Stornoway Diamond Corporation (TSX:SWY) is pleased to announce a revised construction schedule for the Renard Diamond Project with an associated reduction in the forecast cost to complete. Re-baselining of the project’s schedule and capital cost forecasts has been made possible following several months of construction progress achieved consistently ahead of plan, and has been undertaken as part of the revised mine planning for Renard which is expected to be completed in the second quarter of this year.
First ore delivery to the Renard diamond process plant has now been scheduled for the end of September 2016, with commercial production (60% of plant capacity achieved over 30 days) to be achieved by December 31, 2016. This is a 5 month improvement on the previous schedule, which assumed commercial production in the second quarter of 2017.
The estimated capital cost to complete for the project has been adjusted downwards from C$811.0 million to C$775.4 million, reflecting savings in general and administrative expenses and capitalized operating expenses. The new cost forecast includes all contingencies, escalation allowances, and working capital up to the date of commercial production.
Matt Manson, President and CEO, commented “This improvement in our development schedule at Renard has been made possible by the excellent construction environment we are enjoying in Québec and the efficient progress made by our team. The reduced cost to complete adds further strength to our balance sheet, already boosted by the ongoing F/X gains on the portion of our project financing that was funded or committed in US$. Future progress reporting at Renard will be with reference to these re-baselined schedule and cost targets.”
As of December 31st, 2015, prior to the re-baselining exercise, overall construction at the project stood at 63.3% compared to a plan of 59.6%, with engineering substantially complete at 99.0%. An updated mine plan for the Renard Project is under preparation and is expected to be released early in the second quarter of this year. This plan will incorporate the re-baselined schedule and capital cost for the construction of the project, and will include revised guidance on production profile, mine life, operating costs, sustaining capital and Mineral Reserves. This work is currently ongoing.
About the Renard Diamond Project
The Renard Diamond Project 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. On July 8th 2014 Stornoway announced the completion of a C$946 million project financing transaction to fully fund the project to production, and construction commenced on July 10th, 2014. First ore is scheduled to be delivered to the plant at the end of September 2016, with commercial production scheduled for December 31, 2016.
In January 2013, Stornoway released the results of an Optimized Feasibility Study at Renard which highlighted the potential of the project to become a significant producer of high value rough diamonds over a long mine life. Probable Mineral Reserves, as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”), stand at 17.9 million carats. In accordance with the Corporation’s September 2015 Mineral Resource estimate, total Indicated Mineral Resources, inclusive of the Mineral Reserve, stand at 30.2 million carats, with a further 13.35 million carats classified as Inferred Mineral Resources, and 33.0 to 71.1 million carats classified as non-resource exploration upside. Average annual diamond production is forecast at 1.6mcarats/year over the first 11 years of mining, at an average valuation of US$190/carat based on a March 2014 assessment by WWW International Diamond Consultants Ltd.
Readers are cautioned that the potential quality and grade of any target for further exploration is conceptual in nature, there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the target being delineated as a Mineral Resource. All kimberlites remain open at depth. Readers are referred to the technical report dated February 28th, 2013 in respect of the January 2013 Optimization Study, and the technical report dated January 11, 2016 in respect of the September 2015 Mineral Resource estimate, for further details and assumptions relating to the project. Disclosure of a scientific or technical nature in this press release was prepared under the supervision of Patrick Godin, P.Eng. (Québec), Chief Operating Officer and Robin Hopkins, P.Geol. (NT/NU), Vice President, Exploration, both Qualified Persons (“QP”) under National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”).
About Stornoway Diamond Corporation
Stornoway is a leading Canadian diamond exploration and development company listed on the Toronto Stock Exchange under the symbol SWY and headquartered in Montreal. Our flagship asset is the 100% owned Renard Diamond Project, on track to becoming Québec’s first diamond mine. Stornoway is a growth oriented company with a world class asset, in one of the world’s best mining jurisdictions, in one of the world’s great mining businesses.
On behalf of the Board
STORNOWAY DIAMOND CORPORATION
/s/ “Matt Manson”
Matt Manson
President and Chief Executive
