Technical Report on the Feasibility Study and Updated Mineral Reserve for the Star Orion South Diamond Project Fort à la Corne, Saskatchewan, Canada

Transcription

1 Technical Report on the Feasibility Study and Updated Mineral Reserve for the Star Orion South Diamond Project Fort à la Corne, Saskatchewan, Canada Latitude N; Longitude W Effective Date: July 14, 2011 Signing Date: August 25, 2011 NI F1 Technical Report Mr. George Read, P. Geo. Mr. Fred H. Brown, CPG PrSciNat Dr. Wayne Ewert, P.Geo Mr. Shawn Harvey, P. Geo. Mr. Al Hayden, P. Eng. Mr. David Orava P. Eng. Mr. Eugene Puritch, P.Eng Mr. Ethan Richardson, P. Eng. Mr. Hugh Rudolf, P. Eng. Mr. Harnam Trehin, P.Eng.

2 TABLE OF CONTENTS 1.0 SUMMARY... I KEY CONCLUSIONS... I PROJECT TIMELINE... III MINERAL RESERVE ESTIMATE... III PROCESS PLANT... III DIAMOND PRICES... III ROYALTIES... IV OVERBURDEN STRIPPING... IV MINING... IV DEWATERING... IV ENERGY... IV TRANSPORTATION... IV ENVIRONMENT... V TECHNICAL SUMMARY... V LOCATION, ACCESS AND INFRASTRUCTURE... V TENURE AND SURFACE RIGHTS... VI GENERAL GEOLOGY... VI KIMBERLITE GEOLOGY... VI GEOLOGICAL MODELS... VII SAMPLING AND SAMPLE PROCESSING... VII UNDERGROUND SAMPLING... VII LARGE DIAMETER DRILLING... VIII DIAMOND RECOVERY... VIII DIAMOND VALUATION... VIII MINE DESIGN BASIS... IX OPTIMIZATION... IX GEOTECHNICAL AND HYDROGEOLOGICAL CONSIDERATIONS... XI MINING OPERATION... XII PHASED PIT DEVELOPMENT... XIII MINE SCHEDULE AND PRODUCTION RATE... XIV PRODUCTION SCHEDULE... XIV MINERAL RESERVE ESTIMATE AS OF JULY 14, XV ORE PROCESSING PLANT... XVII PROJECT INFRASTRUCTURE... XVII ELECTRICAL POWER SUPPLY... XVII ADMINISTRATION AND MAINTENANCE FACILITIES... XVIII WATER BALANCE AND WATER MANAGEMENT... XVIII SOCIAL AND ENVIRONMENTAL... XVIII FINANCIAL EVALUATION... XIX SUMMARY... XIX CASH FLOW MODEL... XX ECONOMIC CRITERIA AND ASSUMPTIONS... XXIV BASIS OF GROSS REVENUE ESTIMATES... XXIV DIAMOND VALUATION... XXV PRICE ESCALATION... XXV

3 MARKETING COST... XXV TAXES AND ROYALTIES... XXV CONTINGENCY... XXVI SENSITIVITY ANALYSIS... XXVII INTRODUCTION... 1 SITE VISITS... 2 OWNERSHIP AND JOINT VENTURE... 3 ABBREVIATIONS AND SYMBOLS... 3 RELIANCE ON OTHER EXPERTS PROPERTY DESCRIPTION AND LOCATION SHORE AND FALC-JV EXPLORATION LICENSES SURFACE RIGHTS AND LEASES ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY PHYSIOGRAPHY AND CLIMATE LOCAL AND REGIONAL INFRASTRUCTURE STAR PROPERTY DESCRIPTION ORION SOUTH PROPERTY DESCRIPTION HISTORY GEOLOGICAL SETTING AND MINERLIZATION LOCAL GEOLOGY - FALC AREA STAR KIMBERLITE GEOLOGY AND MINERALIZATION CANTUAR KIMBERLITE PENSE KIMBERLITE EARLY JOLI FOU KIMBERLITE (EJF) MID JOLI FOU KIMBERLITE (MJF) LATE JOLI FOU KIMBERLITE (LJF) UPPER KIMBERLITIC SEDIMENTS ORION SOUTH KIMBERLITE GEOLOGY AND MINERALIZATION CANTUAR KIMBERLITE PENSE KIMBERLITE EARLY JOLI FOU KIMBERLITE (EJF) LATE JOLI FOU KIMBERLITE (LJF) VIKING KIMBERLITE UPPER KIMBERLITIC SEDIMENTS (UKS) GEOLOGICAL MODEL STAR GEOLOGICAL MODEL ORION SOUTH GEOLOGICAL MODEL DESPOSIT TYPES KIMBERLITE HOSTED DIAMOND DEPOSITS FORT À LA CORNE KIMBERLITE MODEL EXPLORATION... 45

4 STAR KIMBERLITE EXPLORATION ORION SOUTH EXPLORATION EXPLORATION DRILLING STAR KIMBERLITE DRILLING ORION SOUTH DRILLIING SAMPLE PREPARATION, ANALYSIS AND SECURITY DIAMOND DRILLING LOGGING AND SAMPLING PROCEDURES UNDERGROUND SAMPLING PROCEDURES AND SAMPLE SECURITY SHAFT AND LATERAL DRIFT SAMPLING UNDERGROUND BULK SAMPLING PROTOCOLS LDD (RC DRILLING) SAMPLE RECOVERY LDD DOWNHOLE CALIPER MEASUREMENTS SAMPLE PREPARATION, ANALYSES AND SECURITY INTRODUCTION - MINERAL PROCESSING AND DIAMOND RECOVERY PROCESS PLANT CRUSHING AND SCRUBBING CIRCUIT PROCESS PLANT DMS CIRCUIT DIAMOND RECOVERY PLANT SAMPLE HANDLING AND PROCESSING PROCEDURES X-RAY DIAMOND SORTER GREASE TABLE DIAMOND RECOVERY CHAIN OF CUSTODY AND SECURITY PROTOCOLS DIAMOND PICKING AND SORTING PROCEDURES DATA VERIFICATION INTRODUCTION QA/QC AUDITS DATA BASE VERIFICATION BULK DENSITY VALIDATION MINERAL PROCESSING AND METALLURGICAL TESTING STAR UNDERGROUND BULK SAMPLING PROGRAM ORION SOUTH UNDERGROUND BULK SAMPLING PROGRAM LDD SAMPLING PROGRAMS STAR LDD PROGRAM ORION SOUTH LDD PROGRAM MINERAL RESOURCE ESTIMATES STAR GRADE MODEL ORION SOUTH GRADE MODEL DIAMOND VALUATION MINERAL RESERVE ESTIMATES... 77

5 INFERRED RESOURCES MINING METHODS SUMMARY MINE PRE-PRODUCTION DEVELOPMENT IN-PIT CRUSH CONVEY WASTE STRIPPING SYSTEM TRAFFICABILITY ORE PRODUCTION HYDROGEOLOGY AND PIT DEWATERING GEOTECHNICAL AND PIT SLOPES PIT SLOPES IN THE OVERBURDEN SOILS PIT SLOPES IN THE SUB-OVERBURDEN ROCK PIT DESIGN STAR PIT DESIGN ORION SOUTH PIT DESIGN PIT OPTIMIZATION STAR DEPOSIT PIT OPTIMIZATION ORION SOUTH DEPOSIT PIT OPTIMIZATION PRODUCTION SCHEDULE MINING EQUIPMENT MAINTENANCE OPERATIONS AND MAINTENANCE PERSONNEL REQUIREMENTS MINE INFRASTRUCTURE MINE ELECTRICAL POWER EXPLORATION POTENTIAL RECOVERY METHODS INTRODUCTION BASIS OF DESIGN METALLURGICAL TESTING AND ORE DRESSING STUDIES FOR STAR KIMBERLITE METALLURGICAL TESTING AND ORE DRESSING STUDIES FOR ORION SOUTH KIMBERLITE PROCESS DESIGN CRITERIA DESIGN PRINCIPLES DIAMOND DAMAGE BOTTOM CUT-OFF SIZE TOP CUT-OFF SIZE COMMINUTION AND DIAMOND LIBERATION RECRUSH ELIMINATED PRIMARY CRUSHING THICKENING PROCESSED KIMBERLITE CONTAINMENT FACILITY (PKCF) SOLIDS SURGE CAPACITY MASS BALANCE

6 PROCESS PLANT BUILDINGS PROCESS PLANT PRE-COMMISSIONING, COMMISSIONING AND RAMP-UP PROCESS DESCRIPTION RUN OF MINE (ROM) STOCKPILE COMMINUTION SECTION DMS SECTION THE RECOVERY SECTION THE -1 MM TAILINGS DMS REJECTS RECOVERY REJECTS CONTROL AND INSTRUMENTATION PLANT LABOUR REQUIREMENTS OPERATIONAL LABOUR REQUIREMENTS MAINTENANCE LABOUR REQUIREMENTS BULK SAMPLE (AUDIT) PLANT PROCESS / RECOVERY PLANT SECURITY INFRASTRUCTURE SUMMARY SITE PREPARATION ORGANIC COVER REMOVAL AND STOCKPILING SITE ACCESS AND UTILITIES ROADWAYS SITE GRADING PIT PRE-STRIPPING SITE ROAD, UTILITIES, PIPELINES & CONVEYANCE WAYS PERIMETER BOUNDARY SITE PLAN DESCRIPTION GENERAL SITE PLAN PLANT SITE LOCATION ACCESS ROAD ROUTE SELECTION ACCESS ROAD DESIGN ACCESS CORRIDOR RAILWAY SPUR POWER SUPPLY AND DISTRIBUTION POWER SUPPLY OPTIONS POWER SUPPLY REQUIREMENTS SITE ELECTRICAL DISTRIBUTION NATURAL GAS AND GEOTHERMAL ENERGY SUPPLY FUEL SUPPLY AND DISTRIBUTION EXPLOSIVES SUPPLY AND DISTRIBUTION TELECOMMUNICATIONS EARTHWORKS

7 18.13 PROCESS WATER SUPPLY POTABLE WATER WASTE POTABLE WATER AND SEWAGE COMBUSTIBLE SOLID DOMESTIC WASTE MANAGEMENT FACILITIES AND RECYCLING CONSTRUCTION PHASE OPERATIONS PHASE HAZARDOUS WASTE INFORMATION TECHNOLOGY MARKET STUDIES AND CONTRACTS SALES AND MARKETING CONTRACTS ENVIRONMENTAL STUDIES, PERMITTING AND SOCIAL OR COMMUNITY IMPACT PROJECT SCOPE EXISTING ENVIRONMENT SUBMISSION OF THE DRAFT EIS, REVIEW PROCESS UNDERWAY PERMITTING COMMUNITY ENGAGEMENT POTENTIAL FOR MATERIAL ISSUES CAPITAL AND OPERATING COSTS CAPITAL COSTS SUMMARY BASIS OF ESTIMATE LABOUR WAGE RATES LABOUR EFFICIENCY FACTORS PROCESSING (MAIN PROCESS PLANT AND BULK SAMPLE PLANT) TAGGED PROCESS, MECHANICAL AND ELECTRICAL EQUIPMENT QUANTITIES AND COSTS TAGGED EQUIPMENT INSTALLATION HOURS BULK MATERIAL QUANTITIES, INSTALLATION HOURS AND COSTS INFRASTRUCTURE TAGGED MECHANICAL AND ELECTRICAL EQUIPMENT QUANTITIES AND COSTS TAGGED EQUIPMENT INSTALLATION HOURS BULK MATERIAL QUANTITIES, INSTALLATION HOURS AND COSTS MINING MINE CAPITAL COST SUMMARY MINE EQUIPMENT COSTS MINING PRE-PRODUCTION DEVELOPMENT COSTS MINE SUSTAINING CAPITAL

8 PROCESS PLANT CAPITAL PROCESS EQUIPMENT INFRASTRUCTURE CAPITAL AUXILIARY EQUIPMENT CAPITAL INDIRECTS PROJECT CONTINGENCY OPERATING COSTS BASIS OF ESTIMATE PERSONNEL COSTS MINE OPERATING COSTS SAND AND CLAY PRE-STRIPPING IPCC WASTE STRIPPING ORE AND WASTE ROCK MINING MINE INDIRECT COSTS MINE POWER COSTS PROCESS PLANT OPERATIONAL COSTS SITE SERVICES WATER TREATMENT SOFTWARE REQUIREMENTS PERSONNEL SALARIES (OPERATIONAL) PERSONNEL SALARIES (MAINTENANCE) PROCESS PLANT POWER CONSUMPTION PROCESSING CONSUMABLES AND WEAR REPLACEMENTS PROCESSED KIMBERLITE CONTAINMENT FACILITY (PKCF) OPERATIONAL REQUIREMENTS COARSE REJECT STOCKPILES OPERATIONAL REQUIREMENTS RECOVERY REJECTS STOCKPILES OPERATIONAL REQUIREMENTS LIGHT VEHICLE REQUIREMENTS LABORATORY REQUIREMENTS SUMMARY GENERAL AND ADMINISTRATION FIXED G&A COMPONENTS LABOUR SITE SERVICES MOBILE EQUIPMENT HEALTH & SAFETY EMPLOYEE / PUBLIC RELATIONS CONSUMABLES JANITORIAL LIGHT VEHICLES BULK SAMPLE PLANT OPERATION SOFTWARE RECLAMATION CREDIT FACILITY ENVIRONMENTAL SUPPLIES AND COMPLIANCE LICENSES AND FEES COMMUNICATIONS LEGAL SERVICES WASTE MANAGEMENT VARIABLE G&A COSTS

9 SURFACE LEASES MUNICIPAL TAXATION INSURANCE OFFSITE SORTHOUSE AND SITE INTERPRETIVE CENTRE OPERATIONAL COSTS SORTHOUSE CONSUMABLES AND WEAR REPLACEMENTS ELECTRONIC MAINTENANCE AND SOFTWARE REQUIREMENTS MANPOWER SALARIES BUILDING COSTS AND MUNICIPAL FEES TRANSPORTATION COSTS AND COMMISSIONS THE INTERPRETIVE CENTRE SUMMARY SALES AND MARKETING ECONOMIC ANALYSIS SUMMARY CASH FLOW MODEL ECONOMIC CRITERIA AND ASSUMPTIONS PROJECT SCOPE % BASIS MINERAL RESERVE PLANT THROUGHPUT EIS, PERMITTING, AND FS COSTS BASIS OF GROSS REVENUE ESTIMATES DIAMOND VALUATION CURRENCY EXCHANGE RATE PRICE ESCALATION CAPITAL COST OPERATING COSTS MARKETING COST INDIRECT COSTS EPCM COSTS INDIRECT COSTS DURING THE PRE-PRODUCTION PHASE G&A COSTS PIT DEWATERING AND CRANE COSTS WORKING CAPITAL MINE CLOSURE COST SALVAGE VALUE TAXES AND ROYALTIES CONTINGENCY SENSITIVITY ANALYSIS ADJACENT PROPERTIES OTHER RELEVANT DATA AND INFORMATION FEASIBILITY STUDY ENVIRONMENTAL IMPACT STATEMENT

10 UPDATED DIAMOND VALUATION INTERPRETATION AND CONCLUSIONS PREVIOUS RECOMMENDATIONS MINERAL RESERVES PROCESS PLANT DIAMOND PRICES ROYALTIES OVERBURDEN STRIPPING MINING DEWATERING ENERGY TRANSPORTATION ENVIRONMENT RECOMMENDATIONS MINING GEOTECHNICAL PROCESS KIMBERLITE MANAGEMENT WATER MANAGEMENT PROCESSING INFRASTRUCTURE COSTS REFERENCES CERTIFICATES APPENDICES A.0 A.1 A.2 A.3 A.4 A.5 A.6 PROCESSED KIMBERLITE AND PROCESSED WATER MANAGEMENT INTRODUCTION MINE PLAN PROCESSED KIMBERLITE PRODUCTION KIMBERLITE GEOCHEMISTRY A.4.1 ACID ROCK GENERATION POTENTIAL A.4.2 METAL LEACHING A.4.3 ML/ARD CONSIDERATIONS SITE GEOTECHNICAL CHARACTERIZATION COARSE PK MANAGEMENT A.6.1 COARSE PK MANAGEMENT CONSIDERATIONS A.6.2 COARSE PK DESIGN CRITERIA A.6.3 COARSE PK FACILITY

11 A.7 A.8 B.0 B.1 B.2 B.3 B.4 B.5 B.6 B.7 B.8 C.0 C.1 A.6.4 A.6.5 WATER MANAGEMENT FOR COARSE PK FACILITY COARSE PK RECLAMATION AND CLOSURE FINE PK MANAGEMENT A.7.1 FINE PK MANAGEMENT CONSIDERATIONS A.7.2 FINE PK FACILITY DESIGN CRITERIA A.7.3 FINE PK CONTAINMENT FACILITY A.7.4 WATER MANAGEMENT FOR FINE PK FACILITY RECOVERY TAILINGS STOCKPILES WATER MANAGEMENT INTRODUCTION REGIONAL GEOLOGY B.2.1 BEDROCK GEOLOGY B SOURIS RIVER FORMATION B MANNVILLE GROUP B COLORADO GROUP B.2.2 OVERBURDEN GEOLOGY B EMPRESS GROUP B SUTHERLAND GROUP B SASKATOON GROUP HYDROLOGY AND HYDROGEOLOGY B.3.2 HYDROGEOLOGY B SHALLOW GROUNDWATER SYSTEM B CONFINING LAYER B DEEP GROUNDWATER SYSTEM WATER QUALITY B.4.1 SURFACE WATER QUALITY B.4.2 GROUNDWATER QUALITY B SHALLOW GROUNDWATER SYSTEM (SURFICIAL SAND AND SILT) B CONFINING LAYER B DEEP GROUNDWATER SYSTEM LOCAL CLIMATIC CONDITIONS WATER MANAGEMENT INFRASTRUCTURE B.6.1 WATER MANAGEMENT ADDITIONAL WATER MANAGEMENT REQUIREMENTS B.7.1 SURFACE WATER RUNOFF MANAGEMENT B.7.2 POTABLE WATER SUPPLY B.7.3 SEWAGE HANDLING AND DISPOSAL SITE WATER BALANCE B.8.1 GROUNDWATER (DEWATERING WELLS) WATER BALANCE B.8.2 IN-PIT WATER BALANCE B.8.3 PROCESSED KIMBERLITE CONTAINMENT FACILITY (PKCF) WATER BALANCE ANCILLARY BUILDINGS AND FACILITIES SUMMARY

12 C.2 C.3 C.4 C.5 C.6 C.7 C.8 C.9 C.10 C.11 C.12 C.13 D.0 D.1 D.2 D.3 D.4 D.5 D.6 D.7 D.8 E.0 E.1 E.2 E.3 ANCILLARY BUILDING SITE LAYOUT ADMINISTRATION AND SECURITY BUILDING INTERPRETIVE CENTRE MAINTENANCE / DRY AND TECHNICAL SERVICES BUILDING WAREHOUSE AND COLD STORAGE BUILDING BULK FUEL AND LUBRICANT SYSTEMS VEHICLE WASH FACILITY, WARM-UP SHED AND FIRE AND EMERGENCY RESPONSE BUILDING MINE YARD LAYOUT SECURITY FIRE PROTECTION SYSTEMS BULK SAMPLE PLANT (BSP) AUXILIARY FACILITIES OUTSIDE OF THE PLANT SITE C.13.1 SORTING FACILITY C.13.2 STAGING AREA WORKFORCE, HEALTH, SAFETY AND SECURITY SUMMARY MANAGEMENT ORGANIZATION WORKFORCE TRANSPORTATION AND SHIFT SCHEDULES RECRUITMENT, TRAINING AND DEVELOPMENT EMPLOYEE RELATIONS WORKFORCE SUMMARIES BY AREA OCCUPATIONAL HEALTH, SAFETY AND WELLNESS SECURITY CONSTRUCTION AND DEVELOPMENT PROJECT ORGANIZATIONAL STRUCTURE E.1.1 PROCESSING E.1.2 ACCOUNTING E.1.3 PROCUREMENT E.1.4 HUMAN RESOURCES E.1.5 HEALTH, SAFETY AND WELLNESS E.1.6 ENVIRONMENT E.1.7 CONSTRUCTION E.1.8 ENGINEERING E.1.9 SECURITY E.1.10 MINING E.1.11 MAINTENANCE E.1.12 TECHNICAL SERVICES PROJECT PLANNING AND MOBILIZATION ENGINEERING

13 E.4 E.5 E.6 E.7 E.8 PROCUREMENT CONTRACTING PLAN CONSTRUCTION COMMISSIONING AND START-UP PROJECT IMPLEMENTATION SCHEDULE

14 LIST OF FIGURES Figure ES.1: Sensitivity Analysis (Pre-Tax and Royalty Basis, NPV (7 %))... xxviii Figure 4.1: Location Map of the Star-Orion South Diamond Project Figure 4.2: Shore and FalC-JV Mineral Disposition Map Figure 7.1: Regional Geology of the FalC Area with the Magnetic Outlines of the FalC Kimberlites Figure 7.2: Cretaceous Stratigraphic Column of the Star Orion South Area Figure 7.3: Cross-Section across the Western Portion of the Star Kimberlite (view towards the west) Figure 7.4: Photographs of Underground Hand Samples and Core from the Star Kimberlite Figure 7.5: a). Topographic Elevation Map (lows are Blue; Highs are Magenta) of the Top Contact of the Olivine-Rich EJF. b) Three Dimensional View Looking Towards the North Figure 7.6: Isopach Map of the EJF Kimberlite Intersections (Contour Interval: 5 m) Figure 7.7: Orion South Kimberlite West To East Cross-Section Along UTM Line N 35 Figure 7.8: Example of Typical Matrix-Rich Pense Kimberlite with a More Altered (Lighter) Domain and a Less Altered (Darker) Domain (from C: m) (from Harvey, 2011) Figure 7.9: Pense Kimberlite Isopach Map (Contour Interval: 10 m) Figure 7.10: EJF Kimberlite Isopach Map (Contour Interval: 10 m) Figure 7.11: Example of a Normally Graded EJF Bed with a Coarser Xenolith-Rich Base Fining-Up to a Very Fine-Grained Xenolith-Poor Top (from C: from to m) (from Harvey, 2011) Figure 7.12: Example of Pense Autoliths in the lower EJF Figure 7.13: Variably Sized EJF Autoliths within Viking Kimberlite from Hole C at a Depth of m Figure 7.14: Star Kimberlite 3-D Geological Model Figure 7.15: 3D Northwest View of the Orion South Kimberlite Geological Model Figure 10.1: Surface Drill Hole Locations for the Star Kimberlite Figure 10.2: Drilling Map for the Orion South Kimberlite Deposit Including Core, Mud Rotary and Large-Diameter Drilling Figure 11.1: Example of an Underground Wall Map Showing the Contact Between the bedded EJF (shades of green) Kimberlite and the More Massive MJF Kmberlite (peach) Figure 11.2: Process Plant Flowsheet Primary Kimberlite Processing Figure 11.3: Recovery Plant Flowsheet Figure 13.1: Star Kimberlite Underground Batch and Geology Map Figure 13.2: Geological Map of the Underground Drifts on Orion South Figure 16.1: Plan View of Star Open Pit Phases 1a, 1b, 2, 3 and Figure 16.2: Plan View of Orion South Open Pit Phases 1a, 1b and Figure 16.3: Typical Pit Slope Configuration Figure 16.4: Star Pit Cross Section 514,600E Showing Surficial Sand and Clay Layers Figure 16.5: Ultimate Pit Design Star Pit Phases 1a, 1b, 2, 3 & Figure 16.6: Star Open Pit Phases Cross Section 514,600E Figure 16.7: Orion South Pit Cross Section N Showing Surficial Sand and Clay Layers Figure 16.8: Orion South Ultimate Pit Design Pit Phases 1 and Figure 16.9: Orion South Open Pit Phases Cross Section N Figure 17.1: Process Plant and Stockpile Figure 17.2: The Mechanical Configuration of the Process Plant Figure 17.3: Example EJF Kimberlite (PK) from the Star Diamond Deposit

15 Figure 17.4: Example of EJF Kimberlite (KB) from the Orion South Diamond Deposit Figure 17.5: The Flowsheet for the Recovery Section Figure 17.6: Block Flowsheet of the Process Plant Figure 17.7: The Three Methods Used to Recover Diamonds in the Recovery Section Figure 17.8: Operational Labour Requirements Org Chart Figure 17.9: Plant Maintenance Personnel Org Chart (Note: D = Day Shift; R = Rotational Shift) Figure 18.1: General Site Plan (1 km grid) Figure 18.2: Star Diamond Project Access Road Options Figure 18.3: Power Transmission Line and Natural Gas Pipeline Options Figure 21.1: Site Layout with Electrical Distribution Network Figure 21.2: Operational Personnel Figure 21.3: Maintenance Personnel Figure 21.4: A Schematic of the Stockpile and the Process Plant with the Walls Removed Figure 21.5: A Photograph of a typical Glove Box for Sorting Diamonds Fitted with Gloves and the Secure Matlock Canister Above Figure 21.6: Sorthouse Personnel Figure 22.1: Sensitivity Analysis (Pre-Tax and Royalty Basis, NPV (7 %)) Figure A.1: General Site Plan (1 km grid) with Coarse PK Pile and PKCF Figure A.2: Proposed Layout of the Process Plant, Stockpile and Recovery Tailings Stockpile Figure B.1: Schematic Stratigraphic Column for the Fort à la Corne Area Figure B.2: Project Area Watercourses (from Shore and AMEC, 2010) Figure B.3: Groundwater Testing and Monitoring Network Figure B.4: Project Area Wind Rose Figure B.5: Wind Class Frequency Distribution Figure B.6: Site Water Management Schematic Figure B.7: Seepage Rate into Star Pit vs. Pit Lake Elevation Figure B.8: PKCF Pond Water Volume vs. Surface Area Relationship Figure C.1: General Plant Site Layout (1 km grid) Figure E.1: Construction and Development Organization Chart Figure E.2: Feasibility Summary Schedule

16 LIST OF TABLES Table ES.1: Pre-Tax and Royalty Results of the Cash Flow Analysis... ii Table ES.2: After-Tax and Royalty Results of the Cash Flow Analysis... ii Table ES.3: Star Orion South Diamond Project Mineral Reserve as of July 14, iii Table ES.4: The Parcel and Model Price Details for the Star and Orion South Kimberlites (February, 2011 pricebook)... ix Table ES.5: Weighted Average Model and High Diamond Prices for the Star and Orion South Kimberlites... ix Table ES.6: Summary of Star pit optimization inputs... x Table ES.7: Summary of Orion South pit optimization inputs... xi Table ES.8: Star Open Pit Development Phases... xiii Table ES.9: Orion South Open Pit Development Phases... xiii Table ES.10: LOM Open Pit Production Schedule... xv Table ES.11: Mineral Reserve Estimate Kimberlite Unit Detail for Star Orion South Diamond Project, effective July 14, xvi Table ES.12: Inferred Mineral Resource Estimate for the Star Orion South Kimberlite Units, effective July 14, xvii Table ES.13: Pre-Tax and Royalty Results of the Cash Flow Analysis... xx Table ES.14: After-Tax and Royalty Results of the Cash Flow Analysis... xx Table ES.15: Base Case Cash Flow (Model Price + 15 %)... xxii Table ES.16: Case 1 (High Model Price)... xxiii Table ES.17: Economic Criteria Utilized in the Cash Flow Models... xxiv Table ES.18: Summary of Contingency included in Base Case and Case 1 pre-production capital (years )... xxvii Table ES.19: Summary of Contingency included in Base Case and Case 1 during production (years )... xxvii Table ES.20: Sensitivity Analysis Results (Pre-Tax and Royalty Basis, NPV (7 %))... xxvii Table 4.1: Tenure Summary of Shore 100 % Held Property, Effective July 7, Table 4.2: Tenure Summary of the FalC-JV Property, Effective July 7, Table 4.3: Summary of Surface Leases Granted to Shore and the FalC-JV Table 7.1: Average Depth (and Elevation) to Major Stratigraphic Units Table 7.2: Average Thickness of Major Stratigraphic Units Table 9.1: Summary of Exploration Activities on the Star Kimberlite Deposit, Table 9.2: Summary of Exploration Activities on the Orion South Kimberlite Deposit, Table 10.1: Summary of Surface and Underground Drilling on the Star Kimberlite Deposit Table 10.2: Summary of Drilling on the Orion South Kimberlite Deposit, Table 13.1: Summary of Combined Production and Sample Results (Underground, RE, Geotech and Clean-Up) for Star Kimberlite (including Star West) Table 13.2: Summary of Underground ROM Diamond Grades from the Various Star Kimberlite Units Table 13.3: Underground Bulk Sampling Results on a Per Kimberlite Unit Basis FalC-JV Orion South Kimberlite Table 13.4: Summary of Star Kimberlite LDD Processing and Total Carat Recovery on a Per Kimberlite Unit Basis Table 13.5: Diamond Results from Orion South LDD Mini-bulk Samples on a Per Unit Basis. 73 Table 14.1: The Parcel and Model Price Details for the Star and Orion South Kimberlites (February, 2011 pricebook)... 76

17 Table 14.2: Weighted Average Model and High Diamond Prices for the Star and Orion South Kimberlites Table 15.1: Probable Mineral Reserve Estimate Kimberlite Unit Detail for Star Orion South Diamond Project, effective July 14, Table 15.2: In Pit Inferred Mineral Resource Estimate for the Star Orion South Kimberlite Units, effective July 14, Table 16.1: Star Open Pit Development Phases Table 16.2: Orion South Open Pit Development Phases Table 16.3: Projected Tonnages of Material to be Stripped by The IPCC System in Each Pit Phase Table 16.4: Projected tonnages of material to be stripped by the IPCC system per year Table 16.5: Estimated Average Trafficability of Star and Orion South Overburden Table 16.6: Trafficability summary for sub-overburden domains Table 16.7: Ground pressure assessment Table 16.8: Shear Strength Parameters Used in Star and Orion South Stability Analyses Table 16.9: Star Pit Wall Zonation and Pit Wall Slope Angles Table 16.10: Orion South Pit Wall Zonation and Pit Wall Slope Angles Table 16.11: Material and Hydrogeological Properties per Geotechnical Domain Table 16.12: Slope Configuration per Geotechnical Domain Table 16.13: Summary of Star pit optimization inputs Table 16.14: Summary of Orion South pit optimization inputs Table 16.15: LOM Open Pit Production Schedule Table 16.16: Projected Electrical Loads Table 17.1: Star Axb Breakage Index Classification Table 17.2: Star Ta Abrasion Index Classification Table 17.3: Star Diamond Breakage Results Table 17.4: Summary of the Metallurgical Test Work Conducted on the Star Kimberlite Table 17.5: Orion South Axb Breakage Index Classification Table 17.6: Orion South Ta Abrasion Index Classification Table 17.7: Summary of the Test Work Conducted on the Orion South Kimberlite Table 17.8: Predicted Longest Occurrence of a 45 mm Diamond for each of the Three Main Kimberlite Lithologies for the Star Kimberlite Table 17.9: Predicted Occurrence of Large Diamonds and their Associated Period of Occurrence for the Orion South Kimberlite Table 17.10: Mass Balance Summary 45,000 tpd Operation (45 mm Top Size and 1 mm Bottom Size) Table 17.11: Water Balance Summary 45,000 tpd Operation (45 mm Top Size and 1 mm Bottom Size) Table 17.12: Mass Balance Summary for the Recovery Section (30 t/h Operation) Table 17.13: The Various Sections of the Process Plant and their Corresponding Dimensions 130 Table 17.14: Process Plant Building Size Comparison Table 17.15: Summary of Plant Operating Personnel Table 17.16: Summary of Plant Maintenance Personnel Table 18.1: Estimated Demand and Load Profile for the Project Site Table 21.1: Pre-Production Capital Cost Summary Table 21.2: Life of Mine Capital Costs Including Contingency Table 21.3: Mine Capital Cost Summary Table 21.4: Mine Capital Equipment Cost Table 21.5: Timing of Mining Equipment Capital Expenditures Table 21.6: Pre-Production Development Costs Summary (X $1,000) Table 21.7: Timing of Mine Sustaining Capital Expenditures over the LOM

18 Table 21.8: Mine Sustaining Capital (with contingency) Costs (x1,000) through LOM Table 21.9: Summary of Process Plant and BSP Capital Costs Table 21.10: Summary of Infrastructure Capital Costs Table 21.11: Summary of Indirect Capital Costs Table 21.12: Key Parameters Used in Developing the Operating Costs Table 21.13: Life of Mine Material Production Direct Costs Table 21.14: Life of Mine Indirect Costs Table 21.15: Life of Mine Total Costs Table 21.16: Sand and Clay Pre-strip Equipment and Labour Requirements in Year Table 21.17: IPCC Operating Costs in Year 2020 (Production year 4) Table 21.18: Ore Mining Operating Cost in Year Table 21.19: Waste Rock Mining Cost in Year Table 21.20: Mine indirect operating costs for year Table 21.21: Annual Mine Power Costs Table 21.22: Pump Operational Costs Table 21.23: Water Purification and Treatment Costs Table 21.24: Processing Software Costs Table 21.25: Operations Personnel Summary Information and Costs Table 21.26: Maintenance Personnel Summary Information and Costs Table 21.27: The Expected Annual Power Consumption of the Equipment Categories in the Process Plant Table 21.28: Estimated Annual Consumption of FeSi and the Associated Costs Table 21.29: Estimated Annual Cost of Grease Table 21.30: Estimated Annual Cost for Ortanol Table 21.31: The Number of PMTs Required for the Recovery Section Table 21.32: Annual cost of PTMs Table 21.33: Annual Costs of X-ray tubes Table 21.34: Annual Costs of Lasers Table 21.35: Annual Costs of Screen Media Table 21.36: Annual Operating Cost of Conveyers & Flexowell Table 21.37: Tracer Consumption and Costs Table 21.38: Annual Operating Costs for the Pumps Associated with Maintaining the PKCF 211 Table 21.39: Annual Costs for general Maintenance on the PKCF Table 21.40: Annual Costs Associated with Maintaining the Coarse Reject Stockpiles Table 21.41: Annual Costs Associated with Maintaining the Recovery Reject Stockpiles Table 21.42: Annual Maintenance Costs for Plant Vehicles Table 21.43: Summary of Annual Processing Operation Costs Table 21.44: General and Administration Costs Table 21.45: General and administration Cost Estimate by Year Table 21.46: Estimated G&A Labour Cost Table 21.47: Site Services Mobile Equipment Table 21.48: Operating Costs Associated with Expenditures on Consumables and General Wear Items Table 21.49: Annual Operating Costs Associated with the Maintenance of the Electronic Scanners, Surveillance Equipment and Software Table 21.50: Sorthouse Roles, Shifts, Annual Compensation, Including Bonuses and Perquisites Table 21.51: Building Costs and Municipal Fees Table 21.52: Transportation Costs and Commission on Sales Table 21.53: Interpretive Centre Costs Table 21.54: Summary of Sorthouse and Interpretive Centre Costs

19 Table 22.1: Pre-Tax and Royalty Results of the Cash Flow Analysis Table 22.2: After-Tax and Royalty Results of the Cash Flow Analysis Table 22.3: Economic Analysis Results of Discounted Cash Flow Model for the Base Case Table 22.4: Base Case Cash Flow (Model Price + 15 %) Table 22.5: Case 1 (High Model Price) Table 22.6: Economic Criteria Utilized in the Cash Flow Models Table 22.7: WWW Modeled Diamond Price by Kimberlite Unit Table 22.8: Summary of Contingency included in Base Case and Case 1 pre-production capital (years ) Table 22.9: Summary of Contingency included in Base Case and Case 1 during production (years ) Table 22.10: Sensitivity Analysis Results (Pre-Tax and Royalty Basis, NPV (7 %)) Table 24.1: The Parcel and Model Price Details for the Star Kimberlite units (July 18, 2011 pricebook) Table 24.2: The Parcel and Model Price Details for the Orion South Kimberlite units (July, 2011 pricebook) Table 25.1: Summary and Status Update of Recommendations Presented in the Star Orion South Diamond Project PFS (Orava et al., 2010) Table A.1: Phased Pit Production Table A.2: Star Tailings Split Percentages Table A.3: Orion South Tailings Split Percentages Table A.4: Coarse PK Design Criteria Table A.5: Coarse PK Pile Design Characteristics Table A.6: Calculated Design Parameters for the PKCF Table B.1: Summary of Exceedances of SSWQO 1 and/or CWQG 2 Guidelines for Surface Water Quality Samples in Streams within LSA, 2006 to Table B.2: Summary of the Groundwater Monitoring Network Table B.3: Saskatchewan Environment Water Quality Guideline and MIEPR Exceedances, Groundwater Table B.4. Representative Mannville Water Chemistry from the 2010 Prototype Dewatering Well Pump Test Table B.5: Annual Meteorological Parameters at Fort à la Corne Weather Station Table B.6: Climate Normals for the Prince Albert SK Area for the Period Table B.7: Daily Dewatering Values by Year Table C.1: Proposed Ancillary Buildings Table C.2: Site Security Zoning Table D.1: Project Workforce by Area (2020) Table E.1: Project Development and Organization Table E.2: Contractor Work Components Table E.3: Commissioning Component Completion Targets Table E.4: Key Tasks and Milestones

20 1.0 SUMMARY Shore Gold Inc. (Shore) prepared this NI compliant Technical Report (the Report) on the Feasibility Study (FS) for the Star Orion South Diamond Project (the Project) situated in the Fort à la Corne (FalC) Provincial Forest, Saskatchewan, Canada. In addition, P&E Mining Consultants Inc. (P&E) and AECOM were retained and have prepared or contributed to sections of this Report. WWW International Diamond Consultants Ltd. (WWW) of Antwerp, Belgium provided the diamond pricing estimates utilized in the FS. This Report documents the Mineral Reserve Estimate as of July 14, 2011 for the Star Orion South Diamond Project and the results of a FS for the potential Star Orion South Diamond Project open pit mining and on-site processing operation. The Star Kimberlite deposit straddles a mineral disposition boundary between property that is held 100 % by Shore (Star Property), and property that is held by the FalC Joint Venture (FalC-JV), between Kensington Resources Ltd. (Kensington), a wholly-owned subsidiary of Shore (66 %) and Newmont Mining Corporation of Canada Limited (Newmont) (34 %) (the Star West Property). The Orion South Kimberlite deposit is held by the FalC-JV. Both the Star Diamond Project and the Orion South Diamond Project are operated by Shore and are being developed as a single entity as the Star Orion South Diamond Project. The financial evaluation in the FS is done on a 100 % combined ownership basis and does not separate the cash flows of the joint venture partners. The FS assessed the viability of developing and operating the Project as open pits with onsite ore processing based on the proposed mining method, ore processing methodology, stated assumptions of technical, engineering, legal, operating, economic, social and environmental factors and other relevant factors with projected gross revenues from rough diamond sales. Costs are reported in Q2, 2011 Canadian dollars unless otherwise stated, and all projected revenues are reported in Canadian dollars. KEY CONCLUSIONS The Base Case presented herein considers the February 2011 price book Model diamond prices plus 15 percent; Case 1 utilizes the February 2011 price book High Model diamond prices. The pre-tax and royalty results of the cash flow analysis for the Base Case and Case 1 are summarized in Table ES.1. The after-tax and royalty results of the cash flow analysis for the Base Case and Case 1 are summarized in Table ES.2. The FS has demonstrated the potential of the Project to become a significant diamond producer. As such, and assuming both a positive production decision by the Company s board of directors and the FalC-JV, and the securing of financing, it is the opinion of the Company that the Project warrants being advanced to the detailed design phase, which will support the necessary construction permits to allow for the construction of a mine and process facility at FalC. It is recommended that the permitting applications adhere to the engineering plans developed as part of the FS. This Report has been prepared in accordance with National Instrument Standards of Disclosure for Mineral Projects and Form F1 Technical Report. The terms Mineral Resource, Measured Mineral Resource, Indicated Mineral Resource, Inferred Mineral Resource, Mineral Reserve, and Probable Mineral Reserve have the meanings ascribed to those terms by the Canadian Institute of Mining, Metallurgy and Petroleum (CIM), as the i

21 CIM Definition Standards on Mineral Resources and Mineral Reserves adopted by CIM Council on December 11, Table ES.1: Pre-Tax and Royalty Results of the Cash Flow Analysis Case 1 Base Case (High Model Item (Model Price + 15 %) 1,2,3,4,5 Price) 1,2,3,4,5 Pre-tax & royalty IRR 16.4 % 19.3 % Pre-tax & royalty undiscounted $8,307 M $10,737 M total cash flow Pre-tax & royalty NPV (5%) $3,199 M $4,377 M Pre-tax & royalty NPV (7%) $2,136 M $3,041 M 1 The Project schedule includes an estimated 5 year pre-production period and a 20 year long mine production phase followed by mine closure. 2 The projected gross annual revenues from rough diamond sales have been estimated taking into consideration the mining and processing schedule; Model diamond parcel values by kimberlite unit presented in the WWW February 2011 re-pricing of samples of Star and Orion South diamonds; a US$0.945=CAD$1.00 exchange rate; and Shore s current perception of the future diamond market. 3 The cash flow model for the Project estimates future federal, provincial and local government taxes. 4 The estimated capital and operating costs (± 15 % estimation) were derived from first principles and supported by budget quotations and/or cost information derived from relevant cost databases and/or contractor quotations, and assumptions. The models include $253 million of contingency estimates on both capital and operating costs. 5 The results of the FS presented in this Report assess the economic viability of the following mining sequence: Star Pit - Phases 1 to 4, followed by Orion South Pit - Phases 1 and 2. Table ES.2: After-Tax and Royalty Results of the Cash Flow Analysis Base Case (Model Price + 15 Case 1 Item % ) 1,2,3,4,5 (High Model Price) 1,2,3,4,5 After-tax & royalty IRR 13.7 % 16.3 % After-tax & royalty undiscounted $5,558M $7,141 M total cash flow After-tax & royalty NPV (5%) $2,014 M $2,796 M After-tax & royalty NPV (7%) $1,272 M $1,879 M Payback 5.3 years 3.9 years 1 The Project schedule includes an estimated 5 year pre-production period and a 20 year long mine production phase followed by mine closure. 2 The projected gross annual revenues from rough diamond sales have been estimated taking into consideration the mining and processing schedule; Model diamond parcel values by kimberlite unit presented in the WWW February re-pricing of samples of Star and Orion South diamonds; a US$0.945=CAD$1.00 exchange rate; and Shore s current perception of the future diamond market. 3 The cash flow model for the Project estimates future federal, provincial and local government taxes. 4 The estimated capital and operating costs (± 15 % estimation) were derived from first principles and supported by budget quotations and/or cost information derived from relevant cost databases and/or contractor quotations, and assumptions. The models include $253 million of contingency estimates on both capital and operating costs. 5 The results of the FS presented in this Report assess the economic viability of the following mining sequence: Star Pit - Phases 1 to 4, followed by Orion South Pit - Phases 1 and 2. ii

22 PROJECT TIMELINE The FS assumes the following Project timelines: Detailed design planned to commence in second half of 2011; Permitting activities to support a Q3, 2012 construction start; SaskPower supply to site Q4, 2013; and Processing plant commissioning approximately 4 years after acquiring the necessary permits to proceed with construction. MINERAL RESERVE ESTIMATE The Star Orion South Diamond Project updated Mineral Reserve Estimate was derived from the recent Mineral Resource dollar value per tonne block models created for the Star and Orion South Kimberlite deposits. Utilizing feasibility-level operating costs for mining, processing and G&A, along with engineered pit slopes, pit optimizations were undertaken to derive pit shells for design purposes for each deposit. The phased pit designs developed include allowance for vehicle access ramps, conveyor ramps, and berms. The resulting open pit design surfaces for Star and Orion South were subsequently utilized to determine the mineralization contained within the resource models that was amenable for conversion to Mineral Reserves by dollar value-cut-off. Only material in the measured and indicated resource categories were converted with dilution and losses applied to determine the Reserve. A summary of the Mineral Reserve for the Star Orion South Diamond Project is shown in Table ES.3. Table ES.3: Star Orion South Diamond Project Mineral Reserve as of July 14, 2011 Deposit Category Ore (mt) Ore Grade (cpht) Carats (m) Star Probable Orion South Probable Total Probable ,380 Note: The Mineral Reserves have a 1 mm bottom screen size cut-off. PROCESS PLANT The FS estimates that the plant will process 14.3 Mtpa ore, which is equivalent to 87 % of the 16.4 Mtpa plant s nameplate capacity. The plant design is substantially based on the Star Kimberlite deposit, which contains significantly harder rock and generates, on average, higher Dense Media Separation (DMS) mass yields than the Orion South Kimberlite deposit. DIAMOND PRICES The diamond prices used in the cash flow model for the Star Orion South Diamond Project are based on valuations by WWW using their February 2011 price book. Expectations are iii

23 that Shore will sell its rough diamonds through a sales arrangement (e.g. in Antwerp) at an estimated marketing cost of 2.0 % of gross value. ROYALTIES The Government of Saskatchewan has developed its diamond royalty structure, and, as such, the financial analysis in the FS utilizes this structure. The government of Saskatchewan s diamond royalty regime features: a one percent base royalty on the value of mine production, with an initial five-year holiday; a stepped royalty rate on profits to a maximum of 10 % once capital investment is fully recovered; and, full-cost recognition including a 100 % depreciation rate of capital costs and a processing allowance. OVERBURDEN STRIPPING The FS includes a 20,000 tph capacity in-pit crush and convey (IPCC) system to strip overburden and waste rock which will be transported to a designated overburden and waste rock pile (overburden pile). The pre-strip of the sand and clay will be completed by truck and shovel fleet operated by Shore personnel. MINING The proposed Star and Orion South open pits will be conventional open pit mining operations. Shore will operate and maintain the waste stripping IPCC system, and mine the kimberlite ore using its own equipment and labour force. DEWATERING The open pits will be dewatered using deep dewatering wells and in-pit sumps and pumps. Hydrogeological modeling indicates that the pit dewatering systems will produce sufficient water to meet the plant s process water requirements. ENERGY Electrical power will be obtained from the provincial electrical utility SaskPower. The incoming electrical supply will be via overhead lines and, thus, will not require extensive groundwork. During the initiation of the construction phase, however, diesel generators will be required to supply electricity to the temporary camp, site based office trailers and surface waste stripping operations. TRANSPORTATION During construction, a new road will be built to accommodate the large loads and heavy traffic that will travel to the Project location. The road would be constructed along existing rural municipality rights of way, with approximately 9 km built over existing provincial grid roads, and 20.9 km built through the FalC forest. Through the FalC forest, the road would iv

24 generally follow the existing forestry roads, which would marginally reduce construction costs and the environmental impact associated with new road development. There is an opportunity to provide a rail spur to the site, although for the FS, no extension of the current line from Choiceland to site was utilized. ENVIRONMENT The draft Environmental Impact Statement (EIS) process for the Project was submitted in December 2010 to the Saskatchewan MOE and federal agencies for the Star Orion South Diamond Project in consideration of the potential for a combined mining and processing project. The EIS is currently in the technical review phase. Comments from regulators and other reviewers have been considered in the FS relating to baseline studies, community engagement activities, potential impacts of the proposed Project, plans for the progressive reclamation and closure of the Project and the cumulative effects assessment. The EIA for the Project is being carried out under the terms of the Saskatchewan Canada Harmonization Agreement where projects that require an environmental assessment by both the federal and provincial governments undergo a single assessment, administered cooperatively by both governments. The EIA will follow the process for a comprehensive study under the Canadian Environmental Assessment Act (CEAA). The government agencies with interest in the EIA for the Project include the Saskatchewan MOE, the Canadian Environmental Assessment Agency, Fisheries and Oceans Canada, Natural Resources Canada, Environment Canada and Transport Canada. The EIA for the Project is a rigorous assessment with a high level of technical and regulatory scrutiny and will include public consultation and opportunities for feedback. Based on technical feedback on the EIS from reviewers, and incorporation of comments received into the feasibility design, including alternatives, Shore is not aware of any material environmental issues that would prevent the Project from proceeding. TECHNICAL SUMMARY LOCATION, ACCESS AND INFRASTRUCTURE The Star Orion South Diamond Project is located in the FalC Provincial Forest, situated some 60 km east of Prince Albert, Saskatchewan. Good access is provided by paved highways, a grid gravel road system and an extensive network of forestry roads, passable by four-wheel drive and high clearance two-wheel drive vehicles all year round. The Project is situated on the north side of the Saskatchewan River, which can be crossed by bridge at either Prince Albert, to access the area from the west, or at Wapiti, north of Melfort, to access the area from the east. A 230 kv power line runs 9.6 km south of the area, and a large capacity 230 kv power line is located 21 km to the east. A pool of personnel is available from the many communities in the area. The climate in this region of Saskatchewan ranges from warm, dry summers with temperatures typically averaging 23 C to cold, dry winters with temperatures averaging - 11 C. Precipitation averages 323 mm annually. v

25 TENURE AND SURFACE RIGHTS The Star Kimberlite deposit and associated infrastructure are located within mineral disposition S in Section 18 of Township 49, Range 19, west of the 2nd Meridian. Township 49 is located within the Rural Municipality of Torch River. This mineral disposition is part of a larger group of 23 contiguous mineral dispositions totalling 9,280 ha. Shore owns a 100 % working interest in these claims. Mineral dispositions have been legally surveyed in accordance with the Saskatchewan Mineral Disposition Regulations of 1986, Part IV, Article 30(1)(d), and the boundaries coincide with the boundaries of the land survey system pursuant to the Saskatchewan Land Surveys Act and with the boundaries of existing surveyed land parcels. Shore holds a 100 % interest in an additional 93 claims in the immediate area, for a total of 116 claims covering 38,830 ha as of July 7, Shore also holds an interest in the FalC-JV, which is partially contiguous with the Star Diamond Project. Two of the mineral dispositions within the FalC-JV are considered to be part of the Star Diamond Project, namely S and S The Orion South Diamond Project is situated entirely within FalC-JV claims. The FalC-JV holds 121 claims totalling 22,544 ha as of July 7, GENERAL GEOLOGY The Project lies near the northeastern edge of the Phanerozoic Interior Platform, which extends from the Rocky Mountains in the west, to the Precambrian Canadian Shield in the northeast. The Interior Platform sediments exceed 600 m in thickness. The unmetamorphosed sedimentary rocks of the Interior Platform unconformably overlie metamorphosed basement rocks. These Proterozoic basement rocks have been interpreted to form part of the Glennie Domain which has been tectonically emplaced overtop of the Archean Sask craton. In the Star and Orion South area, the Precambrian is estimated to be at a depth of 730 m. KIMBERLITE GEOLOGY Based on surface and underground core drilling and underground mapping data the Star and Orion South Kimberlite deposits contain two distinct types of kimberlite: 1) eruptive kimberlite phases; and, 2) kimberlitic sedimentary rocks. The eruptive kimberlites of the Star Kimberlite are sub-divided into five main phases: Cantuar Kimberlite, Pense Kimberlite, Early Joli Fou Kimberlite (EJF), Mid Joli Fou Kimberlite (MJF) and Late Joli Fou Kimberlite (LJF). The eruptive kimberlites of the Orion South Kimberlite are sub-divided into five main phases: Cantuar Kimberlite, Pense Kimberlite, EJF, LJF and Viking Kimberlite. Each phase has distinct physical and chemical properties that enable their mapping and stratigraphic correlation in three dimensions within each kimberlite. It is important to note, however, that two stratigraphically equivalent kimberlite packages (e.g. Pense Kimberlite on Star and Orion South) may not have any genetic relationship and each may have very different diamond grade and carat value characteristics. Some of the stratigraphically equivalent kimberlite units (e.g. EJF on Star and Orion South) do, however, have similarities vi