TSX - SWY LAST: 0.20 +0.00 +0% Vol: 220,613 December 7, 2018

Project Overview

The 100% owned Renard Mine, Stornoway’s flagship asset, is located approximately 250 km north of the Cree community of Mistissini and 350 km north of Chibougamau in the James Bay region of north-central Québec. Construction began on July 10, 2014, following the completion of a C$946 million project financing transaction, the largest ever for a publicly listed diamond company. Now completed, the mine is the first diamond mine in Québec, and one of only six in Canada, employing approximately 500 people. The project benefits from a large and growing resource, good mining conditions, strong social acceptance, a modest environmental footprint, and the development of direct-to-mine road infrastructure.

Now in commercial production, the mine is expected to produce an average of 1.6 million carats per year over an initial 14-year mine life, representing approximately 1% of global supply. First ore was delivered to the plant approximately 10 weeks ahead of schedule on July 15, 2016. Commercial production was declared on January 1, 2017.

In an era of steadily growing diamond demand and decreasing supply, Renard is one of the best diamond mines in the world today.

Renard’s Social Licence

The Renard Project was constructed under the terms of the March 2012 Mecheshoo Agreement between Stornoway and the Cree Nation of Mistissini, the Grand Council of the Crees (Eeyou Istchee), the Cree Regional Authority, and the terms of the July 2012 Partnership Agreements with the communities of Chibougamau and Chapais.

The Mecheshoo Agreement provides training, employment and business opportunities for Crees during project construction, operation and closure, as well as setting out social, cultural and environmental principles under which the mine will be managed and respected. The Mecheshoo Agreement also includes a mechanism by which the Cree parties will financially benefit from the success of the project on a long-term basis, consistent with the mining industry’s best practices for engagement with First Nations communities.

All major permits required for the construction period were obtained. The Renard Diamond Project Mining Lease was issued by the Québec Ministère des Ressources naturelles in October 2012 and the Québec Certificate of Authorization was issued by the Ministère du Développement durable, de l’Environnement, de la Faune et des Parcs (“MDDEFP”) in December 2012. The Company received a positive Federal Environmental Assessment decision in July 2013.

Renard and the Plan Nord

An important aspect of the Renard Mine was the Route 167 extension, allowing all-season access to Renard by way of the Chibougamau and Mistissini communities and which has been constructed under the auspices of Québec’s Plan Nord. Construction began in February of 2012, and was undertaken in four segments, “A” to “D”. Under the terms of a November 2012 Framework Agreement between Stornoway and the Government of Québec, Québec completed the first 143 km of road (segments “A” and “B”) as a 70 km/hr two-lane gravel highway and Stornoway undertook the construction of a 50 km/hr single-lane mining road over the remaining 97 km (segments “C” and “D”) as the “Renard Mine Road”. The cost of the Renard Mine Road was initially estimated at $77 million, including a 15% contingency. Under the terms of the December 2012 Financing Agreement between Stornoway and Québec, Stornoway’s road costs have been funded through a credit facility provided to Stornoway bearing a 3.35% interest rate, amortized over a 15-year period. All four segments of the road were connected in September 2013, two months ahead of schedule and 10% below budget. A first for diamond mines operating in Canada, year-round road access will allow Renard to be operated with significantly reduced costs and operating risk.

Renard Mine Construction

The Renard Diamond Project was constructed under an Engineering, Procurement and Construction Management (“EPCM”) agreement between Stornoway and SNC-Lavalin Inc. SNC-Lavalin provided EPCM services for on-site utilities such as the liquefied natural gas power plant, the processing plant building, service buildings, water treatment facilities, and on-site infrastructure. The agreement with SNC-Lavalin contemplated sub-contracted services to be provided by AMEC Americas Ltd. and DRA Americas Inc. for certain specialized engineering and field support services relating to the project’s diamond processing plant and diamond recovery circuits. The total capital cost of site facilities and infrastructure within the scope of the EPCM contract was estimated at approximately C$425 million. Construction under the balance of the project’s C$811 million capital cost was managed by Stornoway’s corporate team based in Longueuil, Québec. In February 2016, management re-baselined the cost and schedule of the project, resulting in a $36 million decrease in capital cost for the project to $775 million and a 5 month improvement in the scheduled date of commercial production to December 31, 2016.




Related Press Releases

December 07, 2018 Stornoway Announces Completion of Remaining Tranches of Financing Previously Announced on October 2nd 2018
LONGUEUIL, Quebec, Dec. 07, 2018 (GLOBE NEWSWIRE) - Stornoway Diamond Corporation (TSX-SWY; the “Corporation” or “Stornoway”) is pleased to announce that the remaining tranches of financing announced on October 2, 2018 (the “Financing Package”) have now been completed or approved for completion.  These are:
A $10 million private placement (the “Private Placement”) with Ressources Québec inc. (“RQ”), acting as agent for the Government of Québec, was completed on December 7, 2018. RQ subscribed for 28,571,428 units at a price of $0.35 per unit, each unit comprising one common share of the Corporation (a “Common Share”) and one-half of a common share purchase warrant (each whole common share purchase warrant, a “Warrant”). Each whole Warrant is exercisable until December 7, 2023 for one Common Share at an exercise price of $0.455, subject to certain adjustments.   A 2-year deferral of principal payments on the Renard Mine Road Loan (the “Road Loan”) was authorized by the Québec...
November 14, 2018 Stornoway Announces CEO Succession
LONGUEUIL, Québec, Nov. 14, 2018 (GLOBE NEWSWIRE) - Stornoway Diamond Corporation (TSX-SWY; the “Corporation” or “Stornoway”) announces that, effective January 1, 2019, Mr. Matt Manson will step down as President and CEO of the Corporation and will be succeeded by Mr. Patrick Godin. Mr. Godin is currently the Corporation’s Chief Operating Officer, and has served in this role since 2010. So as to achieve an orderly transition in 2019, Mr. Manson will provide support to Mr. Godin as he assumes his new role. Ebe Sherkus, the chairman of the Stornoway Board of Directors, commented: “We would like to thank Matt for his service to Stornoway. Starting in 2005, Matt has been the driving force behind the successful acquisition, financing and development of the Renard Diamond Mine. His determination and energy have been the key ingredients in the Corporation’s transition from junior explorer to mine developer and operator. He will be ably succeeded by Pat who, as COO and a director of the...
November 14, 2018 Stornoway Reports FY2018 Third Quarter Financial Results
LONGUEUIL, Quebec, Nov. 14, 2018 (GLOBE NEWSWIRE) - Stornoway Diamond Corporation (TSX-SWY; the “Corporation” or “Stornoway”) is pleased to report financial and operating results for the quarter ended September 30, 2018.
QUARTER ENDED SEPTEMBER 30, 2018 HIGHLIGHT S: (All quoted figures in CAD$, unless otherwise noted) For the three months ended September 30, 2018, Stornoway reported a net loss of $37.6 million ($0.05 per share on a basic and fully diluted basis). Adjusted net loss1 for the quarter was $31.7 million. During the quarter, two tender sales totalling 184,620 carats were completed for gross proceeds2 of $24.8 million3 at an average price of US$103 per carat ($134 per carat3). Revenue recognized was $29.4 million, derived from the sale of the above mentioned run of mine production and the sale of 21,367 carats of incidental production in one out of tender contract sale at an average price of US$13 per carat ($17 per carat1,[4]). Third quarter diamond sales represent...