March 18, 2016

Research #2Lithium in Utah, USA

Early Warning Report on Prima Diamond Corp.

One month ago on February 18, Prima Diamond Corp. announced the proposed acquisition of the Green Energy Project in Utah with historic lithium grades of up to 1,700 mg/L (read Rockstone’s report here). Next week shall be the starting shot for rapid advancement of this high-grade lithium brine project amidst skyrocketing lithium demand globally.

ith 33 million shares issued and outstanding, the com-pany traded at 1 cent before

this proposed acquisition (due to no ac-tive project) and is currently trading at 4.5 cents. Also on February 18, the company announced a 5:1 share consolidation for which it called an annual and special meet-ing of shareholders scheduled for March 21, which is next Monday. The current 33 million shares would reduce to ap-proximately 6.5 million shares while the per-share price increases proportionally.

Since February 18, the company traded 1.5 million shares in Germany and another 8 million shares in Canada mostly between 2 and 5 cents (post-consolidation, this would translate into a share price of 10 and 25 cents, respectively). The ongoing 5 cent post-consolidation financing, which includes a full warrant (exercisable at 7.5 cents in the first year and 10 cents in the second year) and which should be closing next week as well, would translate into a potential 100% to 400% appreciation from current price level of 2 to 5 cents.

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Company Details

Prima Diamond Corp. Suite 1450 - 789 West Pender StreetVancouver, BC, V6C 1H2 Canada Phone: +1 604 681 1568Email: djones@zimtu.com (Darryl Jones)

Shares Issued & Outstanding: 32,573,500

Canadian Symbol (TSX.V): PMDCurrent Price: $0.045 CAD (Mar. 17, 2016)Market capitalization: $1.5 million CAD

German Symbol / WKN: 2P6 / A117EN Current Price: €0.027 EUR (Mar. 17, 2016)Market capitalization: €0.9 million EUR

Chart Canada (TSX.V)

Chart Germany (Frankfurt)

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Also included in the press-release were a private placement and debt settlement which are components commonly presented when companies are restructured. Rockstone has found that companies at these stages offer great opportunities for significant gains.

The total number of shares after the proposed consolidation, debt settlement, property acquisition and financing would be approximately 39 million issued and outstanding, of which management and insiders will control more than 40% according to a statement from Zimtu Capital Corp. At 5 cents, the company would then be valued at $1.95 million, or $3.9 million at 10 cents, or $9.75 million at 25 cents.

Both the private placement and the property acquisition are subject to final approval by the TSX Venture Exchange.

Rockstone is looking forward to the following week as the shareholder meeting may approve the share consolidation, whereafter a name change is expected to better reflect the company’s new focus on lithium brines in the US. Shortly thereafter and with fresh cash in the bank from the proposed financing, the company should be in a good position to use the proceeds for rapid advancement of the Green Energy Lithium Project in Utah.

First steps may include getting down to the property in order to evaluate how to get into the structure and test the brines and flow rates. There exist 5 shut-in wells on the property, which are not abandoned but merely blocked with a piece of concrete.

Re-entering one of those wells shouldn’t be overly costly in order to take samples and record well performance data (known to be so-called “flowing artesian wells”, i.e. no pumping may be required as the brine flows to surface under the natural pressure of the acquifer).

The company should engage a top engineering firm to do a study on the potential of this structure and the processing of these remarkably high-grade lithium brines.

“Share Consolidation, also known as “Reverse Stock Split”, is an exercise

undertaken by the company to reduce the total number of shares in issue

while simultaneously increasing the nominal or par value of each share.

In a Share Consolidation exercise, the number of consolidated shares which

existing shareholders are entitled to is in proportion to their existing

shareholdings.

After this exercise, they will own fewer but proportionately higher priced shares due to the reduction in the

number of shares in issue.

Thus, Share Consolidation has no effect on the value of the individual shareholder’s overall shareholdings

relative to the total market valuation of the company.”

(Definition from ShareInvestor)

Is it Different This Time? Separating Hype from Reality in

the Lithium Ion Boom

Recently, Chris Berry published his re-marks at PDAC regarding how to inter-pret the lithium market. The presentation looks at the reasons why the lithium ion battery is increasingly important in our daily lives and offers a few thoughts on what to look for and avoid as you start to understand an increasingly interesting and pivotal space. Click here to view Chris Berry’s “picture heavy” presentation

Research #2 | Prima Diamond Corp.

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Disclaimer and Information on Forward Looking Statements:All statements in this report, other than statements of historical fact should be con-sidered forward-looking statements. Much of this report is comprised of statements of projection. Statements in this report that are forward looking include that Prima Diamond Corp. or any other company or market will perform as expected; that Prima Diamond Corp. will complete today’s announced transaction; that Prima Diamond Corp. or its partner(s) can and will start producing and selling any kinds of products; that the company can raise sufficient funds for the transaction, exploration and corporate matters; that any of the mentioned plans, comparisons with other companies, regions or numbers are valid or economic. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in these forward-looking statements. Risks and un-certainties respecting lithium companies are generally disclosed in the annual financial or other filing documents of Prima Diamond Corp. and similar companies as filed with the relevant securities commissions, and should be reviewed by any reader of this report. In addition, with respect to Prima Diamond Corp., a number of risks relate to any state-ment of projection or forward statements, including among other risks: the receipt of all necessary approvals and permits; the ability to conclude a transaction to start or continue exploration; uncertainty of future market regulations, capital expenditures and other costs; financings and additional capital requirements for exploration, development, construction, and operating of a facility; the receipt in a timely fashion of further permit-ting for its legislative, political, social or eco-nomic developments in the jurisdictions in which Prima Diamond Corp. carries on busi-ness; operating or technical difficulties in connection with production or development activities; the ability to keep key employees, joint-venture partner(s), and operations financed. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking in-formation. Rockstone and the author of this report do not undertake any obligation to update any statements made in this report.

Disclosure of Interest and Advisory Cautions: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Rockstone, its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including Rockstone’s report, especially if the investment involves a small, thinly-traded company that isn’t well known. The author of this report is paid by Zimtu Capital Corp., a TSX Venture Exchange listed investment company. Part of the author’s responsibilities at Zimtu is to research and report on companies in which Zimtu has an investment. So while the author of this report is not paid directly by Prima Diamond Corp., the author’s employer Zimtu will benefit from appreciation of Prima Diamond Corp.’s stock price. In addition, the author owns shares of Prima Diamond Corp. and Zimtu Capital Corp. and thus would also benefit from volume and price appreciation of its stocks. In this case, Prima Diamond Corp. has one or more common directors with Zimtu Capital Corp. Thus, multiple conflicts of interests exist. Therefore, the information provided herewithin should not be construed as a financial analysis or recommendation but strictly as an advertisment. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Rockstone and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Prima Diamond Corp. has not reviewed this report prior to publication. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect. Please read the entire Disclaimer carefully. If you do not agree to all of the Disclaimer, do not access this website or any of its pages including this report in form of a PDF. By using this website and/or report, and whether or not you actually read the Disclaimer, you are deemed to have accepted it. Information provided is educational and general in nature.

Analyst Profile and Contact

Stephan Bogner (Dipl. Kfm. FH)Mining Analyst Rockstone Research 8050 Zurich, Switzerland+41-44-5862323sb@rockstone-research.com

Stephan Bogner studied at the International School of Management (Dortmund, Germany), the European Business School (London)

and the University of Queensland (Brisbane, Australia). Under supervision of Prof. Dr. Hans J. Bocker, Stephan completed his diploma thesis (“Gold In A Macroeconomic Context With Special Consideration Of The Price Formation Process”) in 2002. A year later, he marketed and translated into German Ferdinand Lips‘ bestseller („Gold Wars“). After working in Dubai for 5 years, he now lives in Switzerland and is the CEO of Elementum International AG specialized in duty-free storage of gold and silver bullion in a high-security vaulting facility within the St. Gotthard Mountain Massif in central Switzerland.

Rockstone is a research house specialized in the analysis and valuation of capital markets and publicly listed companies. The focus is set on exploration, development, and production of resource deposits. Through the publication of general geological basic knowledge, the individual research reports receive a background in order for the reader to be inspired to conduct further due diligence. All research from our house is being made accessible to private and institutional investors free of charge, whereas it is always to be construed as non-binding educational research and is addressed solely to a readership that is knowledgeable about the risks, experienced with stock markets, and acting on one’s own responsibility.

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Research #2 | Prima Diamond Corp.