Annual Meeting of Shareholders Montral, May 14 th , 2019 Forward - - PowerPoint PPT Presentation

Annual Meeting of Shareholders

Montréal, May 14th, 2019

Forward Looking Information

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This document contains forward‐looking information (as defined in National Instrument 51 102 – Continuous Disclosure Obligations) and forward‐looking statements within the meaning of Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995 (collectively referred to herein as “forward‐looking information” or “forward‐looking statements”). These forward‐looking statements are made as of the date of this document and, the Corporation does not intend, and does not assume any obligation, to update these forward‐looking statements, except as required by law. These forward‐looking statements relate to future events or future performance and include, among others, statements with respect to Stornoway’s objectives for the ensuing year, our medium and long‐term goals, and strategies to achieve those objectives and goals, as well as statements with respect to our management’s beliefs, plans, objectives, expectations, estimates, intentions and future outlook and anticipated events or results. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward‐looking statements reflect current expectations or beliefs regarding future events and include, but are not limited to, statements with respect to: (i) the amount of Mineral Reserves, Mineral Resources and exploration targets; (ii) the estimated amount of future production over any period; (iii) net present value and internal rates of return of the mining operation; (iv) expectations and targets relating to recovered grade, size distribution and quality of diamonds, average ore recovery, carats recovered, carats sold, internal dilution, mining dilution and other mining parameters set out in the 2016 Technical Report as well as levels of diamond breakage; (v) expectations, targets and forecasts relating to gross revenues, operating cash flows and other revenue metrics set out in the 2016 Technical Report, growth in diamond sales, cost of goods sold, cash cost of production, gross margins estimates, planned and projected diamond sales, mix of diamonds sold, and capital expenditures, liquidity and working capital requirements; (vi) mine and resource expansion potential, expected mine life, and estimated incremental ore recovery, revenue and other mining parameters from potential additional mine life extension; (vii) expected time frames for completion of permitting and regulatory approvals related to ongoing construction activities at the Renard Diamond Mine; (viii) the expected time frames for the completion of the open pit and underground mine at the Renard Diamond Mine; (ix) the expected financial obligations or costs incurred by Stornoway in connection with the ongoing development of the Renard Diamond Mine; (x) mining, development, production, processing and exploration rates, progress and plans, as compared to schedule and budget, and planned optimization, expansion

• pportunities, timing thereof and anticipated benefits therefrom; (xi) future exploration plans and potential upside from targets identified for further exploration; (xii) expectations concerning outlook and trends in the diamond

industry, rough diamond production, rough diamond market demand and supply, and future market prices for rough diamonds and the potential impact of the foregoing on various Renard financial metrics and diamond production; (xiii) the economic benefits of using liquefied natural gas rather than diesel for power generation; (xiv) requirements for and sources of, and access to, financing and uses of funds; (xv) the ability to meet Subject Diamonds Interest delivery obligations under the Purchase and Sale Agreement; (xvi) the foreign exchange rate between the US dollar and the Canadian dollar; and (xvii) the anticipated benefits from recently approved plant modification measures and the anticipated timeframe and expected capital cost thereof. 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”, “schedule” 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 by Stornoway or its consultants 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 prospects and strategies and the environment in which Stornoway will operate in the future, including the recovered grade, size distribution and quality of diamonds, average ore recovery, internal dilution, and levels of diamond breakage, the price of diamonds, anticipated costs and Stornoway’s ability to achieve its goals, anticipated financial performance, regulatory developments, development plans, exploration, development and mining activities and commitments, access to financing, and the foreign exchange rate between the US and Canadian dollars. Although management considers its assumptions on such matters to be reasonable based on information currently available to it, they may prove to be incorrect. Certain important assumptions by Stornoway or its consultants in making forward‐looking statements include, but are not limited to: (i) the accuracy of our estimates regarding capital and estimated workforce requirements; (ii) estimates of net present value and internal rates of return; (iii) recovered grade, size distribution and quality of diamonds, average ore recovery, carats recovered, carats sold, internal dilution, mining dilution and other mining parameters set out in the 2016 Technical Report as well as levels of diamond breakage; (iv) the expected mix of diamonds sold, and successful mitigation of ongoing issues of diamond breakage in the Renard Diamond Mine process plant and realization of the anticipated benefits from plant modification measures within the anticipated timeframe and expected capital cost; (v) the stabilization of the Indian currency market and full recovery of prices; (vi) receipt of regulatory approvals on acceptable terms within commonly experienced time frames and absence of adverse regulatory developments; (vii) anticipated timelines for the

Forward Looking Information (continued)

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development of an open pit and underground mine at the Renard Diamond Mine; (viii) anticipated geological formations; (ix) continued market acceptance of the Renard diamond production, conservative forecasting of future market prices for rough diamonds and impact of the foregoing on various Renard financial metrics and diamond production; (x) the timeline, progress and costs of future exploration, development, production and mining activities, plans, commitments and objectives; (xi) the availability of existing credit facilities and any required future financing on favourable terms and the satisfaction of all covenants and conditions precedent relating to future funding commitments; (xii) the ability to meet Subject Diamonds Interest delivery obligations under the Purchase and Sale Agreement; (xiii) Stornoway’s interpretation of the geological drill data collected and its potential impact on stated Mineral Resources and mine life; (xiv) the continued strength of the US dollar against the Canadian dollar and absence of significant variability in interest rates; (xv) improvement of long‐term diamond industry fundamentals and absence of material deterioration in general business and economic conditions; and absence of significant variability in interest rates; (xvi) increasing carat recoveries with progressively increasing grade in LOM plan; (xvii) estimated incremental ore recovery, revenue and other mining parameters from potential additional mine life extension with minimal capital expenditures; (xviii) availability of skilled employees and maintenance of key relationships with financing partners, local communities and other stakeholders; (xix) long‐term positive demand trends and rough diamond demand meaningfully exceeding supply; (xx) high depletion rates from existing diamond mines; (xxi) global rough diamond production remaining stable; (xxii) modest capital requirements post‐2018 with significant resource expansion available at marginal cost; (xxiii) substantial resource upside within scope of mine plan; (xxiv) opportunities for high grade ore acceleration and processing expansion and realization of anticipated benefits therefrom; (xxv) significant potential upside from targets identified for further exploration; and (xxvi) limited cash income taxes payable over the medium term. By their very nature, forward‐looking statements involve inherent risks and uncertainties. We caution readers not to place undue reliance on these forward‐ looking statements as a number of important risk factors could cause the actual outcomes to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates, assumptions and intentions expressed in such forward‐looking statements. The operating results and financial condition

• f the Corporation are subject to a number of inherent risks and uncertainties associated with its business activities, which include the financing, exploration, development, construction and operation of its mine and processing
• facility. The operating results and financial condition are also subject to numerous external factors, which include economic, regulatory, legal, tax and market risks impacting, among other things, supply of materials and demand for

rough diamonds, rough diamond prices, foreign exchange rates, inflation and the availability and cost of capital to fund the capital requirements of the business. Each of these risks could have a material adverse effect on the Corporation’s future business, financial condition, prospects, results of operations or cash flow, and could cause actual results to differ materially from those described in any forward‐looking statements contained in this

• document. There can be no assurance that the Corporation has been or will be successful in identifying all risks or that any risk‐mitigating strategies adopted to reduce or eliminate risk will be successful. These risks should be

considered when evaluating the Corporation and its guidance. With the exception of the going concern risk, which is described in the Corporation’s most recently filed MD&A, a comprehensive discussion of the risks faced by the Corporation can be found in the Corporation’s 2018 Annual MD&A and most recently filed AIF, which are available on SEDAR at www.sedar.com under the Corporation’s profile. Qualified Persons The Qualified Persons that prepared the technical reports and press releases that form the basis for the presentation are listed in the Company’s AIF dated March 28, 2019. Disclosure of a scientific or technical nature in this presentation was prepared under the supervision of Mr. Patrick Sévigny, P.Eng. (Québec), Vice President, Operations, and Mr. Robin Hopkins, P.Geol. (NT/NU), Vice President, Exploration, both “qualified persons” under National Instrument (“NI”) 43‐101. Non‐IFRS Financial Measures This document refers to certain financial measures, such as Adjusted Net Loss, Adjusted EBITDA, Adjusted EBITDA Margin, Average Diamond Pricing Achieved, Cash Operating Cost per Tonne Processed, Cash Operating Cost per Carat Recovered and Capital Expenditures, which are not measures recognized under IFRS and do not have a standardized meaning prescribed by IFRS. As a result, these measures may not be comparable to similar measures reported by other corporations. Each of these measures have been derived from the Corporation’s financial statements and have been defined and calculated based on management’s reasonable judgement. These measures are used by management and by investors to assist in assessing the Corporation’s performance. The measures are intended to provide additional information to the user and should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS. Refer to the “Non‐IFRS Financial Measures” section of the Corporation’s Management Discussion and Analysis as at and for the quarter ended March 31, 2019 for further discussion of these items, including reconciliations to IFRS measures.

2018 in Review

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Open Pit Mining Underground Mining Transition

Milestones

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January 2017 Commercial Production Attained July 2016 First Ore in Plant June 2017 Open Pit Ramp‐Up Complete April 2018 OP Mining in R2/R3 Complete

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q3 Q4

2016 2017 2018

Q1 Q2 Q3 Q4

2019

December 2017 First UG Mine Production Blast

R2 OP R3 OP R65 OP R2 UG R3 UG

April 2019 UG Production in R3 Initiated August 2018 UG Ramp‐Up Complete Q4 2019 Beginning of production at R2 470L Mining Horizon

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18.81ct 15.86ct 36.84ct 16.69ct 21.81ct 17.62ct 188.55ct 13.11ct

Stock Performance

12 Month Performance of Peer Diamond Equities

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SWY FDI PDL MPVD LUC GEMD

‐100% ‐75% ‐50% ‐25% 0% 25% 50% May‐2018 Jun‐2018 Jul‐2018 Aug‐2018 Sep‐2018 Oct‐2018 Nov‐2018 Dec‐2018 Jan‐2019 Feb‐2019 Mar‐2019 Apr‐2019

SWY LUC MPVD FDI GEMD PDL

2018 Full Year Results Compared to FY2018 Guidance

At December 31, 2018. All quoted figures in CAD$ unless noted

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FY2018 Guidance FY2018 Result Open Pit Tonnes Mined 2.40 to 2.50m 2.27m Underground Tonnes Mined 1.80 to 1.85m 1.82m Ore Tonnes Processed 2.35 to 2.40m 2.33m Carats Recovered 1.35 to 1.40m 1.32m Grade (cpht) 54 to 56 57 Carats Sold 1.20 to 1.25m 1.20m Average Diamond Price Achieved (+7) (US$/ct) $125 to $165 $136 Average Diamond Price Achieved (‐7) (US$/ct) $15 to $19 $18 Cash Operating Cost per Tonne Processed1 ($/t) $48 to $50 $57 Cash Operating Cost per Carat Processed1 ($/ct) $88 to $90 $100 Capital Expenditures1 $90m to $95m $88m

1. See note on “Non‐IFRS Financial Measures”

Financial Highlights

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$37.8 $49.5 $25.1 $32.1 $47.3

$94 $104 $94 $77 $83 $120 $133 $122 $103 $110 $0 $20 $40 $60 $80 $100 $120 $0 $50 $100 $150

Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19

Millions dollars Price per Carat Gross Proceeds US$/ct $/ct 314 371 206 312 430 200 400 600

Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19

Thousand Tonnes/Carats Supplemental Carats ROM Carats

563 562 598 606 583

286 223 329 486 445 51 40 55 80 76 200 400 600 800 1,000

Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19

Thousand Tonnes/Carats Tonnes Carats Grade (cpht)

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Processing Carat Sales1 Gross Proceeds and Pricing2,3

• 2. See note on “Non‐IFRS Financial Measures”
• 3. Before Stream and royalty
• 1. “ROM” Carats represent all diamonds larger than +1 DTC sieve size. “Supplemental” carats represent additional diamonds smaller than

the 7 DTC sieve size that have been recovered in excess of that expected in the Renard Mineral Resource statement.

+39% +45% +51% ‐5% +38%

FY2018 and Q1 2019 Processing and Sales

At March 31, 2019. All quoted figures in CAD$ unless noted.

Mining ‐ Mobile Equipment 3% Mining ‐ Infrastructure 3% Mining ‐ Development 63% Process Plant 7% Power Plant 2% Site Services 22% Mining ‐ Open Pit 6% Mining ‐ Underground 29% Mining ‐ Rehandling and Sampling 2% Process Plant 33% PKC 4% Site Services 26%

FY2018 and Q1 2019 Costs

At March 31, 2019. All quoted figures in CAD$ unless noted.

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Cash Costs1 Capital Expenditures1

1. See note on “Non‐IFRS Financial Measures”

Breakdown for Q1 2019 Breakdown for Q1 2019

$50.70 $58.69 $57.15 $60.10 $57.14 $99.77 $147.69 $103.74 $74.90 $74.88

20 40 60 80 100 120 140 160

Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19

$ Op‐Ex per Tonne Processed ($/t) Op‐Ex per Carat Recovered ($/ct) 31.1 19.9 22.5 14.8 17.0 5 10 15 20 25 30 35

Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19

$m Capital Expenditures ($m)

Revenue, Adjusted EBITDA1 and Income

FY2018 and Q1 2019 Financial Results

At March 31, 2019. All quoted figures in CAD$ unless noted.

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Balance Sheet

Cash and cash equivalents of $29.5 million. Debt of $327.7 million.

1. See note on “Non‐IFRS Financial Measures” 55.9 56.9 29.4 23.3 53.3 24.7 1.6 ‐7.3 ‐6.5 13.4 ‐12.8 ‐36.9 ‐40.2 ‐46.2 ‐49.2 ‐60 ‐40 ‐20 20 40 60 80

Q1 FY18 Q2 FY18 Q3 FY18 Q4 FY18 Q1 FY19

$m Revenue Adjusted EBITDA Adjusted Net (Loss) Income

Cost Reduction Initiatives and Restructuring Plan

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A continued downward pressure on the market price for rough diamonds has inhibited the Corporation’s ability to generate positive free cash flow in 2019. To address this situation, the Corporation has been actively engaging with its principal stakeholders in order to secure its long‐term financial viability. Negotiations on possible scenarios such as, but not limited to, debt restructuring and/or securing additional financing are ongoing. Additionally, the Corporation has embarked on a cost reduction initiative which aims to yield significant savings in the next 9 to 12 months.

Renard Operations

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Open Pit Mining

Mining in the Renard 2 / Renard 3 open pit was completed in April 2018. Some ore was left behind due to safety concerns related to ice buildup

• n the pit walls. Though these ore tonnes were not recovered from the
• pen pit, they will be mined from underground.

Renard 65 supplied open pit feed to the process plant and stockpiles thereafter. Mining operations in Renard 65 were temporarily halted in April, as stockpiles are at sufficiently high levels to sustain its planned feed to the plant until the second quarter of 2020.

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Underground Mining

First production blast in Renard 2 was in December 2017. Underground production ramp‐up was completed in August 2018. Planned backfilling from surface for wall dilution control has been cancelled, 590m level mining horizon has been combined with 710m level mining horizon, cutting significant costs. On a monthly basis, production is now consistently achieving above its design capacity of 6,000 tonnes of ore per day.

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175 1,445 1,982 4,172 3,585 3,848 5,801 5,587 6,218 7,128 7,046 5,821 7,109 7,230 6,487

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Jan‐18 Feb‐18 Mar‐18 Apr‐18 May‐18 Jun‐18 Jul‐18 Aug‐18 Sep‐18 Oct‐18 Nov‐18 Dec‐18 Jan‐19 Feb‐19 Mar‐19 Apr‐19 Average Daily Tonnage (tonnes per day)

UG Mine Design Capacity = 6,000 tpd

Ore Tonnes Hauled to Surface

Underground Mining

First production panels developed at the north pipe margin of the 290m level in highly dilute, low grade kimberlite. Grade increased significantly throughout the second half of 2018 as mining progressed towards the center of the kimberlite pipe. Continuous improvement has been realized as knowledge of the deposit has increased:

Country rock was more competent and kimberlite was less competent than expected. Kimberlite is caving naturally. Mining method was transitioned from Blasthole Shrinkage (BHS) to Assisted Block Caving (ABC). Second Renard 2 mining horizon has a higher average grade and will see further mining method improvements based on the experience gained.

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Renard 2 290L: Ramped‐up underground production in 2018.

Renard 9 Renard 4 Renard 65 Renard 2 Renard 3

Renard 2‐3: Open pit mining completed in 2018. Renard 65: Open pit production to complement R2 feed. Mining temporarily halted starting in April due to high stockpiles. Renard 3: First underground production planned for Q3 2019 – Actual April 2019. Renard 2 470L: Development of second underground mining horizon in 2019 – on schedule. Renard 4: Underground production planned starting in 2026.

N290 N270 N470 N710 N290

Processing: Utilization trending upwards

Ore sorting – Successful plant improvement

2018/2019 Breakage levels average below 15% and remain within industry average Continue to improve sorting units efficiency and reliability

Achieve 82% or better run time average Maintain 2% kimberlite or less kimberlite rejection

Power consumption reduction

Decreased from 18kWh/t pre‐OSP, to 15kWh/t

Further improve waste removal

Current 20% of head feed removed, further improve to 25%

Overall Plant Utilization – an area of focus for

• ptimization

At 80% in March and at 84% in April, up from January and February. Target at 82%.

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Ore Sorting Improvements

Environment, Health and Safety

21 2.9 0.6 1.6 0.1 1.7 7.5 2.9 4.6 2.5 5.0 0.0 0.5 1.0 1.5 2.0 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 8.00 2014 2015 2016 2017 2018

Million Hours Injury rate Hours Worked LTI RIF

Transition to underground mining, with training of many workers new to underground, resulted in an increase in the lost time and reportable injury frequencies. No incidents of environmental non‐compliance occurred in 2018.

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Employment at the Renard Mine

Targeting Local Hiring: Stornoway Employees at Mine Site

61% Other Québec 34% Northern Québec 5% Other Canada

525 Employees at Mine Site at December 31, 2018 26 63 42 66 72 79 14 24 87 52

10 20 30 40 50 60 70 80 90 100 110 Other communities (CA) Other communities (QC) Québec Montréal Saguenay‐Lac‐St‐Jean Abitibi‐Témiscamingue Other Communities (NQ) Chapais Chibougamau Mistissini & Eeyou Istchee

Economic Benefits

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Abitibi‐ Témiscamingue $24 M Chibougamau and Chapais $8 M Jamésie $22 M Rest of Québec $87 M Rest of Canada $13 M Outside Canada $4 M

C$140 million of expenditures in Québec in 2018

AEMQ 2018: Excellence in Sustainable Development Award

Community Engagement

24 2018 Sustainable Development Report

Sales and Marketing

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Diamond Sales

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1. Sale by sale basis, normalized for variations in quality and size distribution 2. Before stream and royalty

Stornoway sells 100% of the Renard diamond production by arms length tender in Antwerp with Bonas‐Couzyn as sales commissionaire. 8 sales are scheduled for 2019. Tender Key Performance Indicators

14,2 13,5 12,1 13,6 14,5 12,8 11,7 11,5 11,5 12,7 13,3 18,5 15,3 16,1 17,3 17,7 13,8 14,3 13,6 13,3 12,3 11,5 153 124 119 133 127 151 142 150 150 151 163 190 173 196 174 175 166 156 177 160 167 163 90 83 81 96 103 107 97 105 105 110 109 132 119 137 122 118 111 99 107 111 118 114 ‐ 5,0 10,0 15,0 20,0 25,0 30,0 35,0 40,0 45,0 50,0 ‐ 20 40 60 80 100 120 140 160 180 200 Bid per Parcel Attendees Bidders

Stornoway’s Achieved Pricing Exceeding Index

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SWY Real Price Index vs WWW’s Rough Price Index1, Real Terms2

1. Roughprices.com 2. Sale by sale basis, normalized for variations in quality and size distribution

In real terms (excluding changes in mix) pricing for Renard diamonds increased 27% between the first sale in November 2016 and June 2018. Market has been volatile and weak since Q3‐18, larger impact on smaller and lower quality parcels. Stornoway’s achieved pricing is heavily affected due to 67% of its production by weight being in small diamond (<11DTC). Market changes in Q3/Q4‐18 resulted in a 13% decrease of price index in real terms and stabilized into Q1‐19. Mid‐stream inventory, financing availability and market uncertainty on the impact of synthetic diamonds also affecting small diamond categories. Underlying polished diamond demand remains strong, particularly in the US market.

100 101 102 95 98 100 101 98 96 93 94 95 97 97 98 100 102 100 100 101 102 101 100 100 100 112 110 114 115 119 119 110 111 114 120 119 120 125 127 123 118 113 114 114 113 90 95 100 105 110 115 120 125 130 2016‐11 2016‐12 2017‐01 2017‐02 2017‐03 2017‐04 2017‐05 2017‐06 2017‐07 2017‐08 2017‐09 2017‐10 2017‐11 2017‐12 2018‐01 2018‐02 2018‐03 2018‐04 2018‐05 2018‐06 2018‐07 2018‐08 2018‐09 2018‐10 2018‐11 2018‐12 2019‐01 2019‐02 2019‐03 WWW SWY

Current Rough Diamond Market Effect on Pricing – Reconciliation to 2014 Valuation

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2014 Pre‐Financing Valuation for Stornoway R2/R3 Bulk Sample Diamonds = US$172 per carat (WWW International Diamond Consultants) Market for rough diamonds has since been negatively affecting Renard’s diamond achieved sale pricing Renard has been operating in a low pricing environment since 2016. Low pricing is mainly due to market, not to Renard’s production quality Using 2018 for analysis:

Achieved pricing (inclusive of supplemental) for 2018: US$92 per carat Difference of –US$79 per carat explained by:

Market under performance (price for smalls, increased discount for fluorescence, etc): ‐US$54 per carat Renard product mix –US$25 per carat (Finer SFD recovered vs R2R3 Bulk Sample)

Achieved Actual Price US$/ct – Reconciliation to 2014 WWW Valuations

US$172/ct R2/R3 2014 WWW Valuation

2018 Breakdown of carats sold and sale gross revenue (US$) by size class

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1% 32% 67%

Carats Sold by Size Class ‐ 2018

21% 61% 18%

Gross Revenues by Size Class ‐ 2018 Coarse carats produced (>5 ct) account for 1% of total carats sold in 2018, but 21% of the value; whereas fines carats produced (i.e smalls) account for 67% of total carats sold, but only 18% of the value.

Carats Sold by Size Class Gross Revenues (US$) by Size Class

Outlook

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FY2019 Guidance

Provided January 16, 2019 All quoted figures in CAD$ unless noted

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Mining and Processing Carats Recovered1 (million) 1.80 to 2.10 Grade1 (cpht) 71 to 87 Tonnes Processed (million) 2.40 to 2.55 Selling and Marketing Carats Sold1 (million) 1.80 to 2.10 Average Diamond Pricing1 (US$/ct) US$ 80‐105 Cost Capital Expenditures2 (million) $ 70‐80 Cash Operating Cost per Tonne Processed2 ($/t) $ 47‐54 Cash Operating Cost per Carat Recovered2 ($/ct) $ 57‐72

1. Inclusive of both run‐of‐mine and supplemental diamond production 2. See note on “Non‐IFRS Financial Measures”

Victor Komsomolskaya Argyle2 Voorspoed Koffiefontein Diavik Sable, Pigeon, Lynx, Misery Main, Koala (Ekati) 30 25 20 15 35 2016 2017F 2018F 2019F 2020F 2021F 10 5 2022F 2023F 2024F 2025F

The supply outlook, driven by the depletion of existing mines shows a downward trending CAGR of ‐1% to ‐2% to 2030. Global Rough Diamond Supply, Mct, Base Scenario

2010 2014 2018F 2022F 2026F 2030F 120 90 60 30 180 150 Existing mines CAGR (2016‐2030) 9% ‐3% ‐ ‐1 – ‐2% New mines/ projects Additional production Forecast

Favorable Global Rough Diamond Production Outlook1,2

Source: Bain & Company “The Global Diamond Industry 2017: The Enduring Story in a Changing World” 1. Additional resources include tailings reprocessing, which could be viable in existing mines as run‐of‐mine is depleted, early‐stage projects and projects currently marginal, which may become viable as rough diamond prices increase 2. Argyle production profile based on Stornoway management estimates

32 Argyle Mine, Australia

Global Rough Diamond Depletion Curve, Mct

Long Mine Life, Significant Resource Upside

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2019 drilling and sampling aimed at accelerating the mining of R3 and R4 in the Renard mine plan.

860L 710L 470L 290L 290L 400L Portal R2‐R3 Open‐pit R4‐R9 Open‐pit (under internal evaluation) R65 Open‐pit

Renard 65 Renard 4 Renard 9 Renard 2 Renard 3

1 3 5 6 2 4 9 10 7 8

Exploration drilling planned at depth to expand resource base. Indicated Resources Inferred Resources Target for Further Exploration

270L 410L

5,345m delineation drilling completed to 315m depth. Confirmed widths and location of Renard 3, and presence of high grade 3dg and 3h units. R3 ore above the 290m mining level included in the 2019 production schedule, several years earlier than expected. Exploration drilling planned at depth in 2019 to expand resource base. To be tested with sustaining drilling from existing underground workings in 2019. 13,546 tonne sample excavated from surface at Renard 4 to evaluate potential future open pit at Renard 4 and Renard 9 in area of Mineral Resources currently outside the Renard Mine Plan. Processing of sample complete, analysis ongoing. Renard 2 Renard 3 Renard 4 Renard 7 Surface drilling started in March 2019.

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12.4 ct 14.9 ct

Renard 2 Renard 3 Renard 9 Renard 4 Renard 8 Renard 65 Renard 1 Renard 7 Renard 10 Lynx Dyke Hibou Dyke Processed Kimberlite Containment Process Plant Camp

Renard 4

Renard 4 bulk sample excavation completed. Processing of sample completed. Analysis ongoing. Three “special” stones recovered: 14.9ct, 12.4ct and 11.1ct.

Renard 7

Surface drilling started in March 2019. Located on dry ground, approximately 1.6km from process plant.

2019 Objectives

Operational Q3 2019: Initiation of underground production at Renard 3. Q4 2019: Initiation of production at the second underground mining horizon of Renard 2. Growth: upgrading resource base at Renard. Seize opportunities for operational efficiencies and implement cost reduction initiatives. Financial Optimization of capital structure and balance sheet.

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Mine Rescue Team Wins Québec Mine Rescue Competition

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The Renard Mine rescue team won all awards at the 57th Québec Provincial Mine Rescue Competition:

Best BG4 Breathing Apparatus Mechanic Best Theoretical and Technical Performance Best First Aid Performance Best Team Management Best Team in the Field

The team was awarded the overall title for a second consecutive year.

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Head Office: 1111 Rue St. Charles Ouest, Longueuil, Québec J4K 4G4 Tel: +1 (450) 616‐5555 Investor Relations Contact: Alex Burelle, Manager – IR and Business Development aburelle@stornowaydiamonds.com Tel: +1 (450) 616‐5555 x2264 www.stornowaydiamonds.com Info@stornowaydiamonds.com

Stornoway Diamond Corporation TSX:SWY, TSX:SWY.DB.U

Merci, Thank You, Meegwetch Questions