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PRELIMINARY ECONOMIC ASSESSMENT OF THE STAR – ORION SOUTH DIAMOND PROJECT, FORT A LA CORNE, SASKATCHEWAN, LATITUDE 53º 15" N LONGITUDE 104º 48" W Respectfully submitted to: Star Diamond Corporation Effective Date: April 16, 2018 Signing Date: May 30, 2018 Prepared By: Daniel Leroux, M.Sc., P.Geo. W.D. Roy, M.Sc.A., P.Eng. Lehman van Niekerk, P.Eng. Geoff Wilkie, P.Eng. Leon McGarry, P.Geo. Minerals Services 10 boul. de la Seigneurie Est, Suite 203, Blainville, Québec Canada, J7C3V5 t (450) 433 1050 f (450) 433 1048 www.geostat.com www.sgs.com SGS Canada Inc. Member of SGS Group (SGS SA) NI 43-101 Technical Report – The Star Orion South Diamond Project – Fort à la Corne Area – Saskatchewan Page ii Disclaimer: This document is issued by the SGS Canada Inc. under its General Conditions of Service accessible at http://www.sgs.com/terms_and_conditions.htm . Attention is drawn to the limitation of liability, indemnification and jurisdiction issues defined there in. Any holder of this document is advised that information contained herein reflects the Company’s findings at the time of its intervention only and within the limits of the Client’s instructions, if any. The Company’s sole responsibility is to its Client and this document does not exonerate parties to a transaction from exercising their rights and obligations under the transaction documents. Any unauthorized alteration, forgery or falsification of the content or appearance of this document is unlawful and offenders may be prosecuted to the fullest extent of the law SGS Canada Inc. NI 43-101 Technical Report – The Star Orion South Diamond Project – Fort à la Corne Area – Saskatchewan Page iii Date and Signatures This report has an effective date of April 16, 2018. Prepared by: “Signed and Sealed” ____________________________ Daniel Leroux, M.Sc. P.Geo. Date: May 30, 2018 SGS Geostat “Signed and Sealed” _____________________________ W.D. Roy, M.Sc.A., P.Eng Date: May 30, 2018 SGS Geostat “Signed and Sealed” _____________________________ Lehman van Niekerk P.Eng Date: May 30, 2018 DRA “Signed and Sealed” _____________________________ Geoff Wilkie, P.Eng Date: May 30, 2018 Engcomp “Signed and Sealed” _____________________________ Leon McGarry, P.Geo. Date: May 30, 2018 CSA Global SGS Canada Inc. NI 43-101 Technical Report – The Star Orion South Diamond Project – Fort à la Corne Area – Saskatchewan Page iv Table of Contents 1. Executive Summary .......................................................................................................................... 1 2. Introduction .................................................................................................................................... 14 2.1 Terms of Reference ................................................................................................................. 14 2.2 Site Inspections ....................................................................................................................... 15 2.3 Sources Of Information ............................................................................................................ 15 2.4 Currency, Units, Abbreviations and Definitions ......................................................................... 17 3. Reliance on Other Experts .............................................................................................................. 20 3.1 Mineral Tenure ........................................................................................................................ 20 3.2 Surface Rights, Access And Permitting .................................................................................... 20 3.3 Diamond Valuations ................................................................................................................. 20 3.4 Geotechnical Investigations ..................................................................................................... 21 4. Property Description and Location .................................................................................................. 22 4.1 Claims, Title, And Tenure ........................................................................................................ 22 SDC Exploration Licenses ................................................................................................ 22 Surface Rights and Leases ............................................................................................... 29 Ownership and Various Joint Ventures ............................................................................. 30 4.1.3.1 Consolidation of the Fort à la Corne Mineral Properties (including the Project) and Option to Joint Venture in 2017 ................................................................................................................................................ 30 Permits and Approvals ...................................................................................................... 31 4.2 Environmental and Other Liabilities .......................................................................................... 31 5. Accessibility, Climate, Local Resources, Infrastructure and Physiography ....................................... 33 5.1 Accessibility ............................................................................................................................. 33 5.2 Physiography And Climate ....................................................................................................... 33 5.3 Local and Regional Infrastructure ............................................................................................ 33 Star Property Description .................................................................................................. 34 SGS Canada Inc. NI 43-101 Technical Report – The Star Orion South Diamond Project – Fort à la Corne Area – Saskatchewan Page v Orion South Property Description ...................................................................................... 34 6. History ............................................................................................................................................ 35 7. Geological Setting and Mineralization ............................................................................................. 39 7.1 Property Geology - Falc Area ................................................................................................... 41 7.2 Star Kimberlite Geology And Mineralization ............................................................................. 43 Cantuar Kimberlite (“CPK”) ............................................................................................... 43 Pense Kimberlite (“PPK”) .................................................................................................. 46 Early Joli Fou Kimberlite (“EJF”) ....................................................................................... 46 Mid Joli Fou Kimberlite (“MJF”) ......................................................................................... 48 Late Joli Fou Kimberlite (“LIF”) .......................................................................................... 48 Upper Kimberlitic Sediments/Reworked Volcaniclastic Units (“UKS/UKRVU”) .................... 49 7.3 Orion South Kimberlite Geology And Mineralization ................................................................. 49 Cantuar Kimberlite (“CPK”) ............................................................................................... 50 Early Pense (“P3”) Kimberlite ............................................................................................ 51 Pense Kimberlite (“PENSE”) ............................................................................................. 51 Early Joli Fou Kimberlite (“EJF”) ....................................................................................... 52 Late Joli Fou Kimberlite (“LJF”) ......................................................................................... 56 Viking Kimberlite (“VPK”) .................................................................................................. 57 Upper Kimberlitic Sediments (“UKS/KSST”) ...................................................................... 57 7.4 Geological Model ..................................................................................................................... 58 Star Geological Model....................................................................................................... 58 Orion South Geological Model .......................................................................................... 59 8. Deposit Types ................................................................................................................................ 60 8.1 Kimberlite Hosted Diamond Deposits ....................................................................................... 60 8.2 Fort À La Corne Kimberlite Model ............................................................................................ 61 9. Exploration ..................................................................................................................................... 62 SGS Canada Inc. NI 43-101 Technical Report – The Star Orion South Diamond Project – Fort à la Corne Area – Saskatchewan Page vi 9.1 Star Kimberlite Exploration....................................................................................................... 62 9.2 Orion South Kimberlite Exploration .........................................................................................