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 11-year mine life, representing approximately 2% of global supply. First ore is scheduled to be delivered to the plant in the second half of 2016, with commercial production scheduled for the second quarter of 2017.

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. The Optimization Study describes a combined open pit and underground mining operation, with an initial 11-year mine life based on an 18m carat Mineral Reserve and average annual production of 1.6m carats, with a 67% operating margin. 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. A study into the feasibility of utilizing liquefied natural gas (“LNG”) for power generation at Renard was released in October 2013.

The project currently under construction at Renard represents that described in the January 2013 Optimization Study and October 2013 LNG Feasibility Study.

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, which represents 82% of production in the first 11 years.

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 is 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.




Related Press Releases

October 01, 2015 Stornoway Announces Funding of Second Tranche of Stream Financing
Stornoway Diamond Corporation (TSX:SWY) the "Corporation" or "Stornoway") is pleased to announce that it has successfully completed the drawdown of the second US$80m tranche of diamond stream funding from Orion Mine Finance ("Orion"), the Caisse de dépôt et placement du Québec ("CDPQ") and Blackstone Tactical Opportunities ("Blackstone"). Under Stornoway's C$946 million1 project financing transaction, which closed on July 8th, 2014, a total of US$250 million in upfront stream payments were committed by Orion and the CDPQ to fund in three tranches, scheduled for March 2015, September 2015 and March 2016. On April 28th, 2015, Blackstone announced that it had acquired a minority position in the Renard Diamond Stream from Orion by way of a secondary market transaction. Drawdown of each tranche is conditional upon the satisfaction of certain terms and conditions, including the independent certification of construction progress at the Renard Diamond Project and its cost to complete being...
September 24, 2015 Stornoway Announces Updated Renard Mineral Resource Estimate
Stornoway Diamond Corporation (TSX:SWY) (the "Corporation" or "Stornoway") is pleased to announce an update to the Renard Diamond Project Mineral Resource estimate. Highlights A 16% increase in the Indicated Mineral Resources of Renard 2 to 21.6 million carats achieved through the conversion of Inferred Mineral Resources to 700 meters depth. An 11% increase in the total Indicated Mineral Resources of the project (inclusive of the Mineral Reserve) to 30.2 million carats New Inferred Mineral Resources at Renard 2 defined to 850 meters depth. The inclusion of over 4 million tonnes of lower grade Renard 2 Country Rock Breccia ("CRB") material in the Indicated Mineral Resource category for the first time. Substantial new exploration potential at Renard 2 and Renard 3 identified to 1,250 meters depth, where both kimberlites are interpreted to retain sizeable widths and remain open. Updated mine plan now under development to incorporate increased Indicated Mineral Resources. Matt Manson ,...
September 14, 2015 Stornoway Announces FY2016 First Quarter Results
Stornoway Diamond Corporation (TSX:SWY) (the "Corporation" or "Stornoway") announced today its first quarter results for the three months ended July 31, 2015 . First Quarter FY2016 Highlights (All quoted figures in CAD$) Construction at the Renard Diamond Project continues in line with the planned schedule and budget. Incurred costs and commitments at the quarter-end totaled $402.6 million, or 50% of budget. Overall construction progress stood at 35% compared to a planned 33%. Engineering progress stood at 80% compared to a planned 87%. On site manpower during the month of July averaged 329 workers, of which 24% were Crees of the Eeyou Istchee. At the end of the quarter principal construction on the process plant, power plant, maintenance facility and primary crusher had been initiated and were well advanced. Completion of the maintenance facility and enclosure of the process plant are expected to be completed by the end of September and October respectively, well within the planned...