Nunavut Properties
Itza Lake
On July 10, 2007 the Company announced that it entered into an agreement with Bayswater Uranium Corporation (“Bayswater”) to explore Bayswater’s 1,064,353 acre Itza Lake property for diamonds. Located 80 kilometres northwest of the hamlet of Baker Lake, Nunavut, marginal to the North Thelon Basin, Itza Lake’s diamond potential was recognized late in 2006 through an initial airborne geophysical survey that covered about 20% of the property and identified a number of circular, magnetic features, similar to those associated with kimberlite pipes.
Under the terms of the Letter Agreement, Stornoway can earn a 60% interest in the diamond rights at Itza Lake by issuing $75,000 worth of Stornoway shares to Bayswater (done) and incurring $4,000,000 in exploration expenditures over five years - a minimum of $500,000 must be spent before September 1, 2008. Bayswater will receive 25,000 shares of Stornoway or $40,000 in cash, at Stornoway’s election, for each geographically distinct, in-situ kimberlite body, up to a maximum of ten bodies, identified on the property. Bayswater will receive a further 50,000 shares or $200,000 in cash, at Stornoway’s election, for each kimberlite which returns greater than 75 carats per hundred tonnes (based on diamonds recovered on a 0.85 mm square mesh sieve) from a minimum one tonne sample. Upon Stornoway earning its 60% interest, Bayswater has thirty days to elect to form a joint venture whereby Stornoway will contribute 60% and Bayswater shall contribute 40%, of all future expenditures on the property. Provided Stornoway earns a 60% interest and Bayswater elects not to form a joint venture within thirty days, Stornoway has a further thirty days to elect to proceed to earn a further 20% interest in the diamond rights to the Itza property (bringing its total property interest to 80%) by funding all work towards the completion of a bankable feasibility study on the property. Provided Stornoway earns an 80% interest in the diamond rights to Itza, the partners shall enter into a joint venture whereby each partner will contribute its pro-rata share of all future expenditures on the property.
During 2007, Stornoway undertook ground geophysical surveys, limited prospecting and both regional and target specific till sampling for indicator minerals. Further work on the property is pending logistical considerations, specifically access to a drill rig to allow testing of targets.
IC/TIM Project
Situated east of Committee Bay in the Kugaaruk area, the IC/LO and TIM diamond projects are operated by Diamondex Resources Ltd. (“Diamondex”), who purchased the assets of Trigon Exploration Canada Inc. (“Trigon”) in July of 2007.
Stornoway is earning an interest in the property through Contact, which currently holds a 53.33% interest in the IC Property (150,203 acres) and has the right to earn up to 60% by funding further exploration expenditures. Trigon has a 51% interest in the diamond rights to the TIM property (61,980 acres), which lies within the area of interest defined by the original Trigon-Contact IC/LO joint venture agreement, thereby giving Contact the right to earn its commensurate share of Trigon’s interest. Assuming all obligations are met, Stornoway could therefore own 27.2% of the diamond rights on the TIM property.
Airborne geophysical surveys, till sampling and prospecting have been undertaken on the properties but no kimberlites have been discovered to date. Stornoway solely funded the 2007 exploration program which consisted of the processing of till samples collected in 2006. No work plans for 2008 have been submitted by the operator.
Northwest Territories Properties
Mackenzie (OWIHK) Project
A 50/50 joint venture between Stornoway and Diamondex governs exploration on four prospecting permits (265,622 acres) and nine mineral claims (about 22,210 acres) situated in the northern Mackenzie Delta near the towns of Inuvik and Aklavik. Collectively the Company and Diamondex have completed airborne geophysical surveys, heavy mineral sampling and ground geophysical surveys over select targets.
To protect specific areas of interest, staking activities have been undertaken on one of the prospecting permits that was scheduled to lapse in early 2007. No targets have been drill tested, but the joint venture recently completed additional ground geophysical surveys in April 2008. Results of this recent work will be used to develop future plans for the property.
Blackstone, Eetsee and Shegonla Projects
In February of 2006 Stornoway was granted 26 three year prospecting permits in the southern Northwest Territories totaling just over one million acres and representing three different properties. All three 100% owned properties lie within the De Cho land claims settlement area, although they are situated within areas that were identified as being favourable for mining activities at the time of the prospecting permit application.
The 17 contiguous permits of the Blackstone property lie east of the Liard River and south of the Mackenzie River. Fort Simpson is the largest nearby community and is about 50km north of the property. The Eetsee property comprises six contiguous prospecting permits on the west side of the Mackenzie River, some 220km north-northwest of Fort Simpson. The three separate, non-contiguous permits of the Shegonla property lie 150km east of the Mackenzie River and 120 to 200km north of Fort Simpson.
During 2006 the Company undertook airborne geophysical surveys over each of the properties, and during 2007 completed ground geophysical surveys and a till sampling program. Commencing in late 2007, and continuing to the present time, the Company has been involved in an extensive consultation process with various First Nations groups, federal and territorial agencies and numerous regulatory bodies to allow access for a drill rig in order that targets of interest may be tested. As of June 02, 2008, the Mackenzie Valley Land and Water Board requested additional information from another government agency, and as a consequence the Company is still not in possession of the necessary land use permit.
RAM/SHU Projects
The RAM and SHU diamond projects (105,111 acres) are situated immediately north of the East Arm of Great Slave Lake, and are operated by Diamondex, following their purchase of Trigon. As of April 30, 2008, the Company has earned a 53.21% interest in the RAM (and SHU) properties through Contact.
Airborne geophysical surveys, till sampling and prospecting have been undertaken on the properties but no kimberlites have been discovered to date. Stornoway solely funded the 2007 exploration program, which consists of the processing of select till samples collected in 2006. No work plans for 2008 have been submitted by the operator.
Alberta Properties
Calling Lake Property
In late July 2006, Stornoway entered into an option agreement with Grizzly Diamonds Ltd. (“Grizzly”) on the 820,600 acre ‘Call of the Wild’ property, situated northwest of Calling Lake over the Pelican Mountains in north-central Alberta. Stornoway earned an initial 51% interest in the 42 permit property by flying the entire property with an airborne fixed wing magnetic survey and collecting 25 diamond indicator samples within one year. Stornoway can earn an additional 9% by incurring $5,000,000 in exploration expenditures within five years. Finally, Stornoway can earn an additional 10% (totaling 70%) by providing Grizzly with a bankable feasibility study.
The Call of the Wild property was acquired in order to explore the Pelican Mountain upland area, a possible source of diamond indicator minerals from the Calling Lake area, which has historically yielded some of the best known diamond indicator chemistry in Alberta. In 1998, one macro diamond was also recovered from basal till collected alongside the Calling River. Beach sands along the southwest and south shore of Calling Lake have yielded greater than 500 diamond indicator minerals at four separate sites, including the largest concentration of G10 pyropes observed in Alberta to date.
Some 47 priority geophysical anomalies identified from the airborne survey were ground checked and a series of targets tested by ground geophysical surveys during 2007. Further work on this property is under consideration.
Botswana Properties
Stornoway and Motapa Diamonds Inc. (“Motapa”) previously entered into an agreement that provides Stornoway with an option to earn a 50% interest in a portion of Motapa’s Botswana diamond licenses through exploration work commitments and share issuances by September 2008.
The first phase of drill testing unexplained geophysical anomalies on the Lebung, Matsitama and Mokubilo properties had been completed in early 2006 and on September 25, 2007, the Company announced that drilling had commenced on the Sua Pan property. No kimberlite was intersected in any of the seven holes and as a result, the Company will return the licenses to Motapa.
Other Projects (Various Interests)
Stornoway and its wholly owned subsidiaries hold varying interests in a number of other minor diamond properties and prospects, as well as significant regional geological, geochemical and geophysical databases.
It is Stornoway’s intention to review these properties and databases, as well as other properties or information that may become available, in order to ensure that the Company continues to maintain a portfolio of promising diamond projects that fill the ‘pipeline’ from grassroots to development stage. Exploration activities, including drilling, will be undertaken where warranted and where permitted by logistical and budgetary considerations. Results will be reported as appropriate.
Stornoway also undertook generative exploration programs throughout Canada during 2007, and is continuing these activities in 2008. This work investigated geologically prospective terrains, un-sourced indicator mineral anomalies derived from public, quasi-public and proprietary databases and unexplained geophysical targets from both ground and airborne surveys. Till and heavy mineral sampling, airborne and ground geophysical surveys and prospecting programs were completed in 2007. Rock samples were collected for both caustic fusion and DMS processing.
Partial results available to date from this 2007 generative exploration program have been used to identify and acquire targeted landholdings thought to have the potential to host diamondiferous kimberlites. Results for additional work are pending and Stornoway anticipates continued property acquisition.