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BUILDING QUÉBEC’S FIRST DIAMOND MINEPDAC Investor Forum, March 3rd 2015
Matt Manson Orin BaranowskyPresident & CEO Director, Investor Relations
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) assumptions relating to recovered grade, average ore recovery, internal dilution, mining dilution and other mining parameters set out in the Feasibility Study or Optimization Study; (v) assumptions relating to gross revenues, operating cash flow and other revenue metrics set out in the Feasibility Study or Optimization Study; (vi) mine expansion potential and expected mine life; (vii) expected time frames for completion of permitting and regulatory approvals and making a production decision; (viii) future exploration plans; (ix) future market prices for rough diamonds; and (x) 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 Stornoway’s ability to achieve its 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) required capital investment and estimated workforce requirements; (ii) estimates of net present value and internal rates of return; (iii) receipt of regulatory approvals on acceptable terms within commonly experienced time frames; (iv) anticipated timelines for the commencement of mine production; (v) market prices for rough diamonds and the potential impact on the Renard Project’s value; and (vi) future exploration plans and objectives. Additional risks are described in Stornoway's most recently filed Annual Information Form, annual and interim MD&As, 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.
Readers are referred to the technical report dated as of February 28th, 2013 entitled “The Renard Diamond Project, Québec, Canada, Feasibility Study Update, NI 43-101 Technical Report, February 28, 2013” in respect of the January 2013 Optimization Study, and the press release dated July 23, 2013 in respect of the July 2013 Mineral Resource estimate for further details and assumptions relating to the project. The Qualified Persons that prepared the technical reports and press releases that form the basis for the presentation are listed in the Company’s AIF dated July 29, 2014. Disclosure of a scientific or technical nature in this presentation has been reviewed and approved by Robin Hopkins, P.Geol. (NT/NU), Vice President, Exploration, a “qualified person” under NI 43-101 .
3
Stornoway Diamond Corporation TSX:SWY
Notes:
1. Assuming a C$:US$ conversion rate of C$1.10 Project Site, October 21st, 2014
100% Ownership in Renard, Québec’s First Diamond Mine
Fully Permitted; Road Accessible; Strong Social License; Excellent Cost Environment
Fully Financed
July 8th 2014: successfully completed a C$946M1
project financing designed to cover all project costs, contingencies, over-run facilities, financing costs and
working capital requirements.
On Budget, On Schedule
Latest guidance (Q2 FY15) for completion within C$811m capital budget and on schedule.
Project in Construction. First Production 2H 2016
4Why Stornoway? Renard’s Cash Flow PotentialBased on Base Case Economics
Renard is Expected to Generate Substantial Cash Flow over its first 11 years of Mining
After Tax, After Stream Operating Cash Flow of between $150 and $250 million, or $0.20 to $0.30 per share
Assumptions
Mineral reserve case only, averaging 1.6mcarats per annum at US$190/carat
Capital and operating cost parameters as established in the January 2013 Optimization Study and October 2013 LNG FS
Base case diamond pricing from March 2014; No “special” diamonds.
2.5% annual real diamond price escalation
C$:US$ conversion rate of C$1.10
Based on terms of Financing Transaction closed on July 8th 2014
Assumes full conversion to equity of US$81million of Convertible Debentures giving 825 million shares outstanding.
Significant Upside Potential from Resource, Large Diamonds and Processing Capacity
55
Renard: Québec’s First Diamond Mine
6
Lynx
R10
N
R7
R1Hibou
R4
R9R2 R3
R65
R8
Kimberlite Bodies with Measured and Indicated
Resources
Hibou
Lynx
R4
R9R2
R3
R65
Kimberlite Bodies with Resource Potential
R1Hibou
Lynx
Legend
Stornoway PropertiesHydro-Québec FacilityRenard KimberlitesKimberlitic DykeRegional Kimberlites
Hydro-Québec PowerlinesRoute 167 Extension/ Renard Mine RoadRoadExploration/ Mining Projects
LEGEND:
0 1 2
Kilometers
60 0 60 120
Kilometers
Renard
LG3LG2LG4
Laforge 1
Laforge 2
Brisay
Foxtrot Property
StratecoEastmain MineWestern Troy
Troilus Mine
Eleonore
Temiscamie
Mistissini
ChibougamauMatagami
Wemindji
Renard Kimberlite Bodies
Kimberlite Bodies with Inferred Resources
7
The Feasibility: 11 years of mining on 18mcarat Mineral Reserve (24mtonnes)
Permitting and Long Term Plan
The Vision: Deposit still Open
40
60
80
100
120
140
Millions of Tonnes
20
0
TFFE High Range
Inferred Mineral Resource
TFFE Low Range
Indicated Mineral Resource
The Renard Diamond ProjectA Large, High Value Diamond Resource with a Very Long Mine Life Potential
0m
100m
200m
400m
600m
700m
500m
300m
Renard 6529/24cpht Renard 3
103/112cpht
Renard 2104/119cphtRenard 9
53cpht
Renard 460/50cpht
27 mcarat Indicated Mineral Resource
17 mcarat Inferred Mineral Resource
26-48 mcarat TFFE
Source: Stornoway, 2014
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.
8Renard Mine Plan and Key Operating AssumptionsA Combined Open Pit and Underground Operation
0m
100m
200m
400m
600m
700m
500m
300m
Notes
1. Key Assumptions:C$1=US$1, Oil US$95/barrel, 2.5% real terms diamond price growth, 82.9% ore recovery, 23.8% mining and internal dilution, 0cpht dilution grade.
2. Expressed in May 2011 terms. Average price US$190/carat in March 2014 terms.3. Expressed in October 2012 terms, as adjusted in October 2013 LNG FS. Includes
C$754m of costs and contingencies and C$57m of escalation allowance.4. Expressed in October 2012 terms. Operating costs C$54/tonne in October 2013
LNG FS terms. Excludes capitalized preproduction costs.5. Before stream
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.
Reserve Based Mine Plan1
(Jan 2013 FS Optimization and October 2013 LNG Option FS)
Mine Life 11 yearsMineral Reserve 17.9 mcaratsAve. Diamond Price2 $180/caratProduction Rate 2.2 mtonnes/yrAve. Diamond Production 1.6 mcarats/yrGross Revenue (C$M)2 $4,268Initial Capital Costs3 $811mOperating Cost4 $58/t ($76/carat)Operating Margin5 67%Payback 4.8 years
Resource Based Mine Plan(Basis of December 2012 ESIA and Mine Permitting. Not public disclosure consistent with NI 43-101)
Includes the mining of 2.3mcarats of Indicated Resources within a Renard 65 open pit, additional Inferred Resources in Renard 2, 3, 4 and 9, and an increased annual processing capacity up to 2.6mtonnes/yr.
Increased project valuation and mine life.
Renard 65Renard 2 Renard 3
Renard 4
Renard 9
9Stornoway will be a Significant Diamond ProducerCurrent and Future Diamond Producers
Source: Kimberly Process, WWW and Company Reports
Latest 12 Month Sales/ Forecast Future Average Sales 1 De Beers (Anglo/Botswana) $7,114m
2 Alrosa (Russia) $4,976m
3 Dominion Diamond (TSX: DDC) $908m
4 Rio Tinto (ASE: RIO) $901m
5 Petra (L: PDL) $502m
6 Stornoway (note 2; TSX: SWY) $310m7 Lucara (TSX: LUC) $266m
8 Gem Diamonds (L: GEMD) $265m
9 Mountain Province (note 2; TSX: MPV) $259m
10 Firestone (note 3; L: FDI) $123m
11 Others $2,976m
Total $18,600m
DeBeers38%
Alrosa27% Domin-
ion6%
RioT-into5%
Petra3%
SWY2%
LUC1%
GEM1%MPV
1%Fire-stone
1%
Others16%
Notes:
1. Renard estimated at FS average annual diamond production of 1.63 million carats, and WWW March 2014 weighted diamond price of US$190/ct, un-escalated
2. Gahcho Kué estimated at 49% of Revised FS average annual production of 4.45 million carats, and average modeled diamond price of US$118/ct, un-escalated
3. Firestone estimated at FS average annual production of 1.15 million carats at an average price of US$107/ct un-escalated
6 Stornoway (note 1; TSX: SWY) $310m
1010
Renard Construction Progress
11Project Well Prepared for ExecutionConstruction Commenced July 10th 2014
Project Site July 2014
Permitting and Social Licence in Place
Mecheshoo Agreement signed with Crees in March 2012, partnership agreements with Chibougamau and Chapais in July 2012, Quebec and Federal Authorisations in Dec. 2012 and July 2013 respectively.
Access Infrastructure in Place
Renard Mine Road opened to traffic on Aug. 30th 2013. Renard Aerodrome opened to landings Nov. 5th 2013.
Owner’s Team and EPCM in Place
Owner’s construction team located in Longueuil. EPCM contract negotiated with SNC-Lavalin, DRA & AMEC.
LNG Power
LNG power option selected to utilize all-season road and commercial LNG distribution network in Québec.
Favourable Construction Environment
Competitive cost environment and good contractor/ labour availability in Québec.
R65 Borrow Pit
Exploration Camp
Lac Lagopede
Ground Breaking Ceremony July 8th 2014
12Construction ProgressSite Kick-off July 10th, 2014
Mine Admin Building, Feb 2015
Decline Portal, Dec 2014
Accommodation Complex, Jan 2015
Route 167 Extension, Jan 2015
R65 Pit, Oct 2014
PKC
Overburden Stockpile
R2-R3
R65
GarageAdministration Portal
Accommodation
Plant
Waste Rock
Ore Stockpile
13Project ScheduleBased on Construction Mobilization July 10th 2014
Feasibility Study (Complete)
ESIA (Complete)
Public Hearings (Complete)
Reg. Authorizations (Complete)
Specific Operating Permits (50)
Road Construction (Complete)
Project Financing (Complete)
Detailed Engineering
Site Construction
Commissioning and Ramp-up
Commercial Production
2012
2H 2H 2H 2H2H 1H 1H 1H1H
2013 2014 2015 2016
2H1H
2017
Based on the Renard Diamond Project Construction Schedule, Plant Commissioning is Planned for H2 2016 and Commercial Production in Q2 2017.
March 2015
First Vehicle Access
Completion Statusas of Oct 31 2014 (FY15 Q2)
Overall Construction: 10% (planned 9%)
2014 Activities: 68% (planned 62%)EPCM Progress: 11% (planned 14%)
14Renard’s DiamondsLarge Diamond Potential Not Included in Base Case Diamond Valuation Models
March 2014 Diamond Valuations (WWW International Diamond Consultants Ltd.)
Kimberlite Body
Size ofValuation Sample(carats)
WWW March 2014 Sample
Price(US$/carat)1
WWW March 2014 Base Case
Price Model(US$/carat)1
Sensitivities(Minimum to High)
Renard 2 1,580 $187 $197 $178 to $222
Renard 3 2,753 $179 $157 $146 to $192
Renard 4 2,674 $101 $106 ($155)2 $100 to $174
Renard 65 997 $262 $187 $175 to $211
Notes
1. All prices in US$/carat. Samples utilizing a +1 DTC sieve size cut-off.
2. Should the Renard 4 diamond population prove to have a diamond population with a size distribution equal to the average of Renard 2 and 3, WWW have estimated that a base case diamond price model of $155 per carat based on March 2014 pricing. Source: WWW March 2014 Valuation Update
Three Renard 65 diamonds: 9.78 ct and 6.41 ct diamonds recovered from bulk sampling and a 4 carat stone discovered in drillcore in 2003
Base Case Diamond Valuation Estimates Using on Best Practice Methodology
Average diamond price estimate in March 2014 for the Mineral Reserves at US$190/ct (un-escalated) compared to US$180/ct in the January 2013 Optimization Study.
High Quality Production with Large Stone Potential
The Renard kimberlites have similar, but marginally different diamond populations exhibiting a high incidence of large white gems.
Coarse Size Distribution in Renard 2 predicts three to six 50-100ct stones and one to two +100ct stones every 100,000 carats (two weeks).
Substantial revenue potential from large diamonds not accounted for in the base case cash-flow model.
15
Process Plant at 6,000tpd (2.2Mtonnes per annum) nameplate capacity, expandable to 7,000tpd (2.6Mtonnes per annum)
Optimization by DRA Americas Inc. has allowed addition of Large Diamond Recovery (“LDR”) capacity to the flow sheet for no additional capital.
Flow sheet:• Primary jaw crushing to < 230mm• Twin DMS circuits at +1mm -19mm• LDR circuit at +19mm -45mm, scalable
to -60mm• Oversize +45mm to secondary cone
crusher• LDR and DMS tails +6mm -19mm to
tertiary High Pressure Grinding Rolls
Cap-ex (Direct Costs, without Capitalized Op-ex)• Jan 2013 Cap-ex without LDR: $162.7m• Optimized Cap-ex with LDR: $147.1m
Thickening and centrifugal treatment of fines and tails to create a truckable product for dry-stack disposal.
Diamond Processing PlantIn Detailed Design Stage
Crushed ore stockpile
Scrubbing and Screening
DMSCentrifugeCone crushing
HPGR
Water
16
ShareholdingShare Price (TSX-SWY):February 26, 2015 C$ $0.69
52 week High-Low C$ $0.46–$1.22
Average Daily Volume:Last 12 Months 619,240
Average Daily Volume:Since July 8th 2014 683,343
Market Capitalization: C$ 505 million
Total Shares Outstanding: 732 million
Total Options & Warrants Outstanding:(28.0m Options $0.59-$5.36; 123.8m warrants $0.90-$1.21)
152 million
Consolidated Cash1: (as of October 31, 2014) C$ 388 million
Consolidated Debt1: (as of October 31, 2014) C$ 179 million
Undrawn Financing Commitments2: (Subject to Financing Agreement CPs) C$ 462 million
Balance Sheet
Post-Financing Balance Sheet and Capital Structure
Notes1. Unaudited2. Assuming a C$:US$ conversion rate of C$1.10
Investissement Québec 28.7% 22.5%
Orion Mine Finance 24.8% 22.0%
CDPQ 6.1% 6.3%
Float 40.4% 49.2%
DilutedBasic
17Publicly Listed Diamond Producers, Developers and ExplorersConsensus Analyst Views on Value
Ticker Price(26/2/15)
Shares O/S
(mm)
Market Cap
($mm)NAV/sh(1) Current
P/NAV(1) Target (1) % Return to Target
AnnualDividend
Diamond ProducersDominion Diamonds DDC:T $21.44 85.1 $1,825.3 $28.91 0.7x $26.27 23% (n/a)
Gem GEMD:LN £1.53 138.3 £211.2 £2.60 0.6x £2.25 47% (n/a)
Lucara LUC:T $1.94 379.4 $736.0 $2.59 0.7x $2.81 47% $0.04/sh
Petra PDL:LN £1.89 512.1 £968.4 £2.39 0.8x £2.29 21% (n/a)
Diamond DevelopersFirestone FDI:LN £0.34 309.0 £105.1 £0.70 0.5x £0.56 64% (n/a)
Mountain Province MPV:T $4.60 135.2 $621.9 $7.20 0.6x $6.55 42% (n/a)
Stornoway SWY:T $0 730.9 $1.35 0.5x $1. (n/a)
Diamond ExplorersKennady Diamonds KDI:LN $3.75 28.0 $104.9 (n/a) (n/a) (n/a) (n/a) (n/a)
North Arrow Minerals NAR:V $0.68 49.8 $33.9 (n/a) (n/a) (n/a) (n/a) (n/a)
Peregrine Diamonds PGD:T $0.20 226.2 $45.2 (n/a) (n/a) (n/a) (n/a) (n/a)
Shore Gold SGF:T $0.22 246.7 $53.0 (n/a) (n/a) (n/a) (n/a) (n/a)
Notes:
1. Bloomberg Analyst Consensus
Stornoway SWY:T $0.69 732.3 $505.3 $1.38 0.5x $1.14 65%(n/a)
18
Notable Exploration Properties and Joint Ventures
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 (100%)
Aviat (90%)Qilalugaq (100%)
Pikoo (20%)
Pikoo – 80% North Arrow (NAR-V), 20% SWY
2 New Kimberlites discovered in 2013 on 33k Ha property in east central Saskatchewan.
209kg sample of PK150 kimberlite returned 745 diamonds larger than 0.106mm
Spring 2015 drill program underway under an 80/20 JV with North Arrow, pursuant to 2012 Option Agreement.
Qilalugaq – 100% SWY (Subject to NAR Option)
8 Kimberlites on 7k Ha property in eastern Nunavut.
Q1-4 pipe has an Inferred Resource of 48.8mtonnes with total diamond content of 26.1mcarats to 205m.
C$3.7m sampling program underway to recover 500 carat parcel for diamond valuation, pursuant to 2012 Option agreement with NAR to earn an 80% interest, subject to a one time back in right of SWY’s to increase its interest to 40%.
Aviat – 90% SWY, 10% Hunter Exploration Group
Kimberlite sheet and blow system on 197k Ha property located on Melville Peninsula in eastern Nunavut.
TFFE estimated at 12.4 to 16.0mtonnes of kimberlite containing 24.1mcarats to 40.3mcarats.
19
Stornoway Diamond Corporation TSX:SWY
Head Office:1111 Rue St. Charles Ouest,
Longueuil, Québec J4K 4G4
Tel: +1 (450) 616-5555
IR Contact:
Orin Baranowsky, CFA, Director IR
Tel: +1 (416) 304-1026 x103
www.stornowaydiamonds.com
2020
Appendix 1: Stornoway’s C$946M Project Financing for Renard
21
Renard Project Financing Transaction Structure
Type Amount (% of Total) Description
Common Equity C$374M (40%)• C$132M marketed public equity offering of subscription receipts• C$242M private placement to Orion (US$110M), RQ (C$100M) and Caisse (C$22M)
Diamond Stream US$250M (29%) • 20% diamond stream (Orion 16%, Caisse 4%) with ~US$56/ct(1) ongoing payment
Convertible Debentures US$81M (9%) • Provided by Orion; 7 year, 6.25% coupon, 35% conversion premium to equity issue price
Senior Debt C$120M (11%) • Provided by IQ; 7 year amortizing payment, Fixed (QC Bond)+5.75% or Prime +4.75%
Equipment Financing US$35M (4%) • Provided by Caterpillar
Cost Overrun Facility C$48M (5%) • C$20M provided by IQ (same terms as senior debt)• C$28M provided by Caisse (unsecured, 7 year term, 10% coupon)
Total C$946M (100%)
Assumes US$1.00 = C$1.101. Includes reimbursement of marketing expenses
Counter-Party Amount (% of Total)
Orion Mine Finance C$367M (39%)
Investissement Québec/ Ressources Québec C$240M (25%)
Caisse de dépôt et placement du Québec C$105M (11%)
Caterpillar Financial C$39M (4%)
Public C$195M (21%)
Total C$946M (100%)
C$77M
C$811MC$946M
C$70M
C$67M
Financing Funding Requirements
New Financing
Existing Financing
C$48M COF & C$27M Working Capital
Financing Costs & Interest During Construction
Renard Mine Road
Initial Capex & Escalation Allowance
22
Issuer Date Size ($ MM)
Romarco Jan-15 C$300.0
Yamana Jan-15 C$260.2
Osisko Jan-15 C$200.0
Detour Gold Jan-15 C$140.8
Asanko Gold Jan-15 C$40.0
Richmont Mines Jan-15 C$34.0
Lydian International Jan-15 C$16.5
Issuer Date Size ($ MM)
Lundin Oct-14 C$674.2
Franco-Nevada Aug-14 US$500.4
Primero Mar-14 C$224.3
Fortress Oct-14 C$200.0
HudBay Jan-14 US$172.7
Detour Gold Feb-14 C$172.5
Torex Gold Jan-14 C$143.8
Ivanhoe Mines May-14 C$143.8
Stornoway Apr-14 C$132.0
Rubicon Minerals Feb-14 C$115.1
Platinum Group Metals Sep-14 US$113.8
MAG Silver Jun-14 C$79.0
Mountain Province Diamonds Sep-14 C$75.0
Pretium Jul-14 US$69.0
Altius Minerals Apr-14 C$65.0
Issuer Date Size ($ MM)
Barrick Oct-13 US$3,000.2
Detour Gold May-13 C$176.1
Platinum Group Metals Dec-13 C$175.2
Allied Nevada Apr-13 US$150.5
Ivanhoe Mines Sep-13 C$108.0
Guyana Goldfields Jan-13 C$100.0
Paladin Energy Aug-13 C$81.6
Banro Corporation Mar-13 US$67.8
Trevali Mining Nov-13 C$46.0
Santacruz Silver Jan-13 C$40.4
Sulliden Gold Sep-13 C$40.1
Colossus Minerals Jul-13 C$38.0
NGEx Resources Jan-13 C$34.0
Copper Mountain Mining Nov-13 C$30.1
Mountain Province Diamonds Nov-13 C$29.4
Top 15 Equity Offerings
With the Exception of Barrick in 2013, 2014 Saw Larger Equity Financings Than 2013
2015 YTD 2014 2013
Source: Company disclosure.
23
Issuer Date Size ($ MM) Coupon Rate (%) Term (Years) Description
Imperial Metals Sep-14 C$115.0 6.00% 6 Convertible Senior Unsecured Debentures
Stornoway Feb-14 US$81.3 6.25% 7 Convertible Unsecured Subordinated Debentures
Primero Mining Jan-15 US$75.0 5.75% 5 Convertible Unsecured Subordinated Debentures
5N Plus May-14 US$66.0 5.75% 5 Convertible Unsecured Subordinated Debentures
Banro Jun-14 US$40.0 8.00% 3.5 Convertible Preferred Shares
North American Palladium Apr-14 C$30.0 7.50% 5 Convertible Unsecured Subordinated Debentures
North American Palladium Mar-14 C$27.5 7.50% 5 Convertible Unsecured Subordinated Debentures
Argex Titanium Jan-14 C$7.5 8.00% 5 Convertible Unsecured Subordinated Debentures
Issuer Date Size ($ MM) Coupon Rate (%) Term (Years) Description
First Quantum Minerals May-14 US$850.0 7.25% 8 Senior Secured Notes
Lundin Oct-14 US$550.0 7.50% 6 Senior Secured Notes
Goldcorp Jun-14 US$549.3 3.63% 7 Senior Unsecured Notes
China Gold Jul-14 US$500.0 3.50% 3 Guaranteed Corporate Bond
Cameco Jun-14 US$499.8 4.19% 10 Senior Unsecured Debentures
Yamana Gold Jun-14 US$499.5 4.95% 10 Senior Unsecured Notes
Lundin Oct-14 US$450.0 7.88% 8 Senior Secured Notes
Goldcorp Jun-14 US$447.8 5.45% 30 Senior Unsecured Notes
Imperial Metals Mar-14 US$325.0 7.00% 5 Senior Unsecured Notes
AuRico Mar-14 US$304.1 8.50% 6 Senior Secured Second Lien Notes
HudBay Jul-14 US$181.9 9.50% 6 Senior Unsecured Notes
Stornoway Apr-14 C$120.0 Prime + 4.75% 10 Senior Secured Loan
Trevali Mining May-14 US$52.5 12.50% 5 Senior Secured Notes
Select Recent Debt & Convert Offerings
Debt Issuances
Convertible Debt Issuances
Source: Company disclosure.
24
Investor - Issuer Date Size ($ MM) DescriptionFranco-Nevada - Lundin Oct-14 US$648 Franco-Nevada to receive 68% of payable Au and Ag production until 720k oz Au and 12MM oz Ag are delivered
from 100% of Candelaria; thereafter reduces to 40% of LOM payable metals from 100% of the mine. Acquisition f inancing package also consists of C$50MM private placement exclusive of stream value.
Orion Mine Finance & Caisse de dépôt - Stornoway
Apr-14 US$250 Stream agreement for 20% interest on run of mine diamond production from certain kimberlite bodies from the Renard Project. Investors to pay the Issuer in 3 deposits.
Gold Holding - Banro Aug-14 US$121 Streams on Banro's Tw angiza and Namoya mines for US$41MM and US$80MM, respectively. Investor to receive 40k oz Au from Tw angiza mine over 4 years. Investor to also receive 10% LOM Au production from Namoya including Au processed at the site from other mines w ithin 20 km; maximum deliverable Au of 12k oz per annum.
Franco-Nevada & Sandstorm - True Gold Aug-14 Up to US$120 Franco-Nevada (75%) & Sandstorm (25%) to receive 100k oz Au over 5 years, and 6.5% LOM Au production from True Gold's Karma Project thereafter. True Gold holds an 18 month option to increase funding by US$20MM for an additional 30k oz Au. Ongoing payments of 20% of spot Au.
Royal Gold - Rubicon Feb-14 US$75 Royal Gold to receive 6.3% of Au production from Rubicon's Phoenix Project until 135k oz have been delivered and 3.15% LOM Au production thereafter. Ongoing payments of 25% spot Au. Advance deposit payments from Royal Gold payable in 5 installments.
Orion Mine Finance - Aldridge Aug-14 US$40 Consists of US$5MM private placement and US$35MM 2-year bridge loan facility. Bridge loan bears interest at 9% plus the greater of 3 month USD LIBOR and 1%. Aldridge also entered into off take agreements w ith Orion for ~20% of Pb & ~50% of Au production over the f irst 10 years of the mine plan.
Franco-Nevada - Klondex Feb-14 US$35 Franco-Nevada to receive 38k oz Au by December 31, 2018, and a 2.5% NSR royalty on Klondex's Fire Creek and Midas properties commencing 2019. Gold f inancing package provided to support Klondex's acquisition of the Midas Mine and Mill Complex from New mont.
JMET - Santacruz Silver Sep-14 US$28 5-year pre-paid forw ard silver purchase agreement. JMET to receive 4.6MM oz Ag through August 2019 w ith no ounces delivered over the f irst 12 months. Ongoing payments of spot Ag less an undisclosed f ixed discount.
Quintana - Arian Silver Oct-14 US$16 Quintana to receive 78.2% of Zn and Pb from San José until 32MMlbs and 38MMlbs, respectively, are delievered, and 27.4% thereafter for 50 years. Issuer can buy 50% of stream for US$11MM before 2017. Investor also acquires US$16MM of senior secured convertible notes to be restructured into new notes (8% interest).
Orion Mine Finance - Claude Mar-14 US$12 3.0% NSR royalty on Claude's Seabee Gold Operation. The NSR provides Claude w ith the option to repurchase half of the NSR for US$12MM until December 31, 2016.
BlackRock - Avanco Jul-14 US$12 2.0% NSR royalty on Cu; 25.0% NSR royalty on Au and 2.0% NSR royalty on all other metals produced from the Issuer's Antas North and Pedra Branca licensed areas. Additionally, BlackRock to receive a 2% NSR Royalty on other discoveries w ithin Avanco's current licence portfolio.
Sprott - Veris Gold Apr-14 US$8 0.5% NSR royalty on Veris Gold's Jerritt Canyon mines and processing plant.
Select Recent Alternative Finance Agreements
Sourc: Company disclosure.
2525
Appendix 2: Renard Technical Data
26
Probable Mineral Reserve Mining Recovery Factors Utilized in the Reserve Calculation
Kimberlite Grade(cpht)
Tonnes(millions)
Contained Carats(Millions)
Internal Dilution
Mining Recovery
MiningDilution
Renard 2 OP 95 1.31 1.24 0.0% 96.0% 7.1%Renard 2 UG 80 17.03 13.62 7.0% 82.4% 20.2%Renard 3 OP 93 0.72 0.67 0.0% 96.0% 10.5%Renard 3 UG 84 1.00 0.84 21.1% 85.0% 14.0%Renard 4 UG 42 3.72 1.58 1.4% 78.2% 14.0%
Total 75 23.79 17.95 5.9% 82.9% 17.9%
Notes: Reserve categories are compliant with the "CIM Definition Standards on Mineral Resources and Reserves". Totals may not add due to rounding. Grades are estimated at a +1DTC sieve size cut-off.
R2 ; 83%
R3, 8%R4, 9%
Revenue
R2 ; 77%
R3; 7%
R4; 16%Tonnage
R2 ; 83%
R3; 8%R4; 9%
Carats
NI 43-101 Probable Mineral ReservesJanuary 28th 2013
27
Notes: 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. Indicated Mineral resources are Inclusive of the Mineral Reserve. Totals may not add due to rounding. Grades are estimated at a +1DTC sieve size cut-off.
Renard NI 43-101 Mineral ResourcesJuly 23rd 2013
Kimberlite Grade(cpht)
Tonnes(millions)
Contained Carats(Millions)
Renard 2 – Total 100 18.58 18.66Renard 2 104 17.71 18.38Renard 2 CRB-2a 32 0.87 0.28
Renard 3 103 1.76 1.82Renard 4 60 7.25 4.31Renard 65 29 7.87 2.30
Total Indicated 76.4 35.45 27.09
Renard 2 – Total 64 11.77 7.47Renard 2 119 5.23 6.23Renard 2 CRB 19 6.54 1.24
Renard 3 112 0.54 0.61Renard 4 50 4.75 2.37Renard 9 53 5.70 3.04Renard 65 24 4.93 1.18Lynx Dyke 107 1.80 1.92Hibou Dyke 144 0.18 0.26
Total Inferred 56.8 29.67 16.85
28
Notes: The potential quantity and grade of any exploration target (previously referred to as “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. The exploration upside for the Renard kimberlite pipes has been determined by projecting reasonable kimberlite
volumes from the base of the inferred Resource to a depth of 700m below surface. In the case of the Lynx and Hibou dykes, the exploration upside was established on the basis of known drill intersections of kimberlite for which insufficient diamond sampling exists to adequately estimate a diamond resource grade.
Target for Further ExplorationJuly 23rd 2013. Changes to Previous January 2011 Estimates in Italics
Kimberlite Grade(cpht)
Tonnes(millions)
Contained Carats(Millions)
Renard 2 104 to 158 4.0 to 4.6 4.2 to 7.3Renard 3 105 to 168 0.8 to 1.7 0.8 to 2.8Renard 4 50 to 77 11.1 to 15.4 5.6 to 11.8Renard 9 52 to 68 3.9 to 6.3 2.0 to 4.3Renard 65 25 to 33 29.0 to 40.9 7.3 to 13.5Lynx Dyke 96 to 120 3.1 to 3.2 3.0 to 3.8Hibou Dyke 104 to 151 2.7 to 2.9 2.9 to 4.3Total Exploration Upside
54.6 (-0.8%) to 74.9
(-0.8%)25.7
(+9.1%) to 47.8(-1.4%)
29
Chronology of Renard Studies
Feasibility StudyReleased on November 16th 2011. NI 43-101 Technical Report filed December 29 2011.
11 Year Mine Plan based on 18 Mcarat Mineral Reserve derived from January 2011 NI 43-101 Resource.
Long Term Business PlanCompanion study to the Feasibility Study with an extended mine plan incorporating the project`s 17.5 million carats of Inferred Mineral Resources.
Basis of overall mine design and project permitting. Not part of the project`s public disclosure, consistent with Canadian reporting standards
Optimization Study
Released on January 28th, 2013. NI 43-101 Technical Report filed March 2013.
Refined of Feasibility mine design, including shaft deferral and a modified underground mining sequence.
11 Year Mine Plan based on 17.9 million carat Mineral Reserve.
Resource Update Released July 2013. NI 43-101 Resource update with 14% increase in Indicated Resource contained carats
LNG Feasibility Study Released October 2013. Modified project Cap-ex and Op-ex for LNG powered gen-sets
30January 2013 Optimization Study Project Assumptions, Valuation and Pay-Back in the January 2013 FS Optimization Study
Key Assumptions in the Financial Model1
Mining Parameters
Reserve Carats (M) 17.9Tonnes Processed (M) 23.8Recovered Grade (cpht) 75Average Ore Recovery (%) 82.9%Average Mining Dilution (%) 17.9%Dilution Grade (cpht) 0Processing Rate (Mtonnes/annum) 2.2Mine Life (years) 11
Cost Parameters
Initial Cap-ex (C$M)2 $752LOM Cap-ex (C$M)4 $1,013Oil Price (US$/barrel)2 $95LOM Op-ex (C$/tonne)2 $57.63LOM Op-ex (C$/carat)2 $76.63
Revenue Parameters
Gross Revenue (C$M)2 $4,268Marketing Costs 2.7%DIAQUEM Royalty 2.0%Cash Operating Margin (C$M)2 $2,693% Operating Margin 67%Income Tax, Mining Duties and IBA Payments (C$M)1 $625After Tax Net Cash Flow (C$M) $1,084
Diamond Price
Parameters3
Renard 2 and Renard 3 (US$/carat) $182Renard 4 (US$/carat) $164Diamond Price Escalation 2.5%Exchange rate 1C$=1US$
Schedule Parameters
Effective Date for NPV Calculation Jan. 1 2013Construction Mobilization/Early Works Aug. 1 2013Plant Commissioning Commences Dec. 1 2015Commercial Production Declared Jun. 1 2016
Valuation Results5 (C$m)
Pre-Tax After Tax NPV5% $894 $537
NPV7% (Base Case) $683 $391 NPV9% $514 $274
IRR 20.4% 16.3% Pay-Back (years) 4.69 4.82
Notes
1. Optimization Study, released January 28th 2013.
2. Expressed in October 2012 terms.
3. Expressed in May 2011 terms.
4. Expressed in nominal terms.
5. Expressed in de-escalated nominal terms.
31
Liquefied Natural Gas Power Plant
The Renard Diamond Project will be powered using Liquid Natural Gas (“LNG”) fuelled gen-sets, with daily supplies of cryogenic LNG from GazMetro in Montreal utilizing the Renard Mine Road.
The Renard LNG plant will comprise seven 2.1MW rated gas gen-sets, providing sufficient power generation capacity for the project’s normal operating specification of 9.5MW.
LNG has significant cost and environmental advantages over traditional diesel powered gen-sets and a Hydro-Quebec power-line option.
Diesel will continue to be used for the mobile mining fleet and construction activities.
32Liquefied Natural Gas Power PlantFeasibility Study Released October 2013
An LNG fuelled powerplant for Renard offers many advantages over diesel:• Greatly reduced annual operating costs of $8m to $10m per year, for a small incremental
capital cost of $2.6m.• Up to 43% less greenhouse gas emissions.• stable supply market utilizing existing commercial distribution network within Québec.• Elimination of on-site propane, as LNG will be used for building and underground mine
heating
Cost Improvements with LNG 2013 Optimization Study with Diesel
2013 Optimization Study with LNG
Unit Power Cost (C$/kWh) 1 $0.299 $0.188 (-37%)Unit Operating Cost (C$/tonne) 1,2 $57.63 $53.84 (-7%)Initial Capital Cost (C$m) 1 $752.1 $754.0 (+0.3%)Life of Mine Capital Cost (C$m) 1,3 $1,013 $1,010 (-0.3%)Annual Diesel Consumption (million litres) 27.5 5.9 (-79%)Annual LNG Consumption (thousand m3/annum) n/a 41.7Annual Propane Consumption (thousand m3/annum) 3.5 n/a
Notes
1. 2013 Optimization Study costs expressed in October 2012 terms.
2. Excludes capitalized preproduction costs.
3. Includes all initial, sustaining and deferred capital, contingencies and escalation
Key Assumptions
Based on the 11 year reserve-based mine life (17.9 mcarats) contained within the 2013 Optimization Study, with a normal operating load of 9.49MW, C$1=US$1, Oil US$95/barrel
3333
Appendix 3: The Diamond Market
34Major Diamond Mines and Development Projects WorldwideFew Enough Mines to Fit on One Map
South Africa • Venetia (De Beers)
• Finsch, Cullinan, Kimberley (Petra Diamonds)
• Lace (DiamondCorp)
Tanzania• Williamson (Petra Diamonds)
Russia • Arkhangelsk District (Alrosa)
• Yakutia District (Alrosa)
• Grib (LUKOIL)
India• Bunder (Rio Tinto)
Australia• Argyle (Rio Tinto)
• Ellendale (Kimberly Diamonds)
Canada• Ekati (Dominion)
• Diavik (Rio Tinto/Dominion)
• Victor, Snap Lake, Gahcho Kué (De Beers)
• Renard (Stornoway)
• Fort a la Corne (Shore Gold/Newmont)
Botswana• Jwaneng, Orapa (De Beers)
• Ghaghoo (Gem Diamonds)
• Karowe (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)
• Mothae (Lucara)
35
The Challenge of Finding and Developing New Diamond Mines
“Tier 1” defined as mines with Ultimate reserves greater than US$20B: Jwaneng, Orapa, Mir, Udachnya, Venetia, Catoca, Premier
Kimberlite Discoveries Since 1870
Kimberlites Discovered
Diamondiferous Economic Tier 1*1
10
100
1,000
10,000 6,800
1,000
65
7
875420
20
Recent Diamond Mines
Source: De Beers/SWY
Economic kimberlites represent just 1% of all discoveries made since 1870 (1.7% in Canada)
Time from Discovery to First Production
Ekati (1998, BHPB, now Dominion) 7 years
Diavik (2002, Rio Tinto/Dominion) 9 years
Victor (2008, De Beers) 20 years
Snap Lake (2008, De Beers) 11 years
Karowe (2012, Lucara) 10 years
Grib (2013, Lukoil) 18 years
Ghaghoo (2014, Gem) 23 years
Renard (2017, Stornoway) 16 years
Gahcho Kué (2017, DeBeers/MPV) 21 years
Bunder (2019, Rio Tinto) 15 Years
Projects are taking longer to develop
36The Diamond PipelineAn Industry with Many Intermediaries
Source: Tacy D.I.B. 2014
Mine Production Rough Trading and Diamond Polishing Diamond Jewelery
ProductionCost
ProductionValue
Mine Sales toIndustry
Rough SalesTo Cutting
Centres
Value of PolishedProduced
Value ofDiamonds in
RetailJewelery
Sales
Retail SalesOf Diamond
Jewelery
Value in US$Bterms of eachstage of the
diamondpipeline
$7.0B $15.1B $15.3B $15.6B $21.6B $22.6B
$74.5B
EstimatedAverage Marginsafter Costs (%)
Rough Mining: 0 to 50% Rough Dealing: 0 to 10% Polishing:-10 to 15%
JeweleryManufac: -10
to 10%
JeweleryRetail: 20
to 50%
37
A Snapshot of Rough Diamond Supply
Industry Supply Themes
146mcarats produced in 2013 (US$18b)
No return to peak diamond production of 176mcarats achieved in 2005
Maximum 20mcarats new production on deck assuming all new projects meet proponents published production and schedule estimates
Consensus forecast of 2% supply CAGR (in carat terms) to 2018, declining thereafter
Potential or Actual New Projects
Rough Diamond Supply
SourcesThe Global Diamond Report, December 2014: Bain & Co/Antwerp World Diamond CentreThe Diamond Insight Report, September 2014: McKinsey/De Beers
38
A Snapshot of Rough Diamond Demand
Rough Diamond Demand
Supply and Demand
Industry Demand Themes
Diamond jewelry/polished diamond demand growth tied to GDP growth in principal markets
Diamond jewelry sales strongly correlated to market demographics (age, gender, wealth)
US still dominant polished diamond market (40% in 2013, 2% CAGR 2008-13) with China the growth market (15% in 2013, 20% CAGR 2008-13)
Consensus forecast of c.5% rough demand CAGR (in dollar terms) over next 10 years
Consensus forecasts of 2-4% real rough diamond price CAGR over next 10 years given supply/demand imbalance
SourcesThe Global Diamond Report, December 2014: Bain & Co/Antwerp World Diamond CentreThe Diamond Insight Report, September 2014: McKinsey/De Beers
39
Rough Diamond Pricing 2009-2014
A tracking of the diamond market since the publication of the November 2011 FS and January 2013 Opt. FS indicates rough diamond prices have generally remained within the bounds of sensitivities contained within the FS financial model (May 2011 spot prices and a 2.5% real terms annual price escalator).
WWW Rough Diamond Price Index
COMEX Gold
May 2011 FS Diamond Valuation
FS 2.5% Price Model (Nominal, adjusted
for CPI) with +/- 10% Sensitivity
1-Jan-09 1-Jan-10 1-Jan-11 1-Jan-12 1-Jan-13 1-Jan-14 1-Jan-1550
100
150
200
250
300
350
WWW Rough Index, CPI Adjusted Renard Model Price Growth
Inde
x to
200
9=10
0
4040
Appendix 4: Management Biographies
41
Hume KyleIndependent
Zara BoldtCFO and VP
Finance
Pat GodinCOO & Director
Matt Manson President, CEO
& Director
John LeBoutillierIndependent/ IQ Designate
Monique MercierIndependent/ IQ Designate
Peter NixonIndependent
Ebe ScherkusIndependent/
Board Chairman
Executive Officers
Non-Executive Directors
Key Managers
Head Office: Longueuil, Québec
Exploration Office: North Vancouver, BC
Community Offices: Mistissini & Chibougamau Québec
Stornoway’s Board and Management Team
Serge VézinaIndependent
Yves PerronVP Engineering & Construction
Ghislain Poirier
VP Public Affairs
Brian Glover VP Asset Protection
Martin BoucherVP Sustainable Development
Robin Hopkins
VP Exploration
Orin Baranowsky
Director, IR
Douglas SilverOrion Designate
Ian HollVP Processing
Annie Torkia- Lagacé
VP Legal Affairs
Gaston MorinIndependent/ IQ Designate
42
Pat GodinCOO & Director
Biographies
Ebe ScherkusChairman of the
Board
Matt Manson was appointed President of Stornoway Diamond Corporation in March 2007 and subsequently President & CEO in January 2009. Between 1999 and 2005 he was employed by Aber Diamond Corporation (now Dominion 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. 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 18 years of experience in diamond exploration, development and production.
Pat Godin joined Stornoway as COO in May 2010. He was previously VP, Project Development for GMining Services, responsible for the development of the Essakane Mine in Burkina Faso under contract to IAMGOLD, VP Operations for Canadian Royalties, and President and General Manager of CBJ-CAIMAN S.A.S., a French subsidiary of Cambior / IAMGOLD. 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 and is a member of the “Ordre des Ingénieurs du Québec”. He is the Chairman of the Board of Geomega Resources and a director of Orbit-Garant Drilling.
Mr. Scherkus served as the President and Chief Operating Officer and a director of Agnico-Eagle from 2005 to February 2012. Prior to his appointment as President and Chief Operating Officer in December 2005, Mr. Scherkus served as Executive Vice-President and Chief Operating Officer from 1998 to 2005, as Vice-President, Operations from 1996 to 1998, as a manager of Agnico Eagle LaRonde Division from 1986 to 1996 and as a project manager from 1985 to 1986. Mr. Scherkus is a graduate of McGill University (B.Sc.), a member of the Association of Professional Engineers of Ontario and past president of the Québec Mining Association. He is Chairman of the Board of Premier Gold Mines Ltd.
Matt Manson President, CEO
& Director
4343
Appendix 5: Site Photos
44
Waste Rock
Processed Kimberlite Containment (PKC)
Overburden StockpileR2-R3
Ore Stockpile
R65
Accommodation Complex
Plant
Road from Chibougamau
Garage
AdministrationPortal
General Project Arrangement
Fuel Storage
2
3 4
5
1
Early Construction Focus
45Site ProgressSite Overview by Week 10
Project Site September 23rd, 2014
Construction Camp
3: Major Facilities Pads (Plant, Garage, Admin)
2: Permanent Camp Construction
Pad and Box-Cut for Decline Portal
Future R2-R3 Pit Location
5: Water Management
Ditches
4: Overburden Storage
1: R65 Borrow Pit
46Site ProgressCivil Works at Plant, Garage and Mine Dry Sites
Site Overview, September 23rd 2014
Permanent Camp Construction Plant Site Preparation
Site Overview, October 11th 2014
Permanent Camp Dormitories
Mine Dry and Garage Pads
Process Plant and Crusher Pads
47Site ProgressPreparing Plant Site
Looking Northwest, October 21st 2014 Looking Southwest, October 21st 2014
Exploration Camp
Plant, Mine Dry and Garage Pads
Looking North
Accommodation Complex Plant Footprint
48Site ProgressPermanent Camp Construction
Permanent Camp Pad, August 2014 Module Foundations, September 23rd 2014
Three Wings In, October 11th 2014 Kitchen and Recreational Facilities, Dec 2014
49Site ProgressPermanent Camp Construction: Occupied January 2015 Ahead of Schedule
Garage/Potable Water Plant
Camp Construction, February 2015
Dormitory Wings Kitchen & LeisureReception Building
Permanent Kitchen, December 2014 Kitchen and Dining, January 2015
Mine Admin Building, Jan 30th 2015
50Site ProgressPortal for Underground Decline, Water Treatment Facilities
Decline Portal, December 2014 Water Treatment Facilities, January 2015
Waste Water Tanks, September 2014Potable Water Intake, January 2015
51Access Infrastructure CompleteThe 240km long Route 167 Extension and the Renard Aerodrome
Eastmain River Bridge Renard Aerorome
July 2014July 2014
January 2015
