Forward Looking Statements – Risk Factors

The securities of Debut Diamonds Inc. (Debut) are highly speculative due to the nature of Debut’s business, its present stage of development and the nature of the mineral exploration and development industry generally. The risk factors that a reasonable investor would consider relevant to an investment in the Corporation’s securities are described below.

Risks Inherent to Mining Exploration:

Debut is engaged in the business of acquiring and exploring mineral properties in the hope of locating economic deposits of minerals.  Debut’s property interests are in the exploration stage only and are without a known body of commercial ore.  Accordingly, there is little likelihood that Debut will realize any profits in the short to medium term.  Any profitability in the future from Debut’s business will be dependent upon locating an economic deposit of minerals.  However, there can be no assurance, even if an economic deposit of minerals is located, that it can be commercially mined.

Capital Needs:

The exploration, development, mining and processing of Debut’s properties will require substantial additional financing.  The only current sources of future funds available to Debut are the sale of additional equity capital and the borrowings of funds.  There is no assurance that such funding will be available to Debut or that it will be obtained on terms favourable to Debut or will provide Debut with sufficient funds to meet its objectives, which may adversely affect Debut’s business and financial position.  Failure to obtain sufficient financing may result in delaying or indefinite postponement of exploration, development or production on any or all of Debut’s properties or even a loss of property interests.

Additional Funds for Future Exploration and Development, Dilution:

As a mineral exploration company, Debut does not generate cash flow from its activities and it must rely primarily on issuances of its securities or the borrowing of funds to finance its operations. The exploration and development of Debut’s properties will require substantial funds beyond those it has and there is no assurance that such additional funds will be available to Debut on commercially reasonable terms or in sufficient amounts to allow Debut to continue to pursue its objectives.  The inability of Debut to raise further funds, whether through additional equity issuances or by other means, could result in delays or the indefinite postponement of planned exploration, development or production activities or, in certain circumstances, the loss of some or all of its property interests or cessation of all exploration, development and mining activities. The occurrence of any of these events could have a material adverse effect upon Debut and the value of its securities.  If additional financing is raised by the issuance of additional shares from the treasury of Debut, holders of shares previously issued by Debut will suffer immediate dilution and Debut may experience a change of control.

Commodity Prices:

The market price of Debut’s common shares, its financial results and its exploration, development and mining activities may in the future be significantly adversely affected by declines in the price of rough and polished diamonds.

Aboriginal Land Claims and Aboriginal Rights:

Debut’s properties and mineral exploration claims are presently and may, in the future, be the subject of aboriginal peoples’ land claims or aboriginal rights claims. The legal basis of an aboriginal land claim and aboriginal rights is a matter of considerable legal complexity and the impact of the assertion of such a claim, or the possible effect of a settlement of such claim upon Debut cannot be predicted with any degree of certainty at this time. In addition, no assurance can be given that any recognition of aboriginal rights or claims whether by way of a negotiated settlement or by judicial pronouncement (or through the grant of an injunction prohibiting mineral exploration or mining activity pending resolution of any such claim) would not delay or even prevent Debut’s exploration, development or mining activities.

Land Title & Joint Ventures:

Although Debut has taken reasonable measures to ensure proper title to its properties, there is no guarantee that title to any of its properties will not be challenged or impugned.  Third parties, including, without limitation, aboriginal peoples, may have valid claims against the Debut properties. Debut may hold mineral properties with joint venture partners and although Debut has taken reasonable measures to ensure proper title of the properties owned or operated by joint venture partners and/or other participating optionees, there is no guarantee that title to any of these properties will not be challenged or impugned by third parties. Joint venture agreements have inherent risks including, without limitation, lack of operatorship, requirements to meet cash calls, dilution of participating interests if cash calls are not met and possible loss of the entire interest, dependence on other joint venture partners for operations or for cash contributions, disputes over interpretations and other conflicts.

Environmental Liabilities:

Pre-existing environmental liabilities may exist on the properties in which Debut currently holds an interest or on properties that may be subsequently acquired by Debut which are unknown to Debut and which have been caused by previous or existing owners or operators of the properties.  Exploration activities may also have environmental impacts and may cause environmental liabilities.  In any such events, Debut may be required to remediate these properties and the costs of such work could have an adverse effect upon Debut and the value of its securities.

Regulation and Environmental Requirements:

The activities of Debut require permits from various governmental authorities and are governed by laws and regulations governing prospecting, development, mining, production, exports, taxes, labour standards, occupational health, environmental protection and other matters.  Increased costs and delays may result of the need to comply with applicable laws and regulations.  If Debut is unable to obtain or renew licences, approvals and permits, it may be curtailed or prohibited from proceeding with exploration or development activities.

Regulatory risks:

All phases of Debut’s operations are and will be subject to a significant degree of governmental regulation, affecting areas such as exploration, property development, export, mining, production, taxes, labour standards, occupational health, waste disposal, land use, environmental protection, mine safety and other matters. Changes in existing and proposed laws and regulations could have a material adverse effect on Debut’s exploration business.

Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions or other sanctions that could result in the cessation or curtailment of Debut’s operations or require the undertaking of corrective measures such as the installation of additional equipment or other remedial actions. In addition, Debut may be required to compensate those suffering loss or damage by reason of the breach of applicable law and may have civil or criminal fines or penalties imposed upon it in connection therewith.

Competition:

The mineral exploration and mining industry is intensely competitive in all of its phases. Debut faces strong competition from mineral exploration and other mining enterprises, some of which possess greater financial resources, experience and technical facilities than those of Debut. Consequently, Debut’s revenues, operations and financial condition could be materially adversely affected.

Surface Access Rights:

Debut does not have any surface access rights to the lands comprising Debut’s properties and mineral exploration claims, and will be required to obtain all necessary permits prior to carrying out any exploration activities. Accordingly, Debut may be unable to access its properties and mineral exploration claims to carry out the exploration work described in this Listing Statement.

Ontario Diamond Industry:

The diamond industry is relatively new to Canada, with the first commercial production only occurring within the last 15 years, and even newer to Ontario, with the first and only Ontario diamond mine opening in 2008.  Diamond mines are few and are costly to discover and develop.  There can be no assurance that additional commercially viable diamond mines will be discovered or developed in Ontario or in Canada and, more particularly, that Debut will discover or develop a commercially viable mine on any of its properties.

Uncertainty in the Calculation of Deposits and Diamond Recovery:

There are numerous uncertainties inherent in exploring for and assessing and evaluating mineral deposits, many of which are beyond Debut’s control. Although the exploratory and sampling results disclosed herein have been undertaken by qualified experts, these figures in and of themselves can provide no assurance that an economic mineral deposit will be discovered on Debut’ properties. In addition, there can be no assurance that diamond recoveries in small scale laboratory tests will be duplicated in large tests, under on-site conditions or during production. Further, even in the event that mineral deposits are identified on Debut’s properties, there can be no assurance that they will ever be capable of being commercialized.

Foreign Exchange Risk:

The diamond market is an international market with general pricing determined by large market participants in global diamond trading centres and exchanges, which prices may be denominated in foreign currency.  If diamonds are produced from any of Debut’s properties, the Company may enter into spot and forward agreements for the sale of its production denominated in foreign currency and become exposed to foreign currency fluctuations relative to the Canadian dollar which may affect its financial results.

Investment Returns:

Debut has never paid a dividend nor made a distribution on any of its securities. Further, Debut may never achieve a level of profitability that would permit payment of dividends or making other forms of distribution to securityholders. In any event, given the stage of Debut’s development, it will likely be a long period of time before Debut could be in a position to make dividends or distributions to its investors. Accordingly, an investment in any of the common shares is only appropriate for persons with no expectation of return on such investment over the near or medium term and who understand fully the speculative nature of such investment. The payment of any future dividends by Debut will be at the sole discretion of its Board of Directors. In this regard, Debut currently intends to retain all available funds to finance the expansion of its business and does not anticipate paying dividends in the foreseeable future.

Management and Key Personal:

Successfully exploring for, developing and commercializing mineral deposits depends on a number of factors, not the least of which is the technical skill of the personnel involved. Debut’s success will be, in part, dependent on the performance of its key managers and consultants. Failure to retain the managers and consultants, or to attract or retain additional key personnel, with the necessary skills and experience could have a materially adverse impact upon Debut’s growth and profitability. Debut does not carry key person insurance.

Conflict of Interest Risk:

Both KWG and Debut have common directors and potential conflicts of interest can arise between KWG and Debut which may not necessarily be able to be resolved through arm’s length negotiations but will only be resolved by the KWG and Debut directors exercising judgment consistent with their fiduciary responsibility. In addition to any possible KWG and Debut conflict of interest, the directors of Debut are directors and/or officers of other companies or may become directors and/or officers of other companies and any potential conflicts of interests may only be resolved by the exercise of their fiduciary responsibility.  The following individuals are directors and/or officers of both KWG and Debut:

Frank C. Smeenk, President, CEO & Director of KWG and Managing Director of Debut

Bruce D. Reid and Douglas M. Flett, Directors of KWG and Debut

Luce L. Saint-Pierre, Secretary of KWG and a Director of Debut

Thomas E.Masters, CFO of both KWG and Debut.

Uninsured Risks:

The business of Debut is subject to a number of risks and hazards which are not insured due to the cost and availability of such insurance, including but not limited to, adverse environmental conditions, industrial accidents, labour disputes, unusual or unexpected geological conditions, ground or slope failures, cave-ins and natural phenomena such as inclement weather conditions, forest fires, floods and earthquakes. Such occurrences could result in damage to mineral properties or production facilities, personal injury or death, environmental damage to losses and possible legal liability.

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