Project Overview

The 100% owned Renard Diamond Project, 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. Once complete, the project will be the first diamond mine in Québec, and one of only six in Canada, and will employ 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.

Once in full production, the project is expected to produce an average of 1.6 million carats per year over an initial 14-year mine life, representing approximately 2% of global supply. First ore is scheduled to be delivered to the plant September 2016, with commercial production scheduled for December 31, 2016.

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

Project History

The Renard kimberlite pipes, Renard 1 through 10, were first discovered in 2001 following five years of grassroots exploration over an area of more than 400,000 square kilometres of the eastern Archean Superior craton in northern Québec. The nearby Lynx/Hibou system of kimberlite dykes was discovered in 2004. Initial exploration was conducted under a joint venture between Ashton Mining of Canada Inc. and SOQUEM Inc. Stornoway acquired Ashton in January 2007 and in April 2011, acquired the remaining 50% in the project held by DIAQUEM Inc., a subsidiary of SOQUEM.

Between 2001 and 2008, the project saw successive programs of drilling and bulk sampling culminating in the publication of its first NI 43-101 compliant Mineral Resource and Preliminary Economic Assessment in December 2008. Successive drilling and sampling programs have seen the project grow since this time. A full Feasibility Study was published in November 2011, and subsequently updated in an Optimization Study published in January 2013. On March 30, 2016, the company published a revised mine plan and technical report. The Updated Mine Plan describes a combined open pit and underground mining operation, with an initial 14-year mine life based on a 22.3 million carat Mineral Reserve, with average annual production of 1.8 million carats in the first 10 years of operation and 1.6 million for the reserve life with a 59% cash operating margin after the effects of the diamond stream. The project’s Long-Term Business Plan contemplates the mining of the project’s substantial Inferred Mineral Resources over a greatly extended mine life, and forms the basis for the project’s Environmental and Social Impact Assessment [insert link] and permitting.

Download the NI 42-101 Updated Renard Diamond Project Mine Plan and Mineral Reserve Estimate March 30, 2016

Download the NI 43-101 Optimized Feasibility Study Technical Report filed on SEDAR March 27, 2013.

Link to the October 2013 LNG Feasibility Study Press Release

Renard’s Social Licence

The Renard Project is being 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 project 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 construction to proceed have been 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.

Download the Renard Environmental and Social Impact Assessment filed to Regulators on December 2011.

Renard and the Plan Nord

An important aspect of the Renard Project is the Route 167 extension which allows 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 developed and operated with significantly reduced costs and operating risk.

Renard’s Diamonds

More than 9,000 carats of diamonds (greater than 1 mm in size) have been recovered from the Renard kimberlite pipes and Lynx/Hibou kimberlite dykes in the various sampling campaigns since 2001. Overall, the Renard diamond population exhibits a coarse size distribution with a high proportion of large white gems, particularly in sizes above 2 carats (picture of diamonds recovered from bulk sampling 5 carats or larger). Based on percentage by weight, 99% of the stones are gem/near-gem quality with just 1% industrial quality boart. The most recent valuation of Renard’s diamond samples, conducted in March 2014 by WWW International Diamond Consultants Ltd., indicated a weighted average value of US$190/carat for the three kimberlites in the project’s Mineral Reserve, and US$197/carat for Renard 2. For the Updated Mine Plan, Stornoway has revised down its diamond price estimates to reflect the current market, reducing average diamond prices by 19% to US$155/carat for the four kimberlites in the Mineral Reserve and US$160/carat for Renard 2.

Renard has the potential to be a producer of “Special” large diamonds. The size distribution of samples collected at Renard 2 to date suggests the potential to recover approximately three to six stones between 50 carats and 100 carats in size, and one to two stones greater than 100 carats in size, every 100,000 carats (representing two to three weeks of output at full production). While the presence and quality of such stones can never be assured at any diamond project, the Renard diamond plant will incorporate a “Large Diamond Recovery” capacity to ensure the potential recovery of diamonds up to 45 mm in diameter (equivalent to a 600 carat round octahedral stone). The project’s revenue forecast currently includes only nominal value for diamonds above 10.8 carats in size.

Renard Mine Construction

The Renard Diamond Project is being constructed under an Engineering, Procurement and Construction Management (“EPCM”) agreement between Stornoway and SNC-Lavalin Inc. SNC-Lavalin will provide 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 contemplates 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 is being managed by Stornoway’s corporate team based in Longueuil, Québec. In February, 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 22, 2016 Stornoway Announces Commercial Production Achieved at Renard
Stornoway Diamond Corporation (TSX-SWY; the “Corporation” or “Stornoway”) is pleased to announce that Commercial Production has been achieved at the Renard Diamond Mine. Commercial Production at Renard is defined as an average processing rate of 60% of plant name-plate capacity over a 30 day period. This was achieved on December 3, 2016, with an average processing rate of 4,120 tonnes per day over the preceding 30 day period compared to a name-plate capacity of 6,000 tonnes per day. Pursuant to the terms of Stornoway’s financing agreements, Stornoway will formally declare commercial production on the first day of the month following the month in which it is achieved, which is January 1, 2017. The company expects to continue the ramp-up of the process plant to full production over the next two quarters. Matt Manson, President and CEO of Stornoway, stated: “I would like to take this opportunity to thank the entire Renard team on achieving this important milestone well within schedule...
November 23, 2016 Stornoway Announces Completion Of First Diamond Sale
Stornoway Diamond Corporation (TSX-SWY; the “Corporation” or “Stornoway”) is pleased to announce the completion of the first sale of Renard diamonds held between the 14 th and 23 rd of November in Antwerp Belgium. In total, 38,913 carats were sold at an average price of US$195 per carat, for proceeds of US$7.6 million (C$10.2 million1). Matt Manson, President and CEO of Stornoway, commented “The diamonds sold in this first sale represent a portion of our production recovered during the initial commissioning and ramp-up of the Renard project during August and September. We saw strong interest in our product assortment, with 153 diamantaires attending the tender. Pricing met or was close to our expectations on most items. Recent events in India surrounding demonetization has impacted pricing and demand for certain smaller and lower quality items and, as a result, a quantity of these were withdrawn from the sale. These will be sold at a later date. Because of this, and because of a...
November 14, 2016 Stornoway Announces FY 2016 Third Quarter Results
Stornoway Diamond Corporation (TSX-SWY; the “Corporation” or “Stornoway”) announced today its results for the quarter ended September 30, 2016. Quarter ended September 30, 2016 Highlights (All quoted figures in CAD$) The Renard Diamond Mine was officially opened on October 19, 2016, at a ceremony held in the presence of Quebec’s Minister of Energy and Natural Resources and Minister responsible for the Plan Nord, as well as current and former staff members, project stakeholders and local community members. Stornoway’s first sale of Renard diamonds will be held in Antwerp, Belgium starting on November 14, 2016. This is two months earlier than previously anticipated. Ore processing commenced on July 15, 2016. Initial production is based on ore sourced directly from the Renard 2-3 open pits and supplemented from stockpiled ore as required. During the quarter, 91,010 tonnes were processed with attributable production of 111,556 carats. Construction progress stood at 99% compared to the...