Arctic Star Diamond Corp.'s Profile

Arctic Star Diamond Corp. (TSX: ADD) is a dynamic Canadian diamond exploration company. We are aggressively developing several projects Northern Canada and Ontario. Our primary focus is our Credit Lake property, located in the Northwest Territories ("NT").

Credit Lake: Pyrope in till - South Coppermine Train 118 KB, approx. 23 seconds at 56.6Kbps

Credit Lake, the company's flagship property, is operated solely by Arctic Star. The Company took over operations from Kennecott Canada Exploration Inc. in June 2004.

The ground is held 100% by Arctic Star, but is subject to a 51 % back-in right by Kennecott. The back-in is triggered when Arctic takes more than 200 carats from a kimberlite discovery in the area of interest. To back in, Kennecott must spend 2.5 times the Arctic expenditure on the property to date to earn-in. Once earned-in Kennecott may increase their position to 60% by taking the discovery to a positive feasibility.

The Credit Lake property is adjacent to the southwest border of the Ekati property held by BHP/Billiton, and is 32krn from the Ekati diamond mine in the Northwest Territories.

Extensive till sampling on the property (3500 to date) has revealed at least five separate diamond indicator mineral trains. Probe analyses of the indicator grains are considered positive and strongly indicate they are associated with diamond mineralization

In Summer 2006, Arctic took 826 till samples in order to hone in on the source. The samples spacing is now less than 250m in the crucial areas.

Also in 2006, the Company shot four kilometers of seismic refraction images in the depressions near the head of the indicator trains. These seismic surveys imaged some areas with depressions that had a high velocity contrast to the surrounding granite. The seismic work also successfully imaged deep overburden. In the past we may have drilled these zones based on the gravity anomaly caused by the deep till. The seismic proved to be a good discriminator here and many of these areas can now be rejected as drill targets.

In September 2006, 22 power auger holes were completed in some of the seismic depressions. Some of the holes proved negative, bringing up till barren of indicators. But other drill holes had super-abundant indicator minerals, which, after morphological study and probe analyses, are thought to be above, or extremely close to, source.

In one area dubbed "Phil's Lake", located directly at the head of the most prominent indicator train, the auger intersected an unusual black mud beneath the till. The black mud has abundant indicator minerals and is reminiscent of the black weathered material that characteristically forms on top of many of the kimberlites mined at Ekati and Diavik. It is possible that we have augered into the weathered top of a kimberlite at Phil's Lake. The only way to be certain is to diamond drill beneath this occurrence to see if there is unweathered kimberlite. This will be the prime target of our Spring 2007 drill program.

Given that we are in sight of Canada's greatest diamond mines, with geochemical proof of nearby yet-to-be-discovered diamond mineralization, Arctic is confident that a source with encouraging results will be found.


Arctic was recently approached by Diamonds North Resources Inc. to earn an option on the Siku property in the Northwest Territories.
Under the terms of the agreement, Arctic Star can earn a 50% interest in the property by:

1. Funding bonds on the claims.
2. Issuing Diamonds North 1.5 million shares of Arctic Star.
3. LSpending 2.5 million dollars on exploration over three years with the first year's expenditures at $700,000.
4. Issuing an additional 100,000 shares for each of the first five kimberlites discovered on the property.

As of September 30, 2006, Arctic Star had paid $408,215 in bonds on the claims, and in October 2006, the Company paid an additional $355,525. In February 2007, Arctic Star reimbursed $238,886 for bonds originally posted by Diamonds North. All bonds are refundable to Arctic Star upon filing of sufficient assessment work on the claims. Diamonds North will be the operator of the Siku property.

Siku - Total Magnetic Field 276 KB, approx. 52 seconds at 56.6Kbps

The property consists of approximately 455,000 acres of claims surrounding three sides (excluding the south side) of the Darby project, currently being explored by Teck Cominco Limited and Indicator Minerals Inc. Indicator and Teck Cominco recently reported the discovery of five kimberlite bodies on the Darby project, with one estimated to be as large as 11 hectares in size. Caustic fusion results returned from these yield diamondiferous kimberlite. Till samples collected from the Siku property by Diamonds North yielded indicator minerals suggesting that the Darby kimberlite field may extend onto the property. An airborne magnetic survey over the claims has been initiated for drill target delineation.

As kimberlites occur in clusters, or families, often averaging over 30 members, the chance of finding kimberlites on the Siku property is considered high.

The now historic Lac de Gras and later Slave Craton diamond rushes of the 1990s lay testament to this. But, while the first kimberlites at Lac de Gras were not economic, and it was three years before mines where found, Arctic Star is hopeful that the field contains economic kimberlites and that they occur on our optioned ground.


In May 2005 Arctic Star staked approximately 27,000 acres of ground just south of New Biggining Lake, 30krn southwest of Arctic's flagship property, Credit Lake. The New Bigg project was a result of using historic indicator mineral sample databases from both Kennecott and the government, to recognize new opportunities. In 2004 Arctic took a grid of 3km-spaced till samples. The results showed that there was a terminating indicator mineral train, containing pyrope, chrome diopside, and ilmenite. This area was subsequently staked.

New Bigg 64 KB, approx. 13 seconds at 56.6Kbps

During the summer of 2005, Arctic Star's exploration team collected 149 in fill samples from the area. The results show a zone of indicator minerals that terminate in the centre of the property. During that summer, the company flew a 150m line spaced helicopter-borne magnetometer survey. The data showed a number of kimberlite targets. These will be the subject of follow¬-up work in Spring 2007.


The Kyle Lake Project is a joint venture between Arctic Star and Metallex, with Kelex enjoying a 10% free carried interest. Arctic has an 8.5% participating interest.

The joint venture flew an extensive airborne magnetic survey in the general area of the Kyle Lake kimberlite field. Previous explorers had discovered this kimberlite field in the early to mid-1990s. The kimberlites are Proterozoic in age and lie beneath till and limestone cover that renders till sampling non-effective. Magnetics have been the main discovery tool to date. The Metallex/Arctic joint venture has discovered two kimberlites to date, the second containing a significant diamond count. A bulk sampling program is underway and partial results show enough diamonds to remain positive about the outcome.

Attawapiskat

Arctic has a 20% working interest in this property, joint ventured with Metalex Ventures Ltd. Kel-ex is subject to a 10% carried interest. Metalex is the operator of these claims, along with the adjacent Dumont claims where Arctic holds an 18% interest. The Attawapiskat property is also subject to a 2.5% net smelter royalty under certain circumstances.

These properties are adjacent to the east side of a lease held by De Beers. The De Beers leases contain a cluster of kimberlites, which include the diamondiferous Victor Pipe. De Beers plan to mine the Victor pipe and are currently seeking all the required permits and permission. Arctic and its joint venture partners have deployed relatively new auger technology to sample the basal tills in the area. The results have generated several unique indicator mineral anomalies, with no known sources of these indicator minerals up-ice.

The joint venture also flew these properties with helicopter-borne magnetics and EM, and has conducted ground surveys following up the anomalies generated from this work. The joint venture plans to continue exploration work to locate the source of indicator minerals. The chemistry of the indicator minerals is positive, so it is suspected that the source of the indicator anomalies will be diamond bearing.

Maps

Lapointe1 Target - Airborne Magnetics-Horizontal Gradient 95 KB, approx. 19 seconds at 56.6Kbps

Lapointe 1 Target - AeroTEMcoincident EM-Maganomaly immediately up-ice from prolific KIMsin till samples 184 KB, approx. 35 seconds at 56.6Kbps