BUILDING QUÉBEC’S FIRST DIAMOND MINE PDAC March 4 th 2014 Matt Manson President, CEO & Director Orin Baranowsky Director of Investor Relations
May 08, 2015
BUILDING QUÉBEC’S FIRST DIAMOND MINEPDAC March 4th 2014
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 themeaning 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 theseforward-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 anyperiod; (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 grossrevenues, operating cash flow and other revenue metrics set out in the Feasibility Study or Optimization Study; (vi) mine expansion potential and expectedmine 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 involvediscussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but notalways, using words or phrases such as “expects”, “anticipates”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives” orvariations thereof or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative ofany 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 suchstatements. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environmentin which Stornoway will operate in the future, including the price of diamonds, anticipated costs and Stornoway’s ability to achieve its goals. Certainimportant 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 bemade, and that decision will be positive; (v) anticipated timelines for the commencement of mine production; (vi) market prices for rough diamonds and thepotential impact on the Renard Project’s value; and (vii) future exploration plans and objectives. Additional risks are described in Stornoway's most recentlyfiled 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 foregoingfactors and other uncertainties and potential events. Stornoway does not undertake to update any forward-looking statement, whether written or oral, thatmay 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 DiamondProject, the technical report dated February 28th, 2013 in respect of the January 2013 Optimization Study, and the press release dated July 23rd 2013 inrespect of the July 2013 Mineral Resource estimate for further details and assumptions relating to the project. These technical reports and this pressrelease 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
Ready to Build
Focussed on Final Project Financing
4
MAJOR SHAREHOLDINGS*
12 MONTH ANALYST TARGETSMarket Capitalization:(based on voting and non-voting shares) C$ 163 million
Total Shares Outstanding: (Basic and Non-voting convertible shares) 175 million
Total Options & Warrants Outstanding:(9m Options $0.40-$2.40; 25m warrants $1.20) 33 million
Consolidated Cash: (as of January 31, 2014) C$ 21 million
Consolidated Debt: ($100m Standby Facility with IQ undrawn) C$ 66 million
IQ** (common shares)(non-voting convertible shares) 23.2% 33.0%
Agnico-Eagle 9.7% 8.4%
Caisse de dépôt et placement du Québec
7.5% (est)
6.5% (est)
Float 59.7% 52.0%
Fully Diluted
Basic
BMO Ed Sterck Market Perform na
Desjardins John Hughes Speculative Buy $1.70
Dundee Laurence Curtis Speculative Buy na
Laurentian Eric Lemieux Buy $1.70
Paradigm David Davidson Buy $2.00
RBC Des Kilalea, Outperform-
Speculative Risk $1.20
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 InvestissmentQuébec, 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 $0.93 on March 4rd 2014 and includes the issue of flow through shares which closed December 3rd 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
55
Towards Québec’s First Diamond Mine
6
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 PropertiesHydro-Québec FacilityRenard KimberlitesKimberlitic DykeRegional Kimberlites
Hydro-Québec PowerlinesRoute 167 Extension/ Renard Mine RoadRoadExploration/ Mining Projects
LEGEND:
0 1 2
Kilometers
60 0 60 120
Kilometers
Renard
LG3LG2LG4
Laforge 1
Laforge 2
Brisay
Foxtrot Property
StratecoEastmain MineWestern Troy
Troilus Mine
Eleonore
Temiscamie
Mistissini
ChibougamauMatagami
Wemindji
Renard Kimberlite Bodies
Kimberlite Bodies with Inferred Resources
7
The Feasibility: 11 years of mining
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
The Renard Diamond ProjectA Large, High Value Diamond Resource with a Very Long Mine Life Potential
0m
100m
200m
400m
600m
700m
500m
300m
Renard 6529/24cpht Renard 3
103/112cpht
Renard 2104/119cphtRenard 9
53cpht
Renard 460/50cpht
27 mcarat Indicated Mineral Resource
17 mcarat Inferred Mineral Resource
26-48 mcarat Exploration Target
Grades illustrated are for Indicated and Inferred Mineral Resources respectively at a +1DTC sievesize cut-off. Reserve and Resource categories are compliant with the "CIM Definition Standards onMineral Resources and Reserves". Mineral resources that are not mineral reserves do not havedemonstrated 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 iffurther exploration will result in the target being delineated as a mineral resource.
Reserve Based Mine PlanJan 2013 Feasibility Study Optimization
0m
100m
200m
400m
600m
700m
500m
300m
Notes
1. Key Assumptions:C$1=US$1, Oil US$95/barrel, 2.5% real terms diamond price growth 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.
2. Expressed in May 2011 terms.3. Expressed in October 2012 terms, as adjusted in October 2013 LNG FS.4. Actual.5. Excludes capitalized preproduction costs.6. Expressed in de-escalated nominal terms.
Reserve Based Mine Plan1
(Jan 2013 FS Optimization using Parity Dollar and May 2011 Diamond Pricing)
Mining ParametersMine Life 11 yearsMineral Reserve 17.9 mcaratsAve. Diamond Price2 $180/caratProduction Rate 2.2 mtonnes/yrAve. Diamond Production 1.6 mcarats/yrGross Revenue (C$M) $4,268Initial Capital CostsInitial Cap-ex3 $754mEscalation Allowance $45mRenard Mine Road4 $70mOperating ParametersOperating Cost3,5 $58/t ($76/carat)Operating Margin 67%Operating Cash Flow $2.7BValuation Parameters6
After Tax NPV (7%; Jan 1 2013) $391mAfter Tax IRR 16.3%Payback 4.8 years
Renard 65Renard 2 Renard 3
Renard 4
9Resource Based Mine PlanLong Term Plan: Foundation of Permitting and ESIA
0m
100m
200m
400m
600m
700m
500m
300m
Renard 65Renard 2 Renard 3
Renard 4
Renard 9
27 mcarat Indicated Mineral Resource
17 mcarat Inferred Mineral Resource
26-48 mcarat Exploration Target
Resource Based Mine Plan(Basis of December 2012 ESIA and Mine Permitting)
Represents the mine plan contained within the Renard December 2012 ESIA and operating authorizations. Not part of Stornoway’s public disclosure consistent with NI 43-101.
Increased project valuation and mine life.
Includes the mining of up to 17mcarat Inferred Resources within the scope of the Feasibility Study mine infrastructure.
Includes the mining of up to 2.3mcarat Indicated Resources within a Renard 65 open pit for increased annual processing capacity from 2.2mtonnes/yr to 2.5mtonnes/yr.
Additional sustaining capital only, principally on underground mine. Incremental capital for deepening of production ramp from 600m to 700m depth.
Does not include non-resource exploration upside. All pipes open at depth.
Reserve and Resource categories are compliant with the "CIM Definition Standards onMineral Resources and Reserves". Mineral resources that are not mineral reserves donot have demonstrated economic viability. The potential quantity and grade of anyExploration Target is conceptual in nature, and it is uncertain if further exploration willresult in the target being delineated as a mineral resource.
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What has Changed Since the January 2013 Optimization Study?
0m
100m
200m
400m
600m
700m
500m
300m
Renard 65Renard 2 Renard 3
Renard 4
Renard 9
27 mcarat Indicated Mineral Resource
17 mcarat Inferred Mineral Resource
26-48 mcarat Exploration TargetReserve and Resource categories are compliant with the "CIM Definition Standards onMineral Resources and Reserves". Mineral resources that are not mineral reserves donot have demonstrated economic viability. The potential quantity and grade of anyExploration Target is conceptual in nature, and it is uncertain if further exploration willresult in the target being delineated as a mineral resource.
14% Increase in Indicated Resources
July 2013: Additional 2.3Mcarats at Renard 65 (7.9 Mtonnes at 29cpht), open pittable to 150m depth.
7% Reduction in Op-ex with LNG Option
October 2013: Annual op-ex reduction of up to $10m using LNG for power generation, with incremental cap-ex increase of just $2.6m.
10% Improvement in C$:US$ ExchangeCurrent US$0.90 rate boosts operating margin and increases NAV compared to parity dollar assumption used in Jan 2013 FS Optimization.
Increase in Average Diamond Prices
March 2013: Revised estimates of US$190/ct for Renard 2; US$180/ct for Renard 65, and an estimated +5% additional market movement since.
New Québec Tax Regime Absorbed
May 2013: New Québec system of mining taxation and royalties: Long term clarity on tax environment.
11Mine Plan Production Schedule and Cash Flow(Mineral Reserves Only)
-
500,000
1,000,000
1,500,000
2,000,000
2,500,00020
13
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
Ore
Ton
nage
(t)
Open Pit & Underground Mining
R2 Pit R3 Pit R2 UG R3 UG R4 UG
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
Dia
mon
ds (c
arat
s)
Diamond Production
R2 R3 R4
-
100,000
200,000
300,000
400,000
500,000
600,000
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
Rev
enue
(k C
$)
Gross Revenue (Real Terms)
R2 R3 R4
12Stornoway will be a Significant Diamond ProducerCurrent and Future Diamond Producers
Source: Kimberly process and Company Reports
1 De Beers (Anglo/Botswana) $6,404m
2 Alrosa (Russia) $4,801m
3 Dominion Diamond (TSX: DDC) $940m
4 Rio Tinto (ASE: RIO) $783m
5 Petra (note 1; L: PDL) $432m
6 Stornoway (note 2; TSX: SWY) $306m7 Mountain Province (note 3; TSX: MPV) $273m
8 Gem (L: GEMD) $218m
9 Lucara (note 4; TSX: LUC) $155m
10 Others $2,588m
Total $16,900m
DeBeers38%
Alrosa28% BHPB/
Dominion6%
RioTinto5%
Petra2%
SWY2%
MPV2%GEM
1%LUC1%
Others15%
2013 World Diamond Production Data/ Forecast Future Production
Notes:
1. Petra 12 month results for period ending December 31, 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 mid-range per Lucara FY2014 Operating Guidance.
13
490 m asl
-275 m asl
0 m
790 m
Indicated Resource
Legend
Inferred Resource
Inferred Resource of R2 CRB
Low TFFE
High TFFE
Ongoing Resource Expansion$10m Drill Program for 2014 Announced on Jan 22nd 2014
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 McaratsTFFE between 700m and 770m depth. Open below 770m. (2014 Drill Program)
12
3
14Renard’s High Value DiamondsLarge Diamond Potential Not Included in Base Case Diamond Valuation Models
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: 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.
The January 2013 FS Optimization utilized an average diamond valuation of US$180/ct based on May 2011 prices.
KimberliteBody
Size ofValuation Sample(carats)
WWW March 2013 Sample
Price(US$/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 $203Notes
1. All prices in US$/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”Diamond Valuations:
15
100
150
200
250
300
350
01/01/10 01/01/11 01/01/12 31/12/12 01/01/14
Inde
x to
200
9=10
0
WWW Rough Index, CPI Adjusted Renard Model Price Growth
WWW R.I.CPI Adj Base Price
May 2011 Mar 2013
+20%
-10%
+10%
-20%
Rough Diamond Price MovementsThe Diamond Market, January 2010 to March 2014
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
16
Waste Rock
Processed Kimberlite Containment (PKC)
OverburdenStockpile
R2-R3
Ore Stockpile
R65
Camp
Plant
Road from Chibougamau
General Project ArrangementSmall Project Footprint of 3.1km2, Modest Environmental Impact
17
Project Execution
Accommodation Complex
Process and Power Plants
Access Infrastructure Pre-Financed and Already Constructed
Renard Mine Road open to traffic since August 30th
2013. Aerodrome open since November 5th 2013.
Favourable Cost and Labour Environment
Limited amount of recent mine construction activity in Quebec means competitive cost environment and good contractor/labour availability.
Owner’s Team and EPCM Contract in PlaceMontreal based owner’s team in place for planning, engineering, environment, stakeholder relations and cost management. Stornway will also enter into an EPCM agreement with SNC-Lavalin & AMEC.
LNG Power Option Completed for Reduced Operating Cost Risk
LNG power option utilizes all-season access road and existing commercial LNG distribution network in Quebec.
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 Mistissiniand 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.
19The Route 167 Extension and the Renard Mine Road The Only Canadian Diamond Mine with an All-Season Access Road
50 km
Renard ProjectExplor./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
Construction of an all-season access road connecting Renard to the Québec highway system began in Feb. 2012.
Road segments A & B (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”.
All 4 segments were connected and opened for mine construction traffic on August 30th 2013, 2 months ahead of schedule and approximately 10% below budget.
To complete this work, Québec provided Stornoway $77m of debt financing, repayable upon commercial production at Renard.
Stornoway has been able to apply $7m of debt savings to complete the civil works for the Renard Aerodrome.
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
20
Views of the RoadKM 210 KM 237
KM 155
21Renard Mine AerodromeCivil Works Completed Early Utilizing Savings Under the Renard Mine Road Credit Facility
Tree Cutting Area
RunwayCenterline
First Landing: November 5th
22Site ProgressOctober 2013
R65 Borrow Pit
Tree Clearing
Bulk SampleDMS Plant
Construction Camp
Renard Mine Road
R65
R2R9
R4
23Project 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
The timely completion of mine project financing is the principal driver on the schedule of project construction and start up
24
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
Stornoway is Focused on Completing Project Financing for Construction in 2014
and 2015, with first Production in 2016
2525
Appendix 1: NI 43-101 Mineral Reserves and Mineral Resources
26
Probable Mineral Reserve Mining Recovery Factors Utilized in the Reserve Calculation
Kimberlite Grade(cpht)
Tonnes(millions)
Contained Carats(Millions)
InternalDilution
Mining Recovery
MiningDilution
Renard 2 OP 95 1.31 1.24 0.0% 96.0% 7.1%Renard 2 UG 80 17.03 13.62 7.0% 82.4% 20.2%Renard 3 OP 93 0.72 0.67 0.0% 96.0% 10.5%Renard 3 UG 84 1.00 0.84 21.1% 85.0% 14.0%Renard 4 UG 42 3.72 1.58 1.4% 78.2% 14.0%
Total 75 23.79 17.95 5.9% 82.9% 17.9%
Notes: Reserve categories are compliant with the "CIM Definition Standards on Mineral Resources and Reserves". Totals may not add due to rounding. Grades are estimated at a +1DTC sieve size cut-off.
R2 , 83%
R3, 8%R4, 9%
Revenue
R2 , 77%
R3, 7%
R4, 16%Tonnage
R2 , 83%
R3, 8%R4, 9%
Carats
NI 43-101 Probable Mineral ReservesJanuary 28th 2013
27
Notes: Resource categories are compliant with the "CIM Definition Standards on Mineral Resources and Reserves". Mineral resources that are not mineral reserves do not have demonstrated economic viability. Indicated Mineral resources are Inclusive of the Mineral Reserve. Totals may not add due to rounding. Grades are estimated at a +1DTC sieve size cut-off.
Renard NI 43-101 Mineral ResourcesJuly 23rd 2013. Changes to Previous January 2011 Mineral Resource in Italics
Kimberlite Grade(cpht)
Tonnes(millions)
Contained Carats(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) 11.77 (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) 6.54 (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%) 3.04 (+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 56.8 (+1.2%) 29.67 (-4.6%) 16.85 (-3.5%)
28
Notes: The potential quantity and grade of any exploration target (previously referred to as “potential mineral deposit”) is conceptual in nature, and it is uncertain if further exploration will result in the target being delineated as a mineral resource. The exploration upside for the Renard kimberlite pipes has been determined by projecting reasonable kimberlite
volumes from the base of the inferred Resource to a depth of 700m below surface. In the case of the Lynx and Hibou dykes, the exploration upside was established on the basis of known drill intersections of kimberlite for which insufficient diamond sampling exists to adequately estimate a diamond resource grade.
Target for Further ExplorationJuly 23rd 2013. Changes to Previous January 2011 Estimates in Italics
Kimberlite Grade(cpht)
Tonnes(millions)
Contained Carats(Millions)
Renard 2 104 to 158 4.0 to 4.6 4.2 to 7.3Renard 3 105 to 168 0.8 to 1.7 0.8 to 2.8Renard 4 50 to 77 11.1 to 15.4 5.6 to 11.8Renard 9 52 to 68 3.9 to 6.3 2.0 to 4.3Renard 65 25 to 33 29.0 to 40.9 7.3 to 13.5Lynx Dyke 96 to 120 3.1 to 3.2 3.0 to 3.8Hibou Dyke 104 to 151 2.7 to 2.9 2.9 to 4.3Total ExplorationUpside
54.6 (-0.8%) to 74.9
(-0.8%)25.7
(+9.1%) to 47.8(-1.4%)
2929
Appendix 2: Feasibility Study and Feasibility Optimization
30
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
31Optimization Study Financial Analysis Project Assumptions, Valuation and Pay-Back
Key Assumptions in the Financial Model1
MiningParameters
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 $391NPV9% $514 $274
IRR 20.4% 16.3%Pay-Back (years) 4.69 4.82
Notes
1. Optimization Study, released January 28th 2013.
2. Expressed in October 2012 terms.
3. Expressed in May 2011 terms.
4. Expressed in nominal terms.
5. Expressed in Dde-escalated nominal terms.
32Optimization Study Financial Analysis Capital Costs
Capital Costs1 (C$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 infrastruc.
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
33Optimization 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 21.22Processing 15.29G&A2 and Infrastructure 18.27
Total Open Pit3 54.78
Underground Unit Costs1 $/tonne
Underground 23.64Processing 15.29G&A2 and Infrastructure 18.27
Total Underground3 57.20
Life of Mine Operating Costs1,4 (Real Terms)
Total Operating Cost (C$M) 1,352
Diamond Prod. (Mcarats) 17.6
Production Cost357.63 C$/ t76.63 C$/ 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$1,352m)
34Optimization Study Financial AnalysisCarat Production and Revenue
Revenue Parameters1 (Real Terms)
Total Gross Revenue (C$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 1.91Renard 2 Underground 13.62
Renard 3 Underground 0.84
Renard 4 Underground 1.58
Total Underground 16.03Total 17.95
11%
89%
Diamond Production by Mining Method
Open Pit
Underground
83%
8%9%
Diamond Production by Kimberlite Pipe
Renard 2
Renard 3
Renard 4Notes: 1. Optimization Study, released January 28th 2013.
35Optimization Study Financial AnalysisProject Valuation Sensitivities
80% 90% 100% 110% 120%Operating Cost 19.6% 18.0% 16.3% 14.6% 12.8%Capital Cost 21.2% 18.6% 16.3% 14.4% 12.6%Revenue 9.5% 13.1% 16.3% 19.3% 22.1%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%After Tax IRR
80% 90% 100% 110% 120%Operating Cost 24.3% 22.3% 20.3% 18.3% 16.1%Capital Cost 26.0% 22.9% 20.3% 18.0% 16.0%Revenue 12.1% 16.4% 20.3% 23.9% 27.2%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
80% 90% 100% 110% 120%Operating Cost 526,139 460,174 391,480 320,039 245,911Capital Cost 506,817 449,806 391,480 331,668 272,020Revenue 99,135 246,431 391,480 535,409 677,695
0
100
200
300
400
500
600
700
80% 90% 100% 110% 120%Operating Cost 891,143 789,142 683,499 574,143 461,111Capital Cost 845,695 764,629 683,499 601,269 519,031Revenue 231,318 457,408 683,499 909,511 1,135,60
0
200
400
600
800
1,000
1,200Pre-Tax IRR
After Tax NPV
Pre-Tax NPV
36Liquefied 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.
37Liquefied 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 $2.6m.• Up to 43% less greenhouse gas emissions.• Long term, stable supply market utilizing existing commercial distribution network within Quebec.• Elimination of on-site propane, as LNG will be used for building and underground mine heating.
Diesel will continue to be used for the mobile mining fleet and construction activities
Cost Improvements with LNGJan 2013
Optimization Study with Diesel
Jan 2013 Optimization Study
with LNGUnit Power Cost (C$/kWh) 1 $0.299 $0.188 (-37%)Unit Operating Cost (C$/tonne) 1,2 $57.63 $53.84 (-7%)Initial Capital Cost (C$m) 1 $752.1 $754.0 (+0.3%)Life of Mine Capital Cost (C$m) 1,3 $1,013 $1,010 (-0.3%)
Annual Diesel Consumption (million litres) 27.5 5.9 (-79%)Annual LNG Consumption (thousand m3/annum) n/a 41.7Annual Propane Consumption (thousand m3/annum) 3.5 n/a
Notes
1. 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$95/barrel
3838
Appendix 3: Project Comparables
39Diamond Industry Cost Curve Source: Published FY2012 Results, FS Life of Reserve Data and Company Estimates
World Diamond Project ComparablesCost/Revenue
40Project ComparablesRecent Canadian Diamond Mines Compared as of the Date of each FS
Source: Company Reports and Stornoway Estimates. Excludes resource and diamond price upside from both projects. Excludes diamond price escalators. Assumes similar diamond recovery and mining dilution parameters.
Ekati (1998)BHPB, As Built
Estimates
Diavik (1999)Rio-Tinto, As
Built Estimates
Victor (2008)De Beers, As
Built Estimates
Renard FS Optimization Study (2013)
Resource ParametersResource (m carats) 161 133 No data 41Resource (US$) $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 17.9Reserve (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 $752m
41Project ComparablesRecent Canadian Diamond Development Projects Compared as of the Date of each FS
Gahcho Kué FS (2010) De Beers/Moun. Prov.
Star-Orion FS (2011) Shore Gold
Renard FS Optimization Study (2013)
Resource ParametersResource (m carats) 61 43 41Resource (US$) $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 $752m
Source: Company Reports. Excludes resource and diamond price upside from both projects. Excludes diamond price escalators. Assumes similar diamond recovery and mining dilution parameters.
4242
Appendix 4: The Diamond Market
43Major Diamond Mines and Development Projects WorldwideFew Enough Mines to Fit on One Map
South Africa • Venetia (De Beers)
• Finsch, Premier (Petra Diamonds)
• Lace (DiamondCorp)
Tanzania• Williamson (Petra Diamonds)
Russia • Arkhangelsk District (Alrosa)
• Yakutia District (Alrosa)
• Grib (LUKOIL)
India• Bundar (Rio Tinto)
Australia• Argyle (Rio Tinto)
• Ellendale (Gem Diamonds)
Canada• Ekati (BHPB)
• Diavik (Rio Tinto/Harry Winston)
• Victor, Snap Lake, Gahcho Kue (De Beers)
• Renard (Stornoway)
• Star (Shore Gold/Newmont)
Botswana• Jwaneng, Orapa (De Beers)
• Gope (Gem Diamonds)
• Karowe (Lucara Diamonds)
Angola• Catoca (Alrosa)
Democratic Republic of Congo• Mbuyi-Mayi
Sierra Leone• Koidu, (Steinmetz Group)
Lesotho• Letseng (Gem Diamonds)
• Kao (Namakwa Diamonds)
• Liqhobong (Firestone)
• Mothai (Lucara)
44The Rough Diamond Business in Context1/8th the Size of the Copper Business
Source: USGS, LME, Kimberly Process
45The Diamond PipelineAn Industry with Many Intermediaries
Source: TacyD.I.B.April 2013
Production Cost
Production Value
Mine Sales to Industry
Rough Sales to Cutting Centers
Value of Polished Produced
Value of Diamonds in
Retail Jewelery
Sales
Retail Sales of Diamond
Jewelery
Estimated Average Margins
after Costs (%)
Polishing: -10 to 15%
Jewelery Manufac: -10
to 10%
Jewelery Retail: 20 to
50%
Mine Production Rough Trading and Diamond Polishing Diamond Jewelery
Value in US$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
46
Future Rough Diamond Supply
0
20
40
60
80
100
120
140
160
180
Pro
du
cito
n /
Su
pp
ly M
ct
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.
4747Rough Diamond Supply and Demand ForecastsAn Example: Bain September 2013
Rough Diamond Demand
Supply and DemandRough 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%.
48
$109$121 $117
$182 $190
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
0
100
200
300
400
500
600
700
2007 2008 2009 2010 2011 2012 2013
Inde
x O
ctob
er 2
003
= 10
0
Commodity Index Data
WWW R.I. Polished Prices Index GoldIMF CPI IMF IPI IMF CPI NonFuelIMF Coal(Aust) IMF Metal IMF CuS&P TSX Comp Index
S&P
TSX
Com
posi
te In
dex
Wee
kly
Clo
sing
S&P
TSX
Com
posi
te In
dex
Wee
kly
Clo
sing
S&P
TSX
Com
posi
te In
dex
Wee
kly
Clo
sing
S&P
TSX
Com
posi
te In
dex
Wee
kly
Clo
sing
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
4949
Appendix 5: Management Biographies
50
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 Exploration
Mario Courchesne
Construct. Manager
Freddie Mianscum
IBA Implem. Officer
51
PRESIDENT, CHIEF EXECUTIVEOFFICER AND DIRECTOR
STORNOWAY DIAMOND CORPORATION
49 WELLINGTON STREET EAST, SUITE 300
TORONTO, ONT M5E 1C9
TEL. : (416) 304-1026
www.stornowaydiamonds.com TSX:SWY
Matt Manson, PhD.
Matt Manson was appointed President of Stornoway Diamond Corporationin March 2007 following the acquisition of Ashton Mining of Canada andContact Diamond Corporation, and subsequently President & CEO inJanuary 2009.
As President & CEO, Mr. Manson is responsible for the management of thecompany as a whole, playing a leadership role in all key business unitsincluding finance and budgets, exploration, human resources, investorrelations and advanced project development including the RenardDiamond Project.
Between 1999 and 2005 he was employed by Aber Diamond Corporation(now Harry Winston Diamond Corporation) as VP Marketing andsubsequently VP Technical Services & Control, during which time heparticipated in the US$230m project financing for the Diavik DiamondProject and oversaw Aber's technical and marketing operations during thefeasibility, construction and early production phases of Diavik. Between2005 and 2007 he was employed by Contact Diamond Corporation,formerly Sudbury Contact Mines and a 40% owned subsidiary of Agnico-Eagle Mines Limited, as President & COO and subsequently President &CEO.
Mr. Manson is a graduate of the University of Edinburgh (BSc Geophysics,1987) and the University of Toronto (MSc Geology 1989 and PhD Geology,1996), and has over 17 years of experience in diamond exploration,development and production.
Appendix: Management Biographies
52
CHIEF OPERATING OFFICERAND DIRECTOR
Patrick Godin, Eng., Asc.
Pat Godin joined Stornoway as Chief Operating Officer in May 2010 andwas appointed to the Board of Directors in October 2011. He isresponsible for the development of the Renard Diamond Project in north-central Québec, on track to becoming Québec’s first diamond mine.
Prior to joining Stornoway Diamond, Mr. Godin acted as Vice President,Project Development for GMining Services, focused on the development ofmining projects in the Americas and West Africa, and was responsible forthe developed of the Essakane Mine in Burkina Faso under contract toIAMGOLD.
He was previously Vice President of Operations for Canadian Royalties,specifically heading the development of their nickel project in NorthernQuébec. He was also President and General Manager of CBJ-CAIMANS.A.S., a French subsidiary of Cambior / IAMGOLD, holder of the CampCaïman gold mining project located in French Guiana. For many years, hewas involved in Cambior’s various Canadian properties in Abitibi-Témiscamingue, through progressive management positions in projectdevelopment and mine management.
He holds a bachelor’s degree in mining engineering from Université Lavalin Québec. Mr. Godin is a member of the “Ordre des Ingénieurs duQuébec”, of the Certified Directors College and of The Canadian Instituteof Mining, Metallurgy and Petroleum (CIM). He is the Chairman of theBoard of Geomega Resources and a director of Orbit-Garant Drilling.
STORNOWAY DIAMOND CORPORATION
1111 RUE ST. CHARLES O.
LONGUEUIL, QUÉBEC J4K 4G4
TEL. : (450) 616-5555
www.stornowaydiamonds.comTSX:SWY
Appendix: Management Biographies
53
VICE PRESIDENT, FINANCE ANDCFO
Zara Boldt, B.A., CGA
Zara Boldt was appointed Vice President, Finance with Stornoway in May2007, after serving as Stornoway’s Controller between 2004 and 2007, andChief Financial Officer in March 2010.
As Vice President Finance and CFO, Ms. Boldt is responsible for themanagement of the corporate and financial affairs of the corporation, andfor the oversight of its regulatory reporting requirements.
Ms. Boldt has held positions of progressive responsibility with severalmineral exploration companies, in addition to several years of experiencewith a national investment dealer. Her most recent resource industry rolesinclude CFO for Sherwood Copper Corporation from May 2006 to May 2007and Controller for the Northair Group of Companies between May 2004and April 2007.
Ms. Boldt is a Certified General Accountant and a graduate of theUniversity of Puget Sound in Tacoma, Washington. She is a director ofTroon Ventures Ltd., where she serves as Chair of the Audit Committee.
STORNOWAY DIAMOND CORPORATION
980 W FIRST STREET, #116
NORTH VANCOUVER, BC, V7P 3N4
TEL. : (604) 983-7750
www.stornowaydiamonds.comTSX:SWY
Appendix: Management Biographies
54
Stornoway Diamond Corporation TSX:SWY
Head Office:1111 Rue St. Charles Ouest,
Longueuil, Québec J4K 4G4
Tel: +1 (450) 616-5555
IR Contact:
Orin Baranowsky, CFA, Director IR
Tel: +1 (416) 304-1026 x103
www.stornowaydiamonds.com