Star Diamond AGM

0:08 Morning, ladies and gentlemen. Welcome to the Star Diamond Corporation Annual and General Meeting and Special Meeting. Welcome to all of you in present here and also the simulcast crew who are watching online around the world. I am the chairman and interim chief executive officer of the corporation and in accordance with the bylaws of the corporation I will ask the position of chairman for this meeting. I will assume the position of chairman for this meeting. I will assume the position of chairman for this meeting. At this time, I would like to ask that all cell phones be turned off for the duration of the meeting. Thanks. Before we begin the formal business of the meeting, it's been a while since we've had a meeting. I'd like to take a moment to introduce the directors and the executive officers who are present here today. And for those of you on the simulcast, unfortunately you won't get to see them, but if you can just raise your hand, Lisa, Lisa Riley, Larry Phillips, and we're welcoming Marilyn Spink to the board as well.

1:05 We also have in attendance George Reed, who is our senior technical advisor, and Rick Johnson, our CFO. And John Truswell of Bennett Jones LLP, legal counsel to Corporations with me at the table. We also have Mark Schimmel, our Project Manager over there.

1:25 I propose to deal with the formal aspects of the meeting now following which management will speak on the activities and the future outlook for the corporation. So I'd ask you to hold your questions until then. I'd like to remind everyone that only persons at this meeting who are entitled to be present to move or second resolutions to speak or ask questions or to vote on resolutions are registered shareholders, whose shares are held in their own name and not in a brokerage account, or persons who have been duly appointed as proxy holders and have registered with the scrutineers. I note that there are a number of people present who are not registered shareholders or duly appointed proxy holders. Unless someone objects to the presence of these guests, they will be allowed to attend, but must refrain from speaking or voting on the resolutions.

2:15 Are there any objections to the presence of these guests? Great, no objections. We welcome all the guests today. In order to assure the meeting covers the required business in an efficient manner, I prearranged it with designated registered shareholders and proxy holders to move in second the motions of business today. This is in no way intended to discourage any comments or questions from other registered shareholders or proxy holders. Unless a ballot is requested by a shareholder or proxy holder or the chairman, I ask that when a vote is requested, shareholders do so by a show of hands. The annual general and special meeting of Stardiamond Corporation will now come to order. With the consent of this meeting, I will ask John Trustwell of Bennett Jones to act as secretary of the meeting.

3:02 The first item of business will be the appointment of a scrutineer to report on the shareholders present in person and the number of shares represented in person or a proxy at this meeting and to compute the votes on any poll taken. With the consent of the meeting, I will ask Bart Wingerak of Odyssey Trust to act as scrutineer.

3:25 I have received declaration as to the mailing prepared by Odyssey Trust indicating that the common shareholders of record at the close of business on March 31st were mailed the notice calling this meeting. I instruct the secretary to keep a copy of the notice of meeting with proof of service with the minutes of this meeting. Would the secretary of the meeting please explain the quorum requirements. According to section 54 bylaw number 1A of the corporation, for there to be a quorum for this meeting, 2 persons present holding or representing by proxy not less than 5% of the shares entitled to vote at this meeting must be present at the commencement of the meeting. Mr. Chairman, the scrutineer's report indicates that there are 16 shareholders present in person or represented by proxy holding 143,655,802

4:16 shares. I therefore declare that the requisite quorum of shareholders is present. I direct the scrutineer's report to be annexed to the minutes of this meeting. Great. Thank you, John. I now declare that the meeting has been regularly called and is properly constituted for the transaction of business. I now present to the meeting, the audit financial statements of the corporation for the year ended December 31st, 2023, together with the report of the auditors there on. I will not ask shareholders to approve the financial statements. However, I would be pleased to deal with any relevant questions concerning the financial statements following the meeting. We will now proceed with the election of directors. The board has determined that 4 directors are to be elected, and I will now receive nomination for the election of the 4 directors for the ensuing year or until their successors are elected or appointed.

5:06 Mr. Chairman, my name is Debbie Bennett and I am a newly appointed proxy voter of the corporation. I nominate for election as directors of the corporation. The nominees named in the April 14th, 2023 information circular, namely Ewan Mason, Lisa Riley, Larry Phillips, and Darlene Stange. Thank you, Debbie. As no additional nominations were received in accordance with the advance notice provision of corporations bylaws no additional nominees for election of the board of directors will be considered I will now ask for someone to move and second the motion to elect those

5:55 elected as directors of the corporation for the ensuing year or until their successors are elected or appointed. Mr. Chairman, my name is Debbie Bennett and I'm the new lead for the Proctor Building Corporation and I second the motion. Great, thank you both. The motion is now open for discussion, if any. All those in favour, please signify by raising their hand. Contrary. As the number of directors nominated is equal to the number of board positions to be elected, I declared that the 4 nominated individuals are duly elected as directors of Star Diamond Corporation to hold office until the next annual meeting or until their successes are elected or appointed. The final voting totals for each director will be available in the press release to be issued by the corporation following the meeting.

6:47 The next item of business is the appointment of auditors and I ask for a motion in that regard please. Mr. Chairman, I nominate KDEMGLLP Chartered Professional Accountants for appointment as the auditors of the corporation to hold office until the next annual general meeting of shareholders at such a new duration as may be determined by the board of directors.

7:10 Mr. Chairman, I second the motion. Great, thank you both. The motion is now open for discussion, if any. Okay, all those in favor, please signify by raising their hand. Contrary? I declare the motion carried. The final voting totals for the auditor appointment will also be available in the press release issued by the corporation following the meeting. The next item of business is the resolution to approve the continuation and amendment and restatement of the corporation shareholder rights plan. I will now ask for a motion in that regard. Mr. Chairman, I move that the resolution obtained to the approval of the continuation of the amendment to the stakeholder shareholder rights plan as stated in the B414-2020-2023 information circular be approved.

8:00 Mr. Chairman, I second the motion. Thank you both.

8:04 The motion is now open for discussion. All those in favor, please signify by raising their hand. Contrary. Thank you, I declare the motion carried. The final voting totals for this motion will also be available in the press release issued by the corporation following the meeting. So finally, is there any further business brought properly before this meeting? As there is no further formal business of the meeting, may I please have a motion terminating the formal part of the meeting?

8:40 Mr. Chairman, I move the meeting be terminated. Chairman, I second the motion. Thank you both. All those in favor, please signify by raising your hand. Contrary? I declare the motion carried and the meeting terminated. So folks, been an interesting wild ride the last year. So what I would like to do to start with is for George Reid to bring you up to date with what we've been doing. Technically, there's been quite a bit going on. And then after that, I'll give you a brief recap and tell you what I can tell you. And then we'll take your questions. Okay, George, over to you. Thank you, ladies and gentlemen. It's nice to be back and talking to you in person once again And to those out on the simulcast, I'm pleased to be with you.

9:37 As you know, I'm the senior technical advisor and I always talk about technical stuff at this meeting. Some of it you will have heard before and we will just focus on some highlights of that. And then we will look at work that has been done and opportunities that exist elsewhere. I've just got to find the right button, there we go. Obviously, This is when you have insomnia, you can read that. And then we get to the highlights that you've heard before, but we'll reiterate them because it's always important to remember the uniqueness of these four-teller corn kimberlites. Namely that they have very attractive diamonds. They have a large size frequency distribution and consequently very strong diamond prices.

10:25 And they compare very favorably to other mines in the world. I won't labor the point further than that, except to say that lo and behold, the 2 mines that produce some of the largest diamonds in the world, Letzing and Karowi in Botswana, their size frequency distribution lies on either side of the red line of the main economic unit of the star kimberlite, namely the EJF kimberlite. So we are obviously in very good company and that chart suggests that in future production, when the mine gets to production, we will see some potentially very big diamonds. It's a large, long life mine, outstanding geology, attractive economics.

11:14 We've heard many of these things before. But let's remember that there is a huge opportunity here in central Saskatchewan, a low-risk jurisdiction, near-existing power and transport infrastructure, and most notably that we went through very, very rigorous hoops of getting both provincial and federal environmental approval on this project. Trading on the TSX, our stock position listed there, and obviously, Newmont Corporation is still a significant shareholder. The local geography, as we know, we can drive in our pickup truck from Saskatoon and we're on site in about 3 hours, probably a bit less if we're taking it right to the edge of the speed limit.

12:02 The red lines on that map are paved highways. The purple line is the Fort Holocone Forest. The Fort Holocone Forest is not a nature reserve. It is a working forest, and it only so exists because the land was too infertile for agriculture. You see that the agricultural quilt that spreads out over the interior of Saskatchewan completely surrounds the forest. 60 kilometers as the crow flies from east of Prince Albert, about 100 kilometers by road, and access into the forest on forest roads that are available 365 days of the year. There are many kimberlites that make up this kimberlite cluster in the Fort Olicorn, shown in red with the 2 kimberlites star and Orion south, the southeast end that have been extensively evaluated.

12:55 The claim position covering all of those kimberlites is almost contiguous, allowing us to spread our expenses over the large, massive kimberlites. So there are more than 60 kimberlites other than star and Orion, which many of which are diamond bearing and some of which have been shown to have some very interesting characteristics. We'll talk about that more in a moment, and that is for future development and extension of ore resource. Huge amount of work has been done on these 2 kimberlites in the past. Fortunately in the past, Shaw Gold Inc., which became Star Diamond Corporation, had 1 kimberlite to focus on, and that was the Star Kimberlite. We went all out and we did a bulk sample at the recommendation of one of our directors, Hugo, the late Hugo Dummett, and a very extensive program of core drilling to identify the size and shape and the internal structure of the kimberlite, large diameter drilling, grade determination across the kimberlite and in the vertical dimension.

14:04 And then the shaft sinking with the underground development, removing some 75,000 tons from underground and almost 11,000 carats of diamonds. And notably a 49 carat stone was the largest stone recovered from Starr. We then replicated that process at Orion South, and the largest stone from Orion South was 45.9 carats. Stones of that magnitude are unique in a bulk sampling exercise. So straight away, that's a flag that there's something special here. Lots of large diameter drilling. Unfortunately, the exercise on Orion South was curtailed by the world financial crisis in 2008 or early 2009.

14:51 And so you can see that the number of carrots that we have from Orion South is smaller. But there is a unique characteristic to Orion South is that its overburden is significantly shallower by some 30 metres than Star. It also has high-grade kimberlite in proximity to the overburden, so it's very good for quick cash flow. And it would be the target to be developed first. Attractive diamonds. We did our first valuation back in 2004, and straightaway we were at $135 a carat, and we knew we were ahead of the game. And now we see we're up at $200 a carat and more for Star, 169 for Orion South, and overall for both bodies together by a weighted percentage of their all contribution is $190 a carat. Those are 2018 numbers, and I would think those numbers would be a bit higher at the moment. The market strengthened incredibly during portions of the pandemic. It has softened recently, but the outlook in the future is always optimistic.

16:06 High value goods, you've seen this picture before, but we'll reiterate it. Obviously, the diamond in the bottom at the center is the type 2A stone of almost 12 carats, $11,000 a carat. And so very valuable diamonds once you get into diamonds of this magnitude and of this gin and tonic white color and clarity. Notably the yellow stone from Orion South, 10.53 carats, $8,000 a carat recovered, and both of those big stones were covered from large diameter drill holes. There is also a proportion of these internally flawless octahedra at both star and Orion South and type 2a stones, which we will talk about in a moment.

16:54 So the type 2a stones are very rare in most kimberlite mines in the world. There are certain unique occurrences such as Letsing, Karowi in Botswana, and Kalanen in South Africa, which have significant contributions of type 2s. Certainly In the case of Star, our proportions are approaching that of Letsing, which is supposed to have the most in the world. Certainly we're up at 26%, whereas on a world average, we're talking about 1.3%, so very low numbers of these goods, normally in kimberlite pipes. And yet we have unique abundance in both Starr and Orion South. And we'll talk more about another one in a moment.

17:43 In 2018, we did a PEA, and we had to make sure we brought our costs down. We minimized our cost, hence the bucket wheel excavators, to remove the significant overburden. And then also XRT sorting machines, which have come into fashion to ensure that we recover the big diamonds whole and do not break them. The statistics there, I think you've all seen before, 470 million tons of ore, 66 million carats, 34 year mine life, and you generate money quickly, $1.4 billion pre-production capital cost but repaid in the first 3.5 years. And so we can see our NPV at 7% of 2 billion and 19% IRR.

18:33 The general arrangement for the PEA would be 2 open pits, Orion South going first due to its shallower overburden, followed by Starr, and the waste from Starr would end up in Orion South, And the overburden would end up on that pile, which would be revegetated and made to just look like the forest. The same would apply to the processed kimberlite that is on the east side.

19:01 What is that, anybody significant? I think we can continue. Yes, I was just looking. Okay. We'll carry on. The Saskatchewan River does not affect the pit on Stone, Orion South, nor do the Kimberlites affect the pit on the Saskatchewan River. Affect the Saskatchewan River. Obviously with diamond projects they generate cash quickly and you can see here annual and cumulative cash flows from the 2018 PEA obviously going negative at the beginning when the mine is built and then generating a huge amount of money as we go on through the life of mine. And here we can see the carrot production, blue, being for Orion South, transitioning seamlessly to star, which is dominantly red and yellow. And there are some very high value areas in star, notably the star CPK, which are the yellow bars, which contain some absolutely beautiful diamonds that are getting up at $300 or perhaps even $400 a carat.

20:03 We then have done a joint venture with Rio Tinto. It started as an option to joint venture agreement. Rio Tinto wanted to prove to themselves that these great values that we had done with the underground and the large diameter drilling. They wanted to make sure that they did due diligence work to satisfy them that those numbers were good. They came up with a very innovative approach to use these trench cutter rigs to drill very large volume holes, because the kimberlite has a relatively low grade, you have to take a very big bulk sample, and this enabled such a bulk sample to be taken quickly. To develop an underground in a shaft would now be prohibitively expensive and it would take a long time.

20:51 So these holes are rectangular in shape, 3.2 metres by 1.5 metres. It's a very, very large volume and could be sunk down to 250 metres below surface, which was the design parameter of the machine, which you see on the left-hand side there. And it certainly worked, and they actually got down, I think, to 253 metres below surface, just to prove a point. And you can see the results that they got with their large diameter drilling certainly replicate what went before.

21:28 Rio Tinto was also very mindful of the fact that the diamonds have to be recovered in a state of the art way and they built a plant with 3 important components, namely an XRT sorter for the large goods so that we ensured a minimizing of diamond breakage. We had a high pressure grinding rolls crusher, again limits diamond breakage and liberates a lot of the smalls. And then the small diamonds were recovered by a very narrow range, 1 to 6 DMS. And so the DMS was extremely efficient at the recovery of the small diamonds. Hence, you can see the number of stones that they recovered from their 1,428

22:23 carats, 24,900 stones, that's because of the exceptionally good recovery they did at the lower end of the curve. And you can see the stones per tonne went right up. Very diligent work, a very good plant, which is still on site and on care and maintenance. We then, Rio took a very deep look at the project, and they went through all aspects of building a mine. They looked at the diamond quality, top colour and gem. They were early in the process to alert us to that when we were talking to them a long time ago. They were very happy with the percentages of type 2a diamonds and the large high value diamonds, which they were able to replicate in their large diameter drilling. And certainly,

23:14 the trench cutter program, here you can see the largest shown with just under 17 carats, a nice type 2a high value stone. Mining methods used, Rio Tinto has incredibly deep history of operating big open pits for the recovery of copper and iron ore. And in those pits, they use a lot of trucks and shovels, but they were able to show that our idea of bucket wheel excavators with in-pit crush and convey, using power supplied by SAS Power, keeping our carbon footprint down, was certainly the way to go. And they confirmed that. The pit scheduling, they also were in agreement that Haryan South should be mined first due to a shallow overburden, quick cash flow to get it in. They worked very hard on the pit slopes.

24:05 Because of these open pits have to be very wide, the open pit on Starr is about 3 kilometres wide, 350 metres deep. They make sure that with every degree of steepness on the pit slopes, you can save a lot of money in the removal of the overburden. They worked very hard on that, looking at buttressing, dewatering, and minimizing pit slope failure. And then they also took a very hard look at Orion North and the Taurus Kimberlite, which is to the west of that. And lo and behold, we did the internally in style, we did the type 2a diamond proportions out of the large diameter drilling macro diamond samples that we had recovered in the past.

24:52 And lo and behold, there is a central part of Orion North, namely the 147,148 kimberlites that lo and behold has a type 2a percentages that is approaching 50%. So that is a real eye opener and it obviously then sets that up for a future oil reserve extension. So very, very good confirmation of many things that we'd alluded to in the past. They did a lot of hard work to prove that. We then move on to look at, we have a 50% interest with Cantera Minerals based in Vancouver and looking at the Buffalo Hills Diamond Project in Northern Alberta, just near Red Earth.

25:43 It's access to provincial power grid and a pool of local workers. And of course, it is, if we see on this map, there is a, the green is a paved highway, the red is Forest Road, and sort of any time of the year, more or less, you can drive to virtually the K6 Kimberlite. Mark and Brian, who's not here, Mark who's here today, they walked in there from the end of the road to the K6 Kimberlite. There are a number of kimberlites that certainly have diamonds. And then there are a few of those that have very interesting diamond, notably slightly elevated type 2a goods. And as well as in K6, there is a very unusual population of beautiful yellow diamonds.

26:34 There is core drilling that has been done. There is some bulk sampling that has been done, but certainly the work initially needs to focus on augmenting those results for K6. Here you can see Mark Schimel standing in a bulk sample pit at K6, from which material was removed. That was also done from K14. So there are a number of kimberlites. They have varying grades. There is certainly opportunity that needs to be explored. So earlier this year, we did a re-examination and re-valuation as well as looking at the type 2A proportions of the diamonds from these K6, K14, K91, and 252.

27:23 And while these samples are small, originally from bulk samples and some drilling as well, We got significant initial diamond prices that exceed $100 a carat, very favourable, going up to $160 on K14, which is the most well-constrained of these others which have very small diamond. But certainly, there is an opportunity that we aim to explore. Ewan has introduced everybody. I think that's all for the technical presentation. I'll hand back to you, and thank you very much. Thank you, George.

28:11 I have been telling shareholders for quite some time that today I was gonna tell everybody where everything stands with Rio Tinto, our partner, because I was getting tired of waiting. Unfortunately, there were developments last week and our corporate counsel has gagged me and told me I'm not allowed to say anything. So what I can tell you is that Discussions are encouraging. I believe we'll have this issue with their ownership resolved shortly. And because of that, I've instructed George and his team to get cracking on the feasibility stuff. We've been doing a study for the last month or so on the diamond parcels and seeing if we can take them and correlate them with what shows up in Orion South so we can shortcut the feasibility process. So our plan is to get that percentage back that Rio owns, immediately launch a feasibility study. We hope to do that in less than 2 years.

29:03 And while we're working on that feasibility study, we're going to poke some holes in the Buffalo Hills joint venture and see if we can't come up with some big, juicy yellow diamonds. So I think the future is great for Star Diamond. And This Fort Ellicorn property will be mined for a century when the mine gets going. This is no small beer by any measure. And we appreciate all the support you've given us over the years. And you'll just watch what happens once we get the rest of that project back. We're not taking any hostages. So what I'd like to do right now is take your questions and of course if you have a question I'm going to have to repeat it into the microphone for the simulcast crowd. So please if there's any questions let me know. Perfect, no questions. I like that. Okay well listen, oh I see a question back there.

30:00 Considering the unpleasant situation for Rio Tinto for us, and I hope that you recognize that there is support despite all the bad things that have happened for Rio Tinto. I have a question that you may or may not be able to ask right now, which is will Rio Tinto remain in the picture if and when we get the project back? So the question is, will Rio Tinto remain in the picture if and when we get the project back? I can't answer that question. I know the answer, but I can't give it to you. So sorry. Give it to you. Sorry. Well, you ensure that when this deal is done, there are protections in place should be around to protect us from any more nefarious activities.

30:48 Well, I don't know about nefarious activities, but I can assure you that if and when a transaction is inked, courtesy of legal counsel, there will be protections up the yin yang, because there needs to be. The question was, are there actually parties who have expressed interest in looking at the project? Should Rio Tinto exit? The question was, are there interested parties that have expressed interest in the project, should Rio Tinto exit? All I can say is, no one has directly contacted me about that yet. Anybody else?

31:37 Well, listen, there is coffee and water over there. It's free. So that's the only free stuff you get from us for a while. So please help yourself. If you want to have a chat, I'll be around for a few more minutes, and please come on up. Thanks to everybody, and thanks to the Simulcast team.