Mr. Patrick Power reports

FURTHER EVIDENCE OF A HIGH PERCENTAGE OF DEEP-SOURCED, LOW NITROGEN DIAMONDS WITH ULTRA-HIGH PRESSURE MINERAL INCLUSIONS, A KNOWN ASSOCIATION WITH LARGE HIGH-VALUE GEMS. SEQUOIA KIMBERLITE, NT

Arctic Star Exploration Corp. has received results from research carried out at the University of Alberta by Dr. Luisa de Carvalho under the guidance of Thomas Stachel and Graham Pearson. The interpretation of the results are solely the opinion of the company; however, the authors agree it is a possible indication that larger gemstones will be present.

The diamonds recovered by caustic fusion from several drill holes were transferred to the university from the SRC laboratories in Saskatoon under an unbroken chain of custody.

Seventy-three of these diamonds were selected for further study based on their size (greater than 700 microm; n equals 51) or the presence of visible mineral inclusions (n equals 22). The diamonds were analyzed for their nitrogen content and aggregation state and for their C and N isotope compositions. Mineral inclusions from 224 diamonds were also analyzed.

Of the studied diamonds, 27 per cent are fragments, 26 per cent are aggregates/twins, 18 per cent are octahedra, 18 per cent are rounded dodecahedra/resorbed and 11 per cent are macles.

The colours of monocrystalline diamonds are mainly white (43 per cent), pale yellow (48 per cent) or brown (9 per cent). Six of the diamonds are fibrous, highly resorbed and black/dark grey (n equals four), white (n equals one) and yellow (n equals one) in colour.

Study of the mineral inclusions shows that Sequoia kimberlites tapped both lithospheric and sublithospheric mantle sources of diamonds beneath the Slave craton, with peridotite being the principal diamond-bearing substrate. Five of the diamonds belong to the sublithospheric suite based on the presence of ferropericlase plus or minus olivine, breyite, or larnite plus or minus olivine, mineral associations that only form under intense pressure. The mineral inclusions were analyzed by Raman spectroscopy. All of the diamonds classified as sublithospheric are either Type 1aB or 2a.

For the complete parcel of Sequoia diamonds studied, the analyses have revealed that 37 per cent of the diamonds are sublithospheric in source, 26 per cent are Type 2a (no detectable nitrogen) and 11 per cent are Type 1aB.

Buddy Doyle, vice-president, exploration, of Arctic Star, commented: "Recent work by the diamond research community has revealed that many of the larger-than-10-carat diamonds of exceptional quality found around the world are deeply sourced (hundreds of kilometres), nitrogen-free stones, classed as Type 2a. When compared to the total diamonds mined and studied globally, they are even rarer, making up only a few per cent of the total. Also present is a significant population of Type 1aB low-nitrogen diamonds, which are also relatively rare and sourced from great depths. Studying inclusions in these diamonds reveals minerals that only form under ultrahigh pressure, confirming they are coming from great depths."

Mr. Doyle continued: "There are also further layers of evidence that hint that the Sequoia kimberlite complex may harbour large exceptional diamonds. These are: (1) the diamonds liberated by the caustic fusion from the drill core to date demonstrate a population size frequency curve that has a relatively low gradient, meaning the ratio of larger stones to smaller stones is higher than the average. If this relationship holds strong as we increase the sample size, it predicts that larger stones will be encountered.

"Due to their exceptional value, even getting one 10-carat special stone per 100,000 tonnes of kimberlite can significantly affect mine economics. Arctic plans to take a bulk sample of approximately 3,000 tonnes, timed for winter 2026. Even at this size of sample, some luck would have to be involved to see such large stones. This size sample, limited by cost and logistics, is designed to give a good first estimate of the average value of the run-of-mine stones. If the economics from this sample prove robust on the run-of-mine stones alone, then every time a larger stone reports, it would be welcome bonus. The size distribution of the diamonds from the proposed bulk sample, and any variation in the quality of the stones compared from different size classes, will allow us to gain a greater understanding.

"Sequoia is part of the large Lac de Gras kimberlite cluster (Central Slave group), a geographic grouping of over 200 separate kimberlites that all erupted in a 20-million-year time period, centred around 55 million years before present. Of these, about a dozen are mined or considered for mining, and there is public information on their economics. They vary in their realized average run-of-mine aggregate diamond values, with prices ranging from $70 (U.S.) per ct to $420 (U.S.) per ct (2014 prices). Assuming the Sequoia kimberlite complex has an average grade of circa 0.3 ct per tonne (estimated by projecting the size distribution of the caustic fusion recovered small stones into commercial stone space, an estimate that will be refined and become more certain as we take more samples). Sequoia would need to demonstrate it contains diamonds averaging greater than $200 (U.S.) per ct in value to trigger a feasibility study. There are kimberlites in the cluster with these grades and valuations, so it is not unreasonable to consider Sequoia may have this potential.

"The next planned step is to complete the first-pass delineation of the Sequoia kimberlite complex with HQ size drilling to further understand the diamond distribution and geology. Approximately 15 200-metre holes are planned for spring 2025. The delineation work so far (eight holes) has revealed several different kimberlite varieties, each with the potential to have different diamond populations. Completion of this work will help in the design of the bulk sample.

"Of note, in a previous news release, Arctic reported a sample containing 51 per cent Type 2a diamonds, a higher percentage than reported here. This may be due to a number of reasons. First, the original study looked at diamonds down to 0.3 millimetre in size, and second, only looked at diamonds from the first two holes. This study looked at material from all drill holes and only stones greater than 0.7 mm. Third, the first two holes had a different mix of kimberlites to the other drill holes. There might be a kimberlite type that has an enhanced Type 2a population. This requires further work to gain understanding."

Mr. Doyle concluded: "Diamonds are the ultimate sampling challenge in the mining industry. Taking a bulk sample is an expensive hurdle; however, once that hurdle is crossed, the pathway to production is usually less capital intensive than that of other commodities, especially if we can leverage the existing mining infrastructure in this world-class diamond district."

Dr. Carvalho will present the work reported here at the Quadrennial Kimberlite Conference, being held in Yellowknife, this July, 2024, at which core from the Sequoia kimberlite complex will be on display.

Arctic Star thanks the University of Alberta for this interesting contribution, and looks forward to continuing studies and further collaboration.

About Arctic Star Exploration Corp.

Arctic Star is predominantly a diamond explorer, recently discovering five new kimberlites in the prolific Lac De Gras kimberlite field that supports two multibillion-dollar kimberlite mining complexes. The company also has a 958-hectare exploration permit containing several diamond-bearing kimberlites on its Timantti project, Kuusamo, Finland. The company continues to look for appropriate diamond opportunities elsewhere.

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