stornoway diamond corporation corporate update presentation

BUILDING QUÉBEC’S FIRST DIAMOND MINEUpdate December 3rd, 2013

Matt MansonPresident, CEO & Director

Orin BaranowskyDirector of 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) the assumption that a production decision will be made, and that decision will be positive; (v) anticipated timelines for the commencement of mine production; (vi) market prices for rough diamonds and the potential impact on the Renard Project’s value; and (vii) 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 December 29th, 2011 in respect of the November 2011 Feasibility Study for the Renard Diamond Project, the technical report dated February 28th, 2013 in respect of the January 2013 Optimization Study, and the press release dated July 23rd 2013 in respect of the July 2013 Mineral Resource estimate for further details and assumptions relating to the project. These technical reports and this press release list the names of the Qualified Persons in respect of these studies.

3

Stornoway Diamond Corporation TSX:SWY

Strong Base Case Economics; World Class Upside

All-Season Access Road Opened Ahead of Schedule and Under Budget

Mining Lease and Certificates of Authorization Issued

Strong Public Support in Québec; IBA in Place

Excellent Diamond Supply & Demand Fundamentals

100% Ownership in Renard, Québec’s First Diamond Mine

One of the World’s Few New Diamond Projects Under Development

Focused on the Timely Completion of Final Project Financing

4

Hume KyleIndependent

Zara BoldtCFO and VP

Finance

Pat GodinCOO & Director

Matt Manson President, CEO

& Director

Michel BlouinIndependent/ IQ Designate

Yves Harvey Independent

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

Orin Baranowsky

Director, IR

Jean-Charles Dumont

Corporate Controller

Yves PerronVP Engineering & Construction

Ghislain Poirier

VP Public Affairs

Brian Glover VP Asset Protection

Martin BoucherVP Sustainable Development

Guy BourqueChief Mining

Engineer

Helene RobitailleDirector, HR

Robin Hopkins

VP ExplorationMario Courchesne

Construct. ManagerFreddie Mianscum

IBA Implem. Officer

5

MAJOR SHAREHOLDINGS*

12 MONTH ANALYST TARGETSMarket Capitalization: Update(based on voting and non-voting shares)

C$ 139 million

Total Shares Outstanding: (Basic and Non-voting convertible shares)

163 million

Total Options & Warrants Outstanding:(9m Options $0.40-$2.40; 25m warrants $1.20)

34 million

Consolidated Cash: (as of July 31, 2013)

C$ 25 million

Consolidated Debt: ($100m Standby Facility with IQ undrawn)

C$ 39 million

IQ**(common shares)(non-voting convertible shares)

25.0% 35.4%

Agnico-Eagle 10.5% 9.0%

Caisse de dépôt et placement du Québec

8.1% (est)

7.0% (est)

Float 56.4% 48.6%

Fully Diluted

Basic

BMO Ed SterckNovember 13th 2013

Market Perform na

Laurentian Eric LemieuxNovember 13th 2013

Buy $2.10

RBC Des Kilalea,November 13th 2013

Outperform-Speculative Risk $1.20

Desjardins John HughesOctober 21st 2013

Speculative Buy $1.70

Paradigm David DavidsonJune 26th 2013

Buy $2.00

National BankPaolo LostrittoDecember 11th 2012

Outperform-Speculative Risk $2.00

BALANCE SHEET*

Notes: Debt Facility: In December 2010, Stornoway announced a $100 million Credit Support Agreement with a subsidiary of Société générale de financement du Québec, now Investissment Québec, with respect to future project debt financing. The Credit Support Agreement has an annual commitment fee of 175 bps undrawn, and will take the form of a direct project loan ranking pari passu with concurrent senior lenders or, as appropriate, on a stand alone basis on terms no less favourable than prevailing commercially reasonable market terms.

*Based on market close of $0.85 on November 15th 2013 and not including the issue of flow through shares announced on November 13 th 2013.

**IQ: Investissement Québec, the Québec government's industrial and financial holding company whose mission is to foster the growth of investment in Québec, thereby contributing to economic development and job creation in every region

Stornoway’s Platform for Project Development and Financing

66

Towards Québec’s First Diamond Mine

7

Lynx

R10

N

R7

R1Hibou

R4

R9R2

R3

R65

R8

Kimberlite Bodies with Probable Reserves

Hibou

Lynx

R4

R9R2

R3

R65

Kimberlite Bodies with Resource Potential

R1Hibou

Lynx

Legend

Stornoway Properties

Hydro-Québec Facility

Renard Kimberlites

Kimberlitic Dyke

Regional Kimberlites

Hydro-Québec Powerlines

Route 167 Extension/ Renard Mine Road

Road

Exploration/ Mining Projects

LEGEND:

0 1 2

Kilometers

60 0 60 120

Kilometers

Renard

LG3LG2LG4

Laforge 1

Laforge 2

Brisay

Foxtrot Property

Strateco

Eastmain MineWestern Troy

Troilus Mine

Eleonore

Temiscamie

Mistissini

ChibougamauMatagami

Wemindji

Renard Kimberlite Bodies

Kimberlite Bodies with Inferred Resources

8

Key Project Parameters

27 mcarat Indicated Mineral Resource

17 mcarat Inferred Mineral Resource

26-48 mcarat Exploration Upside

Reserve Based Mine Plan(Feasibility Study Nov. 2011, Optimization Jan. 2013)

Mine Life 11 years

Mineral Reserve 17.9 mcarats

Initial Cap-ex $752m

Operating Cost $58/t ($76/carat)

Operating Margin 67%

Operating Cash Flow $2.7B

Average Diamond Price $180/carat

Average Diamond Production 1.6 mcarats/yr

After Tax NPV (7%; Jan 1 2013) $391m

After Tax IRR 16.3%

Production Startup December 2015

Long Term Plan (Basis of Mine Permitting)

Includes the mining of the 17mcarat Inferred Resources within the scope of the Feasibility Study mine infrastructure: Extended mine life, increased annual production, increased project valuation

*Key Assumptions: C$1=US$1, Oil US$95/barrel, 2.5% real terms diamond price growth Q311-Q425, 82.9% ore recovery, 23.8% mining and internal dilution, 0cpht dilution grade, January 1 2013 effective date for NPV and IRR calculation.

Notes: 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.

Renard 460/50cpht Renard 9

53cpht

Renard 6529/24cpht

Renard 2104/119cpht

Renard 3103/112cpht

0m

100m

200m

400m

600m

700m

500m

300m

9

What has Changed Since the January 2013 Optimization Study?

27 mcarat Indicated Mineral Resource

17 mcarat Inferred Mineral Resource

26-48 mcarat Exploration Upside


53cpht

Renard 6529/24cpht

Renard 2104/119cpht

Renard 3103/112cpht

0m

100m

200m

400m

600m

700m

500m

300m

14% Increase in Indicated Resources

An additional 2.3Mcarats at Renard 65 (7.87 Mtonnes at 29cpht) amenable to open pit mining to 150m depth (July 2013).

Updated Diamond Price Estimates

Revised estimates based on individual diamond price models: US$190/ct for Renard 2; US$180/ct for Renard 65 (March 2013).

Op-ex Reduced 7% with LNG Option

Incremental cap-ex increase of $2.6 million for annual op-ex reduction of $8 to $10m using LNG for power generation (October 2013).

New Québec Tax Regime Absorbed

New Québec system of mining taxation and royalties: graduated approach based on project profitability (May 2013).

Removal of uncertainty on tax environment for project development.

10

The Feasibility: 11 years of mining

Permitting and Long Term Business Plan

The Vision: Deposit still Open

40

60

80

100

120

140

Millions of Tonnes

20

0

Exploration Target High Range

Inferred Resource

Exploration Target Low Range

Probable Reserve

Notes: 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’s Resource UpsideA Project with a Long Resource Tail and Very Long Mine Life Potential

The resource upside at depth at Renard is world class.

Although highly accretive, the project’s Inferred Mineral Resources are not included in the Feasibility Study economic analysis in accordance with NI 43-101.

0m

100m

200m

400m

600m

700m

500m

300m


103/112cpht

Renard 2104/119cpht

Renard 953cpht

Renard 460/50cpht

11

Stornoway recently completed a successful 5,000 tonne bulk sample at Renard 65 in July 2012.

The Renard 65 bulk sample returned the highest value diamonds to date at the Renard Project. Diamond recovery of 963 carats with a March 2013 valuation of US$250/ct, giving a base model of US$180/ct (sensitivities of $203 & $169).

July 2013: Conversion of Inferred Mineral Resources to a depth of 150m to an Indicated Mineral Resource of 2.30 Mcarats (comprising 7.87 Mtonnes at 29cpht)

Upon conversion to a Mineral Reserve, this material may be incorporated into the mine plan in two ways:

1. add 1 year to the LOM and increase the production rate to 2.5Mt/a or

2. add 3 years to the LOM as a reserve tail at a production rate of 2.1Mt/a

The cost of developing a 75m deep pit at Renard 65 is already contained within the Feasibility Study.

Renard 2

Renard 3

Renard 9Renard 4

Renard 65

Three Renard 65 diamonds: 9.78 ct and 6.41 ct diamonds recovered from the 2012 bulk

sample and a 4 carat stone discovered in drillcore in 2003

Mineral Resource Continuing to GrowJuly 2013: 14% Increase in Indicated Mineral Resources

Notes: 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.

12

490 m asl

-275 m asl

0 m

790 m

Indicated Resource

Legend

Inferred Resource

Inferred Resource of R2 CRB

Low TFFE

High TFFE

Resource ExpansionTargets for Resource Expansion in 2013 and Beyond

Renard 2 Renard 3 Renard 4 Renard 65 Renard 9

1. Conversion of Renard 65 Inferred Resources to Indicated to 150m depth (July 2013: Completed)

2. Addition of Renard 2 Country Rock Breccia to both Indicated and Inferred Resources (July 2013: Completed)

3. 6.2 Mcarats in 5.23 Mtonnes (at 119 cpht) in Renard 2 Inferred Resources between 610m and 700m depth: 4.2 to 7.3 Mcarats TFFE between 700m and 770m depth. Open below 770m. (Target for 2014 Drilling)

12

3

13Mine PlanA Combined Open Pit and Underground Mine

Renard 4

Renard 2

Renard 3

Renard 65

View looking Northeast

Renard 2 Renard 3

Open Pit Mining (years 1-2).

Underground Mining (years 3-11).

Underground method: Blast Hole Shrinkage, Panel Retreat with waste backfill from pits.

Ramp access 610 meter level.

6,000 tpd plant capacity (2.2Mtonnes/year) expandable to 7,000 tpd (2.5Mtonnes/year).

Pit at Renard 65 (initially) as a borrow-pit and waste water sump, pending resource conversion.

14

Waste Rock

Processed Kimberlite Containment (PKC)

Overburden Stockpile

R2-R3

Ore Stockpile

R65

Camp

Plant

Road from Chibougamau

General Project ArrangementSmall Project Footprint of 3.1km2, Modest Environmental Impact

15Mine Plan Production Schedule and Cash Flow(Mineral Reserves Only)

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000 Open Pit & Underground Mining

R2 Pit R3 Pit R2 UG R3 UG R4 UG

Ore

To

nn

age

(t)

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000 Diamond Production

R2 R3 R4

Dia

mo

nd

s (c

arat

s)

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

-

100,000

200,000

300,000

400,000

500,000

600,000 Gross Revenue (Real Terms)

R2 R3 R4

Rev

enu

e (k

C$)

16Stornoway will be a Significant Diamond ProducerCurrent and Future Diamond Producers

Source: Kimberly process and Company Reports

1 De Beers (Anglo/Botswana) $6,074m

2 Alrosa (Russia) $4,497m

3 BHPB/Dominion Diamond (TSX: DDC) $894m

4 Rio Tinto (ASE: RIO) $741m

5 Petra (note 1; L: PDL) $403m

6 Stornoway (note 2; TSX: SWY) $306m

7 Mountain Province (note 3; TSX: MPV) $273m

8 Gem (L: GEMD) $202m

9 Lucara (note 4; TSX: LUC) $118m

10 Others $2,200m

Total $15,708m

DeBeers39%

Alrosa29% BHPB/

Domin-ion6%

RioT-into5%

Petra3%

SWY2%

MPV2%

GEM1%

LUC1%

Others14%

2012 World Diamond Production Data/ Forecast Future Production

Notes:

1. Petra 12 month results for period ending June 30, 2013

2. Renard estimated at FS average annual diamond production of 1.7 million carats, and WWW April 2011 weighted diamond price of $180/ct, un-escalated

3. Gahcho Kue estimated at 50% of FS average annual production of 4.5 million carats, and WWW April 2011 weighted diamond price of $121/ct, un-escalated

4. Karowe estimated as per Lucara FY2013 Operating Guidance.

17Renard’s DiamondsRecent Valuation Conducted by WWW International Diamond Consultants Ltd. March 2013

The Renard kimberlite pipes have similar, but marginally different diamond populations exhibiting coarse size distributions and with high proportions of large white gems.

99% by weight gem/near-gem quality. 1% industrial quality boart.

Value Upside in Large Gems• 17 stones recovered to date larger than 5 carats with average price of $3,100/ct. Model prices

assumes $1,920 to $2,240 per carat for 5-10ct stones. Potential c.15% revenue upside.• Diamonds larger than 10.8ct (“Specials”) estimated at three to six 50-100ct stones and one to two

+100ct stones every 100,000 carats (two weeks). Not accounted for in the revenue model

Kimberlite Body

Size ofValuation Sample(carats)

WWW March 2013 Sample

Price(US$/carat)1

WWW March 2013 Base Case Price

Model(US$/carat)1

Sensitivities(Minimum to High)

Renard 2 1,580 $180 $190 $171 to $214

Renard 3 2,753 $173 $151 $141 to $185

Renard 4 2,674 $100 $104 ($150)2 $98 to $168

Renard 65 997 $250 $180 $169 to $203

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

$150 per carat based on March 2013 pricing.

Renard 3 Bulk Sample Stones larger than 2 carats. “Run of

Mine”

18Permitting and Social AcceptabilityStrong Regulatory and Public Support for Québec’s First Diamond Mine

Social Licence

Permitting

March 2012: Impact and Benefits Agreement (“IBA” or the “Mecheshoo Agreement”) with the Cree Nation of Mistissini and the Grand Council of the Crees (EI).

July 2012: Partnership Agreements Signed with Chibougamau and Chapais.

May 2013: Settlement of future Québec mining tax regime

Oct. 2012: Québec Mining license issued.

Dec. 2012: Québec Certificate of Authorization issued.

July 2013: Positive Federal Environmental Assessment decision issued.

All Community Agreements and Regulatory Authorizations Required to Proceed to

Construction are in Place.

19Project ScheduleJanuary 2013 Optimization Study

BFS (Complete)

ESIA (Complete)

Community Hearings (Complete)

Reg. Authorizations (Complete)

Specific Operating Permits (50)

Detailed Engineering

Project Financing

Road Construction

Site Construction

Commissioning and Ramp-up

Commercial Production

2011

2H 2H 2H 2H2H 1H 1H 1H1H

2012 2013 2014 2015

2H1H

2016

First Vehicle Access

With first vehicle access achieved on the Renard Mine Road, the timely completion of mine project financing is the now principal driver on project schedule

20The Route 167 Extension and the Renard Mine Road A Canadian Diamond Project with Road Access Opened Ahead of Schedule

50 km

Renard Project

Explor./Mining Projects

Stornoway Properties

Albanel-Témiscamie-Otish Par

Segment A: 0-82kmSegment B: 82-143kmSegment C: 143-195kmSegment D: 195-240km

Legend

Renard

WesternTroy

EastmainAbitex

Strateco

Mistissini

Lac Mistassini

Lac Naococane

Lac Hecla

Lac Albanel

Km 0

Km82

Km240

Km195

Km143

Rou

te 1

67

Construction of an all-season access road connecting Renard to the Québec Highway network began in February 2012.

Segments A & B of this road (143 km) constructed by Québec as a 2-lane highway. Segments C & D (97 km) constructed by Stornoway as the single lane “Renard Mine Road”.

To complete this work, Québec provided Stornoway up to $85m of debt financing, repayable upon commercial production at Renard.

All 4 segments have been connected. The road is open to construction traffic 2 months ahead of schedule and approximately 10% below budget.

Segments C & DStornoway

97km of Mine Road (50km/hr)

Segments A & BMin. of Transport

143km of Regional Highway (70km/hr)

Eastmain Bridge, March 2013

Transportation of Pre-Fabricated Temporary Bridge

Spans March 2013

21

Stages of Road Construction

“Slashing” or Tree Clearing Preparation of Road Foundation

Bridges or Culverts on Stream Crossings

Construction of Permanent Bridges

Connection of the Renard Mine Road September 2013

Grading

22

Views of the Road

Renard Project

Explor./Mining ProjectsStornoway Properties

Albanel-Témiscamie-Otish Par

Segment A: 0-82kmSegment B: 82-143kmSegment C: 143-195kmSegment D: 195-240km

Legend

Renard

WesternTroy

EastmainAbitex

Strateco

Mistissini

Lac Mistassini

Lac Naococane

Lac Hecla

Lac Albanel

Km 0

Km82

Km240

Km195

Km143

Rou

te 1

67

KM 210 KM 237

KM 155

23

Renard Aerodrome

ApronRunway Taxi wayShoulder

Renard Project SiteThe Renard Aerodrome will be located 8 km south of the project site.

The airstrip will be certified by Transport Canada to receive Dash 8-300 turboprop and Hercules aircraft.

Design criteria (3C-NP):• Gravel surface• 30m wide by 1,494m long• Taxiway and 100mx100m apron• Equipped with assisted landing capability

Traffic will be 3 to 5 flights per week for 48 workers per flight.

The Renard Mine Aerodrome will be available for public use, enhancing air transport in the Monts Otish region of Québec.

On October 10th Stornoway announced an agreement with Québec to commence

construction of the Renard Mine Aerodrome immediately, utilizing the residual amount of financing available within the Renard Mine

Road credit facility.

24Aerodrome ProgressOctober 2013

Tree Cutting Area

RunwayCenterline

First Landing: November 5th

25Site ProgressOctober 2013

R65 Borrow Pit

Tree Clearing

Bulk Sample DMS Plant

Construction Camp

Renard Mine Road

R65

R2R9

R4

26Liquefied Natural Gas Power Plant Feasibility Study Released October 2013

With a view to project optimization, Stornoway has been investigating more cost efficient alternatives for on-site power supply than traditional diesel fuelled gen-sets.

A Hydro-Québec powerline has been ruled out in the short term due to high cap-ex cost.

On October 21st Stornoway announced it will proceed with an LNG fuelled gen-set option, made possible by the ability to receive regular cryogenic LNG shipments on 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.

27Liquefied 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.• Long term, stable supply market utilizing existing commercial distribution network within Quebec.• Elimination of on-site propane, as LNG will be used for building and underground mine heating.

Diesel will continue to be used for the mobile mining fleet and construction activities

Cost Improvements with LNGJan 2013

Optimization Study with Diesel

Jan 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 41.7

Annual Propane Consumption (thousand m3/annum) 3.5 n/a

Notes

1. January 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 January 2013 Optimization Study, with a normal operating load of 9.49MW, C$1=US$1, Oil US$95/barrel

28

Québec’s First Diamond Mine – Ready to Build

Project Green-lighted: Authorizations Issued

Community Agreements in Place

Stornoway Operating Team in Place

Access Road Opened 2 Months Ahead of Schedule and Under Budget

LNG Power Plant Results in Meaningful Cost Savings

Resource Continuing to Grow

Favourable Cost Environment for Project Construction

Project Debt Facility Well Advanced (Syndicate announced on September 6th 2012 for a senior facility of up to $475m BMO, Scotia, NedBank, SocGen, EDC, Caterpillar, IQ)

Stornoway is Focused on Completing Project Financing for Construction in 2014

and 2015, with first Production in 2016

2929

Appendix 1: NI 43-101 Mineral Reserves and Mineral Resources

30

Probable Mineral ReserveMining 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 ReservesUpdated January 28th 2013

31

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 ResourcesPublished July 23rd 2013. Changes to January 2011 Mineral Resource in Italics


Tonnes(millions)


Renard 2 – Total 100 (n/a) 18.58 (n/a 18.66 (n/a)

Renard 2 104 (+1.2%) 17.71 (-0.4%) 18.38 (+1.6%)

Renard 2 CRB-2a 32 (n/a) 0.87 (n/a) 0.28 (n/a)

Renard 3 103 (-2.2%) 1.76 (+0.5%) 1.82 (-1.7%)

Renard 4 60 (+13.1%) 7.25 -- 4.31 (+13.0%)

Renard 65 29 (n/a) 7.87 (na) 2.30 (n/a)

Total Indicated 76.4 (-14.3%) 35.45 (33.1%) 27.09 (+14.0%)

Renard 2 – Total 64 (n/a) 10.46 (n/a) 7.47 (n/a)

Renard 2 119 (+1.2%) 5.23 (+0.4%) 6.23 (+1.6%)

Renard 2 CRB 19 (n/a) 5.23 (n/a) 1.24 (n/a)

Renard 3 112 (-4.5%) 0.54 (+0.2%) 0.61 (-4.2%)

Renard 4 50 (+13.7%) 4.75 (-0.1%) 2.37 (+13.7%)

Renard 9 53 (+13.2%) 5.70 (+0.1%) 2.69 (+13.2%)

Renard 65 24 (-16.8%) 4.93 (-61.9%) 1.18 (-68.3%)

Lynx Dyke 107 -- 1.80 -- 1.92 --

Hibou Dyke 144 -- 0.18 -- 0.26 --

Total Inferred 58.2 (+3.7%) 28.36 (-8.9%) 16.50 (-5.4%)

32

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 ExplorationPublished July 23rd 2013. Changes to January 2011 Estimates in Italics


Tonnes(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%)

to74.9

(-0.8%)25.7

(+9.1%)to

47.8(-1.4%)

33Renard Resource UpsideInferred Resources and TFFE Not in Reserve Case Mine Plan

0m

100m

200m

400m

600m

700m

500m

300m

Inferred Resource

Exploration Target

Indicated Resource

0.8 to 2.8 mcarats

0.6 mcarats

6.2 mcarats

4.2 to 7.3 mcarats

1.2 mcarats

2.7 mcarats

7.3 to 13.5mcarats

5.6 to 11.8 mcarats

2.0 to 4.3 mcarats

Notes: 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.

Renard’s Inferred Resources and TFFE represent a potential increase over the current Indicated Resource of 156% to 237%.

Each kimberlite remains open at 770m depth

2.4 mcarats 1.2

mcarats

3434

Appendix 2: Feasibility Study and Feasibility Optimization

35

Chronology of Renard Studies

Feasibility Study

Released 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 Plan

Companion 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 gensets

36Optimization Study Financial Analysis Project Assumptions, Valuation and Pay-Back

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 $625

After 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 Dde-escalated nominal terms.

37Optimization Study Financial Analysis Capital Costs

Capital Costs1 (C$m)

Site Preparation & General $32.7

Mining $151.2

Mineral processing plant $175.4

Onsite utilities and infrastructures $114.8

Owner’s Cost $94.7

Spares, fills, tools $7.1

EPCM services $47.9

Field indirect costs, vendor representatives $33.9

Construction camp & Catering $24.5

Freight and duties $5.5

Contingency $64.7

Total Initial Capital $752.1

Escalation Allowance on Initial Capital $45.1

Pre-Production Revenue $(25.0)

Deferred & Sustaining Capital2 $175.9

Deferred Capital (Route 167 Extension) $0.0

Renard Mine Road2 $78.0

Salvage Value2 $(13.3)

Total LOM Capital $1,012.9

Site Prep. & General

7%Mining32%

Plant37% Onsite utilities

and infras-truc.24%

Direct Costs (C$474m)

Owner’s Cost34%

Spares3%

EPCM17%

Field, Vendor reps12%

Camp9%

Freight2%

Contin.23%

Indirect Costs (C$278m)

Notes1. Optimization Study, released January 28th 2013. 2. After Escalation

38Optimization Study Financial Analysis Operating Costs

Notes: 1. Optimization Study, released January 28th 2013. Costs are

expressed in October 2012 terms. Totals may not add due to rounding.

2. Unit cost per processed tonnes.

Open Pit Unit Costs1 $/tonne

Open Pit 21.22

Processing 15.29

G&A2 and Infrastructure 18.27

Total Open Pit3 54.78

Underground Unit Costs1 $/tonne

Underground 23.64

Processing 15.29

G&A2 and Infrastructure 18.27

Total Underground3 57.20

Life of Mine Operating Costs1,4 (Real Terms)

Total Operating Cost (C$M) 1,352

Diamond Prod. (Mcarats) 17.6

Production Cost357.63 C$/ t

76.63 C$/ ct

3. G&A unit costs do not include closure cost4. “Life of Mine Operating Costs” exclude diamond production prior to Commercial

Production and exclude pre-production operating costs, which are capitalized.

Open Pit, $10m, 1%

UG Mine, $555m, 41%

Plant,$359m, 26%

G&A, $429m, 32%

Operating Cost (C$1,352m)

39Optimization Study Financial AnalysisCarat Production and Revenue

Revenue Parameters1 (Real Terms)

Total Gross Revenue (C$m) $4,268

Marketing Costs (%) 2.7%

DIAQUEM Royalty (%) 2.0%

Cash Operating Margin (C$m) $2,693

% Operating Margin 67%

Taxes and Mining Duties and IBA Payments (C$m) $625

Cumulative After Tax Cash Flow (C$m) $1,084

Production Parameters1 (Mcarats)

Renard 2 Open Pit 1.24

Renard 3 Open Pit 0.67

Total Open Pit 1.91

Renard 2 Underground 13.62



Total Underground 16.03

Total 17.95

11%

89%

Diamond Production by Mining Method

Open PitUnderground

83%

8%9%

Diamond Production by Kimberlite Pipe

Renard 2Renard 3Renard 4Notes:

1. Optimization Study, released January 28th 2013.

40Optimization Study Financial AnalysisProject Valuation Sensitivities

80% 90% 100% 110% 120%

Operating Cost

0.196230817501467

0.179972091321546

0.163250266570968

0.146048134926164

0.128352213587736

Capital Cost

0.211848685510625

0.185686524308791

0.163250266570968

0.143515586162991

0.126422937843627

Revenue

0.0954733598295952

0.130922538916418

0.163250266570968

0.193237406873603

0.221132045336473

2.5%

7.5%

12.5%

17.5%

22.5%

27.5%After Tax IRR

80% 90% 100% 110% 120%

Operating Cost

0.242509245832617

0.223133018667018

0.203203454136104

0.182598617148955

0.161222312218575

Capital Cost

0.260321997028043

0.229478257678887

0.203203454136104

0.180038611510592

0.159688707251324

Revenue

0.120925606372013

0.164238448528949

0.203203454136104

0.23896505379885

0.272313998809559

2.5%

7.5%

12.5%

17.5%

22.5%

27.5%

80% 90% 100% 110% 120%

Operating Cost

526138.560097787

460173.864766308

391479.681320721

320039.469487909

245910.93197427

Capital Cost

506816.515672916

449805.653795551

391479.681320721

331667.85325678

272019.81394411

Revenue

99134.8611828234

246431.438184723

391479.681320721

535409.221431181

677695.47684244

50,000

150,000

250,000

350,000

450,000

550,000

650,000

80% 90% 100% 110% 120%

Operating Cost

891142.544040477

789142.294089817

683498.672419844

574143.39011149

461111.206256864

Capital Cost

845695.085738505

764629.149834535

683498.672419844

601268.751237633

519031.263288076

Revenue

231317.818191946

457407.565789829

683498.672419844

909511.097962548

1135601.64804841

100,000

300,000

500,000

700,000

900,000

1,100,000Pre-Tax IRR

After Tax NPV

Pre-Tax NPV

41Rough Diamond Price MovementsThe Diamond Market, January 2010 to September 2013

A tracking of the diamond market since the publication of the November 2011 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).

May 2011 Valuation utilized in the FS based

on the average of 5 diamantaires c.10%

below the WWW rough index price

4242

Appendix 3: Project Comparables

43Diamond Industry Cost Curve Source: Published FY2012 Results, FS Life of Reserve Data and Company Estimates

World Diamond Project ComparablesCost/Revenue

44Project ComparablesRecent Canadian Diamond Mines Compared as of the Date of each FS

Source: Company Reports and Stornoway Estimates. Excludes resource and diamond price upside from both projects. Excludes diamond price escalators. Assumes similar diamond recovery and mining dilution parameters.

Ekati (1998)BHPB, As Built

Estimates

Diavik (1999)Rio-Tinto, As

Built Estimates

Victor (2008)De Beers, As

Built Estimates

Renard FS Optimization Study (2013)

Resource ParametersResource (m carats) 161 133 No data 41

Resource (US$) $10B $6.7B No data $7.2BResource Grade (cpht) 110 360 No data 72Average Resource Diamond Price $60 $50 No data $175Resource Mine Life 25 25 No data n/a

Reserve ParametersReserve (carats) 72 102 6 17.9

Reserve (dollars) $6B $5.5B $2.4B (est) $3.2BReserve Grade (cpht) 109 400 20 75Average Reserve Diamond Price $84 $55 $400 $180 Average Reserve Ore Value (US$) $92 $220 $80 $136Reserve Mine Life 17 19 12 11

Production ParametersAnnual Production (mCarats) Up to 3.6 Up to 7 0.5 1.7Annual Revenue (US$m) $302 $385 $215 $306LOM Op-ex (Cdn$/tonne) $100 to $60 $100 No data $58LOM Op-ex (Cdn$/carat) $92 to $55 $25 No data $76Canadian-US Dollar c.$0.75 $0.67 c.$1.00 $1.00

Pre-Production Cap-ex (Cdn$) $900m $1.3B $982m $752m

45Project ComparablesRecent Canadian Diamond Development Projects Compared as of the Date of each FS

Gahcho Kué FS (2010) De Beers/Moun. Prov.

Star-Orion FS (2011) Shore Gold

Renard FS Optimization Study (2013)

Resource ParametersResource (m carats) 61 43 41Resource (US$) $5.1B $11B $7.2BResource Grade (cpht) 168 12 72

Average Resource Diamond Price $85 (WWW Apr 10)$65 (DTC Apr 10) $256 (WWW Feb 11) $175 (WWW May 11)

Resource Mine Life n/a n/a n/a

Reserve ParametersReserve (carats) 49 34 17.9Reserve (dollars) $3.7B $8.2B $3.2BReserve Grade (cpht) 157 12 75Average Reserve Diamond Price $75 $242 $180 Average Reserve Ore Value (US$) $118 $30 $136Reserve Mine Life 11 20 11

Production ParametersAnnual Production (mCarats) 4.5 1.7 1.7Annual Revenue (US$m) $338 $411 $306LOM Op-ex (Cdn$/tonne) $49 $14 $58LOM Op-ex (Cdn$/carat) $31 $114 $76Canadian-US Dollar 0.96 0.945 1.00

Pre-Production Cap-ex (Cdn$) $550m ($800m De Beers Dec 11) $1.9B $752m

Source: Company Reports. Excludes resource and diamond price upside from both projects. Excludes diamond price escalators. Assumes similar diamond recovery and mining dilution parameters.

4646

Appendix 4: The Diamond Market

47Major Diamond Mines and Development Projects WorldwideFew Enough Mines to Fit on One Map

South Africa • Venetia (De Beers)

• Finsch, Premier (Petra Diamonds)

• Lace (DiamondCorp)

Tanzania• Williamson (Petra Diamonds)

Russia • Arkhangelsk District (Alrosa)

• Yakutia District (Alrosa)

• Grib (LUKOIL)

India• Bundar (Rio Tinto)

Australia• Argyle (Rio Tinto)

• Ellendale (Gem Diamonds)

Canada• Ekati (BHPB)

• Diavik (Rio Tinto/Harry Winston)

• Victor, Snap Lake, Gahcho Kue (De Beers)

• Renard (Stornoway)

• Star (Shore Gold/Newmont)

Botswana• Jwaneng, Orapa (De Beers)

• Gope (Gem Diamonds)

• AK6 (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)

• Mothai (Lucara)

48The Rough Diamond Business in Context1/8th the Size of the Copper Business

Source: USGS, LME, Kimberly Process

49The Diamond PipelineAn Industry with Many Intermediaries

Source: Tacy D.I.B.April 2013

Production Cost

Production Value

Mine Sales to Industry

Rough Sales to Cutting Centers

Value of Polished Produced

Value of Diamonds in

Retail Jewelery

Sales

Retail Sales of Diamond

Jewelery

Estimated Average Margins

after Costs (%)

Polishing: -10 to 15%

Jewelery Manufac: -10

to 10%

Jewelery Retail: 20 to

50%

Mine Production Rough Trading and Diamond Polishing Diamond Jewelery

Value in US$B terms of each

stage of the diamond pipeline

Rough Mining: 0 to 50% Rough Dealing: 0 to 10%

$6.0B $13.37B $15.5B $15.2B $17.6B $21.9B

$72.1B

50

Future Rough Diamond Supply

0

20

40

60

80

100

120

140

160

180

Pro

duci

ton

/ Sup

ply

Mct

Production and Supply Forecast (Rio Tinto)

Alluvial

Open Cut

U/G

3x increase in U/G caratsHigher cost

De Beers Production Forecast Rio Tinto Production Forecast

Almost all rough diamond production forecasts show flat or declining production long term. De Beers see production peaking in 2017, and broad reserve depletion thereafter.

Rough production is not expected to reach 2008 levels in carat terms again.

No large scale diamond mine has been discovered since the discovery of EKATI and Diavik in the early 1990s. The movement to underground mining in Russia, South Africa and Canada will lower overall industry margins.

51

Diamond Jewelry Demand is Forecast to Grow Dramatically

Share of World Diamond Jewelry Market, 2005 to 2020

US49%

Japan14%

Europe10%

India (and Asia-Arabia)

13%

China (and Asia-Pacific)

10%

Others4%

2005: $62B

US42%

India (and Asia-Arabia)

18%


15%

2010: $74B

US27%

India (and Asia-Arabia)25%


32%

2020F: $128B

Source: AllanHochtreiter after De Beers, Tacy Ltd.,

1 CAGR estimates after Alrosa October 2011. Nominal Terms

Diamond Jewelry CAGR of 5.6%1

2010-2020

Rough Diamond CAGR of 10%1

2010-2020

5252Rough Diamond Supply and Demand ForecastsAn Example: Bain September 2013

Rough Diamond Demand

Supply and Demand

Rough Diamond Supply

Since 2012, Bain & Co in partnership with the Antwerp World Diamonds Center have published an annual review of the diamonds sector.

The September 2013 edition forecasts a rough diamond supply CAGR of 2% and a rough diamond demand CAGR of 5.1%.

53

2007 2008 2009 2010 2011 2012 20130

100

200

300

400

500

600

700

0

2

4

6

8

10

12

$109

00000

$121

00000000000000000

$117

000000000000000000

$182

0000000000000000

$190

Commodity Index Data

WWW R.I. Polished Prices Index Gold IMF CPIIMF IPI IMF CPI NonFuel IMF Coal(Aust) IMF MetalIMF Cu S&P TSX Comp Index

Ind

ex

Oc

tob

er

20

03

= 1

00

S&

P T

SX

Co

mp

os

ite

Ind

ex

We

ek

ly C

los

ing

S&

P T

SX

Co

mp

os

ite

Ind

ex

We

ek

ly C

los

ing

S&

P T

SX

Co

mp

os

ite

Ind

ex

We

ek

ly C

los

ing

S&

P T

SX

Co

mp

os

ite

Ind

ex

We

ek

ly C

los

ing

Rough Diamond Pricing Since 2003Rough and Polished Diamonds Against a Basket of Indicators, 2003- October 2013

Source: LME, IMF, Rough Diamond Price data after WWW International Diamond Consultants Limited Indexed to October 2003. CAGR in Nominal Terms. WWW R.I. to May 2013

8% CAGR in Rough Prices

2003-2012

55

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

[email protected]

Tel: +1 (416) 304-1026 x103

www.stornowaydiamonds.com

[email protected]

http://www.stornowaydiamonds.com/

http://www.youtube.com/user/cariad1217

http://www.facebook.com/pages/Stornoway-Diamond-Corporation/313277295359632

http://www.linkedin.com/company/2476947

https://plus.google.com/113017533155680623150

http://stornowaydiamonds.com/feed/

http://www.twitter.com/SWYDiamonds

http://www.flickr.com/photos/stornowaydiamonds/

http://stocktwits.com/swydiamonds