TSX - SWY LAST: 0.43 -0.01 -2.27% Vol: 130,957 June 18, 2018

CAUSTIC FUSION SAMPLING

The caustic fusion technique, more properly known as caustic dissolution, uses chemical processing to provide total liberation of all diamonds within a given sample in order that an accurate diamond distribution can be determined. Caustic dissolution processes are usually applied to recover microdiamonds from relatively small volume samples (tens to hundreds of kilograms). Rock samples are loaded into large steel pots and caustic soda is added to dissolve the mineral matrix hosting the diamonds. Dissolution takes place over an extended period of time in temperature-controlled kilns. Once the reaction is complete, the residue is cooled and poured through stainless steel wire mesh screens at the required size (usually 0.106mm square mesh and above) to avoid loss of small diamonds. Depending on the size of the residue, further standard dissolution may be required. In cases where abundant oxides remain in the residue, a variety of other chemicals may be used to reduce the size of the concentrate, without harming the diamonds. Residues are then observed under microscopes by trained personnel, and the diamonds recovered, counted, sized and weighed.

To assure the integrity of the process, a chain of custody is established between the customer and the laboratory. Customer samples are processed in a controlled environment to ensure that confidentiality is maintained at all times. All samples are handled with due diligence during processing stages, according to previously defined protocols. Quality control grains are added to each aliquot undergoing the caustic dissolution process to monitor recovery.

DENSE MEDIA SEPARATION (DMS)

Dense media separation is a standard industry process for the liberation and extraction of macrodiamonds from large volumes of sample material (commonly tens to thousands of tonnes). Rock samples are progressively crushed and the disaggregated material passed over a series of size sorting screens before being mixed with a high density slurry comprising ferrosilicon and water. A high-pressure centrifuge or “cyclone” is used to create a density gradient which is used to split the heavy minerals, including diamonds, from the lighter waste rock. The heavy mineral concentrate is removed from the DMS plant and stored under secure conditions until the diamonds can be extracted. Waste material is recycled through the plant and re crushed to liberate finer and finer diamonds. The minimum and maximum diamond size that can be recovered by the process is determined by the plant configuration, but commonly targets commercially saleable diamonds of +1 DTC screen size.

Diamonds are recovered from the heavy mineral concentrate under security control via a recovery process that includes a sizing circuit, an X-ray flow-sorting machine, grease table and magnetic separation equipment as well as heavy liquids.

X-RAY SORTERS

X-ray diamond sorting equipment operate based on the tendency of most diamonds to fluoresce when exposed to X-rays. In the basic X-ray sorter design, heavy mineral concentrate (a mix of diamonds and non-diamond particles in either a wet or dry state) is fed into the unit as either a single layer of similarly sized particles or a single particle stream. This flow of materials is exposed to X-rays. When a diamond in the concentrate fluoresces, the resulting light is detected by a photo multiplier, amplified, and converted into an electrical signal. This signal is then transmitted to an ejection gate which mechanically separates the diamond from other material and either diverts it into a locked canister or passes it along for further upgrading. Although many factors influence the efficiency of diamond recovery, X-ray sorters typically recover more than 98% of diamonds present in a heavy mineral concentrate. Economic considerations may require the use of additional extraction techniques such as grease tables.

GREASE TABLE

Grease tables can be used as a primary recovery technique (i.e. the first and only process used to capture diamonds) or as part of a final recovery circuit (i.e. catching diamonds not removed by the X-ray sorter). Diamonds are hydrophobic (repel water) and readily adhere to grease or oil. A grease table uses these physical properties to separate diamonds from crushed kimberlite, heavy mineral concentrates, tailings, alluvial gravels or other materials. Diamond bearing materials are flushed over a vibrating table covered with a layer of specially formulated grease. While waste rock fragments and other minerals are washed away by flowing water and sprayers, diamonds resist being wetted and adhere to the greased surface instead. The diamond-laden grease is scraped off the table, boiled in water to remove the grease and the resultant screened particles cleaned using a solvent degreasing machine. There is always a population of non-diamonds that must be removed from the cleaned residue.

OBSERVATION LABORATORY

Diamond rich concentrates generated by a DMS plant, X-ray sorting, grease table or other process (magnetic separation, heavy liquids, etc) are then visually examined in a separate laboratory area specifically designated for diamond recovery. This process, commonly called hand sorting, is usually conducted in a secure setting with independent security monitoring, often using glove boxes, mechanization or other indirect handling. The process may involve removing diamonds from a concentrate, or removing non-diamonds from a concentrate, depending on the previous upgrading steps that have been applied.

Diamonds recovered at this stage are usually sized, measured, weighed, characterized and recorded in the observing laboratory. A cleaning process may be applied prior to valuation. Other studies, such as breakage analyses, may also be performed prior to sale.

QUALITY ASSURANCE AND QUALITY CONTROL

Stornoway utilizes industry-standard quality control (“QC”), quality assurance (“QA”) and “chain of custody” procedures during our diamond recovery activities, including the field collection, shipping, handling and processing. QA/QC and security programs are also maintained in the diamond recovery circuits. They include testing and calibration of all equipment using standards and blanks, audits of reject material, archived record-keeping of all procedures and data, and corrective measures when a procedure that does not conform to standards. QA/QC testing also includes blind spiking of samples and regular testing and calibration of all equipment using reference standards and blank samples.