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Diamond grades from LDD batch samples were adjusted upwards by P&E to compensate for observed diamond breakage and loss during drilling. The adjustment factor was derived using industry standard analyses of diamond recoveries from LDD mini-bulk sampling and underground bulk sampling. The relevant adjustment factor was determined by P&E from the EJF Inner Area sample results. The ratio of the average middle-fraction diamond grade between the LDD samples and the underground bulk samples was used to compensate for the observed diamond damage and loss. The selection of the middle fraction interval is a reflection of the greater consistency of diamond plant recoveries in this size range. The calculated adjustment factor was applied across the model for all units and P&E believes the adjustment factor to be reasonable and appropriate for the Star Resource Estimate.

Diamond grades were estimated for each kimberlite unit using Ordinary Kriging of adjusted LDD sample grades. A partial block percentage model was used to accurately represent the volume and tonnage of the individual kimberlite units within each block. The Mineral Resource Estimate uses a 1.0 millimetre bottom diamond size cut-off and considers all diamondiferous material above an elevation of 70 metres above sea level. Average bulk density values were assigned by P&E to the resource model by lithological unit, based on extensive bulk density measurements completed by Shore on drillhole core.

An internal cut-off grade of CAD$5.08 per tonne was calculated by P&E based on a G&A cost of CAD$1.50 per ore tonne and a processing cost of CAD$3.58 per ore tonne. Mineral resources as reported by P&E were constrained to a conceptual floating-cone pit shell derived from the WWW “High value” scenario2. The results from the floating-cone analysis are used solely for the purpose of reporting mineral resources that have reasonable prospects for economic extraction.

This Mineral Resource Estimate has an effective date of February 23, 2009 and has been reported in conformity with the Canadian Securities Administrators’ National Instrument 43-101 and CIM guidelines on the “Estimation of Mineral Resource and Mineral Reserves Best Practices”, including the “Guidelines for Reporting of Diamond Exploration Results”. The table below summarizes the total Star Resource Estimate by main kimberlite unit and classification.

2 Due to the conservative nature of the WWW price models, where the upside potential of the coarse size frequency distribution was not fully reflected, P&E used the WWW High scenario for the reporting of economic resources.

P&E Mining Consultants NI 43-101 Technical Report No 159 Shore Gold - Star Diamond Project


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