and 4 are based on an estimate of diamond price change between September 2007 and March 2008 by WWW, and assumes a similar price escalation would have been applied by the other three independent diamond valuators over the same period. All diamond valuations were based on a +1 DTC sieve size cut-off.
The diamond parcels valued were recovered after the processing of kimberlite bulk samples with a 10 tph dense media separation plant owned by Stornoway (through its wholly owned subsidiary Ashton) and SOQUEM in joint venture, and operated by Stornoway. Diamonds were recovered from concentrate at Stornoway’s wholly owned and operated mineralogical laboratory in North Vancouver, British Columbia. Quality assurance protocols and actual operating procedures for the processing, transport and recovery of diamonds under the Renard bulk sample program, including arms-length security provisions, conform to industry standard Chain of Custody provisions and were subject to the review of AMEC, who were contracted to provide third party accreditation for program data. The Renard program is managed by Dave Skelton, P.Geol., Senior Project Manager. Stornoway’s diamond exploration programs are conducted under the direction of Robin Hopkins P.Geol, Vice President, Exploration, a Qualified Person under NI 43-101.
Renard Pre-Feasibility Study Update
During the current quarter ended April 30, 2008, Stornoway also gave guidance on the progress of the ongoing Pre-Feasibility Study at Renard. Preliminary mine design, diamond plant design and capital and operating cost estimation have been completed in draft form and are awaiting the finalization of a National Instrument (“NI”) 43-101 compatible resource estimation by AMEC Americas Ltd. (“AMEC”). Completion of the resource estimate is required before a fully optimized, conceptual mine plan can be determined, operating and capital parameters fixed, and a financial model established. Delays in the completion of this work are attributable to congestion within the broader diamond mining sector, with multiple, concurrent development projects competing for a limited number of specialized resource estimation professionals. Stornoway expects to receive a finalized resource model shortly, allowing disclosure of the results of the Pre-Feasibility work to commence on a timely basis.
AMEC is an international project management and services company with broad experience in the Canadian diamond mining sector. The principal author of the Renard Pre-Feasibility Study is Agnico-Eagle Mines Limited (TSX: AEM), a leading mine developer in the Province of Québec and Stornoway’s largest shareholder.