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exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drillholes that are spaced closely enough to confirm both geological and grade continuity.”

Weighting of samples by linear Ordinary Kriging (OK) of adjusted LDD sample data was used for the estimation of block grades. Kriging parameters were derived from the global EJF variography. The EJF experimental semi-variogram was used for all units for estimation. A block discretization level of 4 x 4 x 2 was used during kriging. All kimberlite unit limits were treated as hard boundaries, and data used during estimation were limited to LDD samples located within their respective kimberlite unit wireframe. A two-pass strategy was used for estimation.

During the first pass, a minimum of four and a maximum of six samples from two or more LDDs within 170 m (the semi-variogram range) of the block centroid were required. All block grades estimated during the first pass were classified as Indicated Resource. The average sample mass used to estimate an Indicated block was over 100 tonnes.

During the second pass, blocks not populated during the first pass were estimated. A minimum of three and a maximum of six samples from one or more LDDs within 340 m (twice the semi- variogram range) of the block centroid were required. All block grades estimated during the second pass were classified as Inferred Resource.

Individual block values were then calculated from diamond grade estimates using the WWW High scenario.

In order to ensure that the reported resources meet the CIM requirement for “reasonable prospects for economic extraction” a conceptual floating-cone pit shell was developed based on all available resources (Indicated and Inferred), using the economic parameters listed in Table 16.8. Economic parameters were derived by P&E from knowledge of similar projects. The overall slope angle of 25° was based on preliminary geotechnical investigations by Shore which suggests that a standard bench configuration with a slope of 18° in the overburden and 30° in ore and waste rock is achievable. Estimated grades are based on the recovery of diamonds from bulk sample pilot plant processing of Star Kimberlite, and therefore diamond recovery was assumed to be 100%.

Table 16.8: Economic parameters

Exchange Rate Stripping Cost Mining Cost Processing Cost G&A Overall Pit Slop

e Angle

CAD$1.00 = US$0.85 CAD$1.00/tonne CAD$1.34/rock tonne CAD$3.58/ore tonne CAD$1.50/ore tonne 25°

Internal Cut-off


Generation of the floating-cone pit shell (Figure 16.8) was based on calculated block values. The results from the floating-cone analysis are used solely for the purpose of reporting mineral resources that have reasonable prospects for economic extraction.

P&E Mining Consultants Inc. NI 43-101 Technical Report No 159 Shore Gold Inc. - Star Diamond Project Resource Estimate Update

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