Foxtrot (Renard)

Renard Preliminary Economic Assessment      Route Monts Otish (Route 167 Extension)

The completion of 2010 Winter Drilling Program at Renard was announced on April 14, 2010 .  The geological component of the winter drill program comprised three holes totaling 1,711 meters, targeted at the interpreted deep extensions of the Renard 3, Renard 4 and Renard 65 kimberlite pipes. In each case, the objective of the drilling was to test the scope of the kimberlites below the level of previous drilling, at depths where each has been previously classified as a potential mineral deposit ("PMD").

Highlights included:

• Intersection of significant thickness of kimberlite in a previously untested location on the eastern side of Renard 3 at 373 meters vertical depth. Hole terminated in kimberlite prior to reaching the expected projection of the pipe based on previous geological mapping.
• Significant expansion of Renard 65 at its eastern extent at 383 meters vertical depth
• Significant expansion of Renard 4 at its southeastern extent. Hole terminated in kimberlite at 759 meters vertical depth.

Drilling also included 2,436 meters of geotechnical and hydro-geological drilling required for elements of the Feasiblity Study.  Follow up plans for the Summer Drilling program are being discussed at the time of writing and will include further exploratory drilling.

On March 22, 2010 a press release announcing the Updated Preliminary Economic Assessment was released.  The results demonstrated a 1400% increase in the pre-tax NPV over the initial study of December 2008 raising it from C$56 million to C$885 million.  Other highlights included an increased IRR of 24.8%, a 25 year mine life, an annual production of 1.6 million carats and a mine plan based on a 30 million carat resource.

The new geological models developed for the resource study released in December 2009 point to significant potential gains at depth for the other pipes within the original mine plan, and for pipes outside of the mineplan (R65).  Drilling is currently underway  to test some of these areas and to gain further information regarding the geotechnical nature of the kimberlite pipes.   

Stornoway announced the results of the 2009 Summer drilling campaign for the Renard Project on October 6, 2009.  The objective of the program was to convert as much of the 10.5 to 12.3 million tonnes of potential mineral deposit material identified at Renard 2 in the winter drilling (March 31, 2009) to a formal resource classification.  The results of drilling led to even further expansion of the Renard 2 pipe (14.8 to 17.8 million tonnes as of October 6, 2009):  an estimated fourfold tonnage increase compared to the initial mineral resource estimate released October 28, 2008 (for visual representation of geological model expansion click here).  

On March 31, 2009, Stornoway announced that winter drilling on Renard 2 and Renard 3 was complete.  Renard 3 had shown some modest improvement to the existing Potential Mineral Deposit, but at Renard 2, a significantly expanded zone of kimberlite on the northern and eastern sides at depths greater than 250 meters below surface (see illustration) had been encountered. Stornoway first announced the discovery of this new zone on March 9th, 2009. Three separate deep drill holes have delineated the zone in the north-south and east-west axes, prompting a re-evaluation of the geological model for the overall pipe. It now appears that Renard 2 is approximately twice as large as previously thought when modeled to a depth of 570 meters below surface, which represents the base of the geological model used in the recent National Instrument ("NI") 43-101 compliant mineral resource statement (Stornoway Press Release dated December 15, 2008). The pipe is now approximately three times larger than previously thought when modeled to a depth of 700 meters below surface.  These results have had a dramatic impact on Stornoway's estimate of the overall size of the pipe. In the initial Renard Preliminary Assessment, Renard 2 contributed the bulk of the mineral resource contained within the conceptual mine plan. The discovery of such a large amount of new kimberlite, much of it within the scope of the existing underground mine design, is expected to have a very positive impact on project economics.

This important discovery followed the announcement by the Québec government of major capital funding for the ‘Route 167 Extension' or the Routes de Monts Otish (March 19, 2009 (en francais) (press released by Stornoway on March 23, 2009)  The road will connect the communities of Chibougamau and Mistissini to the Renard Diamond Project by way of several other prospective mining projects and the proposed Albanel-Témiscamie-Otish Park.  Stornoway views this announcement of major capital funding as a significant milestone in the development of the James Bay region of northern Québec and of the potential development of the Renard Diamond Project. 

The first element of the 2009 mineral resource expansion work consisted of diamond processing results from a 544 tonne sample acquired from the Hibou Dyke in 2008 and were announced on January 15, 2009.  A total of 781.41 carats of diamonds were recovered from 543.86 tonnes (dry weight) of kimberlite, representing an overall diamond recovery of 144 carats per hundred tonnes (cpht) for stones retained on a +1 DTC screen.

On October 28, 2008, Stornoway announced the receipt of a positive economic study for the Renard Diamond Project. The NI 43-101 technical report was filed on December 15th, 2008 and included some improvements to the economics outlined in October.  The study is comprised of a National Instrument ("NI") 43-101 compliant resource estimate and a diamond processing plant design prepared by AMEC Americas Limited ("AMEC"), and a mine plan, capital and operating cost estimate, and an economic assessment prepared by Agnico-Eagle Mines Limited ("Agnico"). AMEC's plant design, and elements of Agnico's mining study such as the cost estimation, have been completed to a pre-feasibility standard. However, the more conceptual nature of the mine plan, and the inclusion of inferred resource from AMEC's mineral resource estimate in the economic assessment, dictates that the two studies, in combination, comprise a "Preliminary Assessment" under the definitions contained within NI 43-101.  For more information, click here.

As part of the National Instrument ("NI") 43-101 compatible resource estimation (by AMEC Americas) the 2007 bulk sample parcel of diamonds from Renard 2, 3 and 4 were  given updated values on April 29, 2008 by WWW International Diamond Consultants Ltd.  The Renard 2 and Renard 3 diamonds experienced a price increase of 11% and were valued at US$121/carat.  The revised model was generated by WWW restating their own September 2007 valuation result on each diamond parcel on the basis of their March 2008 price book, and applying an adjustment factor to the diamond price model accordingly.   The Renard 4 diamond parcel included an additional 508.6 carats that were not part of the previous valuation and were valued at US$79/carat, representing a 14% price increase.  In addition, WWW  further recommended a modeled "Base Case" diamond price estimate for the Lynx kimberlite dyke of US$66 per carat, with a "High" modeled price estimate of US$97 per carat and a "Low" modeled price estimate of US$56 per carat.  A similar value for  Hibou diamonds was recommended by WWW to be used for planning purposes, based on the 40 carat parcel recovered in January, 2008.

On January 28, 2008 diamond recovery results from a minibulk sample of 30.4 tonnes (dry weight) of the Hibou dike, located 1.3 km northwest of Renard's 2, 3 and 4, were announced.   In total, 39.54 carats of diamonds were recovered representing an overall diamond recovery of 126 carats per hundred tonnes (cpht) for stones retained on a +1 DTC screen.  The largest intact diamond recovered was a 1.01 carat light off-colour octahedron.

Diamond recovery results from a 494 tonne sample of the Lynx dike were announed on December 13, 2007, along with additional diamond recovery results from Renard 3 and Renard 4.  A total of 529 carats were recovered resulting in a diamond content of 107 cpht for the sample.  The largest stone weighed 21.53 carats (see photo) and was described as a brown, gem quality octahedron.  The total 588 carat parcel of Lynx diamonds recovered to date will now allow a preliminary estimate of average diamond value to be determined for this dyke system.

Due to the high grade results from the bodies mentioned above, and their location proximal to the Renard cluster, Stornoway is assessing the Lynx and Hibou kimberlite dikes as high grade resources amenable to extraction by shallow stripping or trenching during the early commissioning and ramp-up period of a potential Renard diamond mine.  

On October 22, 2007 Stornoway reported diamond valuation results on 6,432 carats of diamonds from a 6,036 dry tonne sample of the Renard 2, 3, and 4 kimberlite pipes.  The prices, as mentioned above, were amended in April of 2008.

The Renard 4 diamond parcel differs from the other parcels in that it has an apparent relative absence of larger diamonds.  Its lower modeled price estimate is principally a function of this finer diamond size distribution.  Unlike the Renard 2 and 3 samples, which were collected by underground decline across the breadth of each pipe, the Renard 4 sample was collected from a single surface trench excavated within the "northern complex zone", a distinct unit of complex geology outcropping at the northern limit of the Renard 4 kimberlite.  This zone carries a high diamond content and is accessible at surface, but it is not representative geologically of the bulk of Renard 4, which is comprised of a tuffisitic kimberlite breccia with affinities to the "kimb2a" tuffisitic kimberlite breccia observed in Renard 2.  Diamond data suggests the population of diamonds in Renard 4 is the same as in Renard's 2 and 3 and with a more representative sample, the valuations of Renard 4 diamonds will approach that of Renard's 2 and 3.

The joint venture processed an additional 400 tonne sample of Renard 4 northern complex zone material (sample 4003) that was stockpiled during the 2006 bulk sample program and announced the results on December 13, 2007.  

Final diamond recovery for the Renard 4 kimberlite body were announced on August 14, 2007 and included a total of 2,213 carats of diamonds from five separate sub-samples with a combined dry sample weight of 1,659 tonnes, representing an overall diamond recovery of 133 carats per hundred tonnes (cpht) for stones retained on a +1 DTC screen. Diamond recovery from individual sub-samples varied between 80 cpht and 184 cpht, with the largest diamond weighing 5.92 carats.  The reception of these results marked the end of the bulk sample designed to collect a minimum 6000 carat parcel from Renard bodies 2, 3, and 4 for valuation.

On July 25, 2007 Stornoway reported that Phase One of the pre-feasibility study had commenced. Phase one included preliminary geological, geotechnical, environmental and hydro-geological assessment.   

Final diamond recovery results from the Renard 2 kimberlite were released on July 31, 2007.   In total, 1,602 carats were recovered from 2,448.9 tonnes of material.  The largest stone was a 15.46 carat light off-colour gem octahedrom, Quebec's largest diamond (see pictures of Renard 2 stones).  Renard 2 is broken down into two distinct phases:  the 'blue' unit (kimb2a), which yielded a diamond content 48 cpht, and a 'brown' unit (kimb2b), which yielded a diamond content of  111 cpht.  Both units display an incidence of large stones, an important driver of overall rock value.

On June 20, 2007 the final diamond recovery results of the Renard 3 bulk sample were released.  Renard 3 returned a total of 2,681 carats of diamonds from 12 separate sub-samples with a combined dry sample weight of 1,929 tonnes, representing an overall diamond recovery of 139 carats per hundred tonnes (cpht) for stones retained on a +1 Diamond Trading Company (DTC) screen. Diamond recovery from individual sub-samples varied between 78 cpht and 223 cpht, with the largest diamond weighing 10.15 carats (Renard 3 Diamond Photos).  A 13 cpht diamond content increase from earlier sampling campaigns was observed and was most likely due to better recovery and the larger sample size.

The ten tonne per hour DMS test facility was built at the project site in order to facilitate processing of the bulk sample. Site preparation for the DMS commenced in late July 2006 and commissioning commenced in November 2006. The facility will remain on site for processing the remaining material from Renard 2 and 4, and for processing samples collected from kimberlite bodies on the Foxtrot property in the future.

2004 Diamond Valuation

In 2001, a drill program on the Foxtrot property discovered Renard 1 and 2, which proved to be diamondiferous. Programs to 2003 identified an additional eight kimberlites, named Renard 3 to 10. Delineation drilling completed on Renard 5 and 6 during the winter 2003 program established that Renard 5 and 6 constitute one body, now named "Renard 65". As a result, the total number of kimberlites thus far discovered in the Renard cluster stands at nine. All of the Renard bodies are diamondiferous (see Renard diamond data).

Encouraged by the initial diamond results, the joint venture collected more than 600 tonnes of kimberlite from Renard 2, 3, 4, and 65 during 2004. In 2005, processing the 664 tonnes of material recovered 459 carats of diamonds. The valuation of 459 carats of diamonds, completed early in the second quarter of 2005, returned a preliminary modeled value of US$88 per carat.

2004 Tonnage Estimate by Wardrop Engineering

The joint venture prepared a preliminary model indicating that Renard 2, 3, 4, and 9 contain an estimated 23.2 to 27.5 million tonnes of kimberlite representing approximately 17.6 to 20.9 million carats of diamonds (see summary table).

The estimated tonnage of Renard 2, 3, 4 and 9 and the estimated number of carats contained in these bodies is conceptual in nature, and does not conform to the definition of a "mineral resource" established by National Instrument 43-101.