Presentation on theme: "1 A New Force in the Canadian Diamond Industry RBC Diamond Conference London, May 15, 2008."— Presentation transcript:
1 A New Force in the Canadian Diamond Industry RBC Diamond Conference London, May 15, 2008
2 Forward Looking Information This presentation may contain forward looking statements, being statements which are not historical facts, and discussions of future plans and objectives. There can be no assurance that such statements will prove accurate. Such statements are necessarily based upon a number of estimates and assumptions that are subject to numerous risks and uncertainties that could cause actual results and future events to differ materially from those anticipated or projected. Important factors that could cause actual results to differ materially from the Stornoway's expectations are in Stornoway documents filed Stornoway disclaims any intention or obligation to revise or update such statements. from time to time with the Toronto Stock Exchange and provincial securities regulators, most of which are available at www.sedar.com.
Our Vision To create a successful growth oriented diamond company that succeeds in the practical business of mining and selling rough diamonds, and which pursues an aggressive exploration strategy to seek and develop world- class diamond mining opportunities in a market that has become increasingly under-supplied.
4 Quality Diamond Assets in Canada Ownership in Renard, one of Canada’s largest undeveloped diamond resources with potential for near term cash flow and leveraged against strong, predicted price growth Four advanced diamond projects capable of adding reserves One of Canada’s leading, diversified exploration portfolios with “blue-sky” potential
5 Stornoway as an Investment Opportunity Lowest Risk Canadian Portfolio With Large Exploration Upside For Investors
6 Capital Market Profile Market Cap (millions) $1.74 billion *as of April 30th, 2008 $1.93 billion
7 Financial Platform As of April 30, 2008 Market Capitalization: (based on average close for last 2 months) $70 million Total Shares Outstanding:200 million Cash Balance:$11 million Fully Diluted Working Capital: $22 million Convertible Debentures: (12% per annum interest; matures March 16, 2009) $20 million
9 Canada’s Place in Global Diamond Exploration World Diamond Exploration Expenditures 2006 Canada Russia Australia South Africa Botswana Democratic Republic of Congo Namibia Angola Namibia$8.70 Sierra Leone$18.10 Australia$19.40 Democratic Republic of Congo$24.90 Botswana$30.10 Russia$35.80 South Africa$70.60 Angola$78.20 Canada$305.80 Sierra Leone Expenditures in Millions (Cdn) Expenditure Information from Metals Economics Group, Corporate Exploration Strategies 2006 and Courtesy of the Ontario Ministry of Northern Development and Mines
10 Canadian Project Pipeline Development-Track Renard, Quebec Advanced Exploration Aviat, Nunavut Churchill, Nunavut Qilalugaq, Nunavut Timiskaming, Quebec & Ontario Early-Stage Exploration Over 12 million acres of prospective ground in Canada over 150 kimberlites discovered to date. Declining Risk Profile
11 Stornoway’s Principal Properties (encompassing 155 kimberlites) 11 Aviat (11) Renard (14) Qilalugaq (16) Churchill (79) Timiskaming (9) Pikoo Blackstone Slave Craton (6) Mackenzie Coronation Gulf (10) Wales Island (10) Legend Development Track Project Advanced Stage Projects Grass Roots Projects Areas of Exploration Focus Calling Lake N. Alberta
12 The Renard Kimberlites, Otish Mountains, Québec Development Track Projects
The Foxtrot Project and Renard Kimberlites- Renard” 1-10 kimberlite pipes and “Lynx-Hibou” kimberlite dyke system within “Foxtrot” property 50/50 Joint Venture between Ashton (a subsidiary of Stornoway) and SOQUEM Discovered 2001-2003 Québec is routinely assessed as one of the top mining jurisdictions in the world Agnico-Eagle Mines Ltd. is Stornoway’s largest shareholder and a leading mine developer in Québec. Montreal Calgary Winnipeg Toronto Aviat Renard Qilalugaq Churchill Timiskaming Pikoo Blackstone Slave Craton Mackenzie Coronation Gulf Wales Island Legend Development Track Project Advanced Stage Projects Grass Roots Projects Areas of Exploration Focus Calling Lake N. Alberta
14 Renard Kimberlite Bodies Renard LG3 LG2 LG4 Laforge 1 Laforge 2 Brisay Foxtrot Property Strateco Eastmain Mine Western Troy Troilus Mine Eleonore Temiscamie Mistissini Chibougamau Matagami Wemindji Legend Stornoway/Soquem JV Properties HydroQuebec Facility Renard Kimberlites Kimberlitic Dyke Kimberlitic Pebbles & Boulders Diamond in Till Anomaly Outline HydroQuebec Powerlines Winter Road Road N Ice Direction R7 R1 Southeast Anomaly North Anomaly South Anomaly 2 km Renard Core Area North Dyke Discovery SE Dyke Discovery R10 R7 R1 Hibou Lynx
The Renard Kimberlites are Complicated and have Variable Grades (Renard 2 Geological Model, February 2008) Plan View Halo Oblique View (no Halo) Brown (kimb2b) Blue (kimb2a) HK CRB West View
The Renard Kimberlites are Complicated and have Variable Grades (Renard 3 Geological Model, February 2008) Looking North Looking North (No Halo) Blue (kimb3b) Brown (kimb3f) Green (kimb3i) CRB+HK Grey (kimb3g) ? Plan View Halo
Renard Bulk Sample Program (2006-2007) Extraction and processing of 10,000 tonne bulk sample from Renard kimberlites 2, 3 and 4. Combination of underground decline and surface trenching On-site treatment by DMS of 6,000 tonnes. Valuation of 6,500 carat sample October 2007, revised March 2008. Underground SamplingSurface Sample Renard 4 Underground Sample Renard 2 & 3
18 Renard 2Renard 3Renard 4 (Northern Complex Zone) LynxHibou Tonnes Treated2,4481,9292,09949431 Carats Recovered1,6022,6812,72352940 Largest Diamond Recovered (carats) 15.4610.155.9221.531.01 Diamond Recovery Range (cpht) 1 26 to14478 to 22380 to184n/a Average Diamond Recovery (cpht) 1 65139130108126 Valuation, with sensitivities: WWW March 08 US$121 ($108 to $136) US$79 ($71 to $87) US$66 ($56 to $97) US$66 Bulk Sample Rock Value ($/tonne) $79$168$103$71$83 2007 Bulk Sample Results 1 The estimated diamond content, expressed as carats per hundred tonnes, may not be representative of the overall diamond content of the body due to a number of factors, including location and size of the samples
19 Agnico-Eagle will author the main pre-feasibility report with support and contributions from AMEC Americas Ltd. Four Study Modules Module 1: Resource (AMEC) Module 2: Mine (AEM) Module 3: Plant (AMEC) Module 4: Cap-ex, Op-ex and Financial Model (AEM) Pre-Feasibility Study June 2007 : Pre-feasibility Phase 1 Commences November 2007: Pre-feasibility Phase 2 Commences. First results beginning Q2 2008. 10.15 carat
20 A Renard Diamond Resource Renard 3 Bulk Sample Diamonds 10.15ct 4.94ct 4.26ct 6.36ct 4.89ct Lynx Mini-Bulk 5.7ct Renard 3 Mini-Bulk 4.3ct The Renard Kimberlites are Small Grades are Variable, but Good by World Standards The Renard Diamonds are High Quality with: Good crystal shapes Colours of White to Brown No “Boart” or Industrial Grade diamonds A potential for large “Special” diamonds
By weight... By value… Renard Diamonds: Value Upside with Large Gems 21 At Renard, Quality Improves with Size! SWY Internal Analysis of 6,500 carat sample
Conceptual Site Layout (Working Draft) Lynx 1 000 m Winter road Processed Kimberlite and Strip Rock Overburden Storage Open Pit R2 & R3 Water Treatment Open Pit R4 & R9 Hibou Permanent Road Plant and Accommodation
Plant and Production Rate Investigating 3,500 and 5,000 tonnes per day options 1.3m to 1.8m tonnes/year or 1m to 1.5m carats/year Recovery of large diamonds a priority for flow sheet design Proven technology on diamond recovery Investigating onsite Genset against powerline and cheap hydro: Cap-ex/Op- Ex trade off 24
Renard Development: An Optimistic Schedule 25 200020012002200320042005200620072008200920102011201220131999 20002001200220032004200520062007200820092010201120122013 1999 Grassroots Exploration Discovery Staged Mini-Bulk Sampling Bulk Sampling Pre- Feas Feas./ Permitting Construction Prod. The Timing and Nature of Infrastructure Development is Key ? ?
26 Road and power access are critical determinants for the economic viability of the Renard Project. Stornoway has conducted scoping-level studies for a 4-season forestry grade road from both the north (154km) and the south (238km). Stornoway lends full support to a Provincial and Federal Government, Community and Industry partnership created to facilitate a permanent “Route Monts Otish”. Infrastructure: Access Routes and Powerlines Stornoway/Soquem JV Properties HydroQuebec Facility Kimberlitic Pebbles & Boulders HydroQuebec Powerlines Road Renard LG3 LG2 LG4 Laforge 1 Laforge 2 Brisay Strateco Eastmain Western Troy Troilus Mine Eleonore Temiscamie Mistissini Chibougamau Matagami Wemindji Potential Powerlines Potential Road
Canadian Diamond Project Resources and Cap-Ex MinesDevelopment ProjectsDevelopment-Track Projects Source: 2005 Mine Estimates and 2006 Project Forecasts
Renard: Opportunities and Challenges The Opportunities Renard has the potential to become Quebec’s first diamond mine. A producer of large, high value gems 200-300 jobs during construction, 150-200 jobs during operation Potentially 1m to 1.5m carats/year for more than 10 years Local purchasing, employment, and capacity development The Challenges The Project is modest in scope and requires careful, cost-conscious management. Government and community support for infrastructure development is key.
30 Stornoway’s Property Portfolio (as at July 02, 2007) 12.88 million acres total (in 34 active projects) 0.40 million acres ‘development’ stage (Renard) 5.04 million in ‘advanced’ stage projects (Aviat, Churchill, Qilalugaq and Timiskaming) 7.44 million acres in ‘early stage’ projects (Pikoo, Botswana, Blackstone, Itza, etc.)
32 Aviat (11) Aviat (90%) Budget for 2008 is $3.1 million Legend Development Track Project Advanced Stage Projects Grass Roots Projects Areas of Exploration Focus
33 Aviat – Ongoing Exploration 11 kimberlites to date (8 dyke-like) good grades from those tested to date (average 75-100 cpht in early stage sampling; 162 cpht from 20.6 tonne sample of AV267) diamonds derived from similar source best 2007 intersection: 7.0 m (dykes), 87.0 m (AV9 pipe) AV9 came back significantly diamondiferous; 2008 focus Press Releases of January 21 st and 29 th 2008 162 cpht and 3.64 Carat Diamond Recovered from AV267 Kimberlite
6.2 t 80 cpht 20.6 t 162 cpht 2.1 t 48.9 t 89 cpht Schematic Cross Section Aviat 2007 Exploration Summary
20.6 t 162 cpht 6.2 t 80 cpht AV9 AV267 AV2 Upper 150 m ? ? ? ?? ? ? SN Aviat’s Eastern Sheet Complex: area of focus preliminary resource model currently being formulated for AV267 body; larger sample planned for 2008 AV9 body, discovered late in 2007, will be focus of spring drilling program commencing in April, 2008 dimensions not currently known of AV9; larger sample required to understand diamond carrying capacity.
36 Advanced Exploration Projects 2007 Budget ~ $7.0 million Project% InterestKimberlites Grades cpht Tonnage Potential Bulk Sampling Diamond Quality Aviat74.10%1175-142High85 tonnespending Qilalugaq50-60%1630High42 tonnespending Churchill41.86%70+40-200Medium400 tonnespending Timiskaming100%915Medium600 tonnesHigh Evaluation Work Completed to Date
38 Grass Roots Exploration Budget 2007 = $3.0 million Blackstone Slave Craton Mackenzie Legend Areas of Grass Roots Exploration Focus Foxtrot Timiskaming Itza Calling Lake N. Alberta 8 drill ready projects
39 Conclusion Stornoway Offers: A new and unique diamond investment opportunity at the right time Strong, experienced management One of Canada’s leading technical teams with a track record of discovery Diversified project pipeline including grass roots and development track assets Future cash flow potential A company well positioned for growth
40 A New Force in the Canadian Diamond Industry www.stornowaydiamonds.com