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That portion of the Star resource that falls wholly within the FALC joint venture property is summarized in the following table.

UNITS

Tonnes x 1000

Grade (cpht)

Carats (x 1000)

Cantuar

6,522

16.83

1,098

Pense

0

0.00

0

EJF Inner

21,630

16.65

3,602

EJF Outer

4,741

9.36

444

MJF

16,966

5.50

933

LJF

738

3.88

29

TOTAL Indicated

50,597

12.07

6,105

Cantuar

79

14.46

11

Pense

0

0.00

0

EJF Inner

1,390

14.54

202

EJF Outer

2,095

10.24

215

MJF

1

4.96

0

LJF

5

3.38

0

TOTAL Inferred

3,571

12.00

428

Mineral Resource Statement for Star West (60% Shore, 40% Newmont) only. Reported at an internal cut-off of CAD$5.08 for the Cantuar, Pense, Early Joli Fou (EJF), Mid Joli Fou

(MJF) and Late Joli Fou (LJF) kimberlite units.1,2,3,4,5,6

Class

Indicated

Inferred

  • (1)

    Mineral resources are accumulated within an optimized floating-cone pit shell.

  • (2)

    Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be

materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues. (3) The quantity and grade of reported inferred resources in this estimate are conceptual in nature. There is no guarantee that all or any part of the mineral resource will be converted into a mineral reserve.

  • (4)

    1.0 millimetre bottom cut-off assumed.

  • (5)

    WWW High scenario.

  • (6)

    Due to rounding, figures may not add up to the totals shown.

A conceptual floating-cone pit shell, based on the economic parameters in the table below, was used to estimate a Mineral Resource on the Star Kimberlite. This meets the CIM requirement for “reasonable prospects for economic extraction”. Economic parameters were derived by P&E from knowledge of similar projects. The overall pit slope angle of 25° was based on preliminary geotechnical investigations, which suggest 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%.

Exchange Rate

CAD$1.00 = US$0.85

Stripping Cost

CAD$1.00/tonne

Mining Cost

CAD$1.34/rock tonne

Processing Cost

CAD$3.58/ore tonne

G&A

CAD$1.50/ore tonne

Overall Pit Slope Angle

25°

Internal Cut-off

CAD$5.08

Economic parameters.

Price Sensitivities

As a test of the sensitivity of the Star resource to market and diamond price fluctuations, the resource model was also run with the High value scenario pit shell using the WWW Low and Model price scenarios. The results suggest that the Star resource is relatively insensitive to moderate diamond price fluctuations, as shown in the table below.

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

viii

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