Stornoway Diamond Corporation (TSX:SWY) announces that it has drawn on the second tranche of its unsecured non-revolving bridge credit facility of up to $20 million with Diaquem Inc. (the “Lender”) entered into in October 2013. The proceeds of the second tranche of the facility, in an amount of $10 million, will be used in connection with the development of the Renard Diamond Project and for general corporate purposes, including costs relating to Stornoway’s ongoing project financing activities. The facility is now fully drawn.
Stornoway also announces that Diaquem has agreed to extend the maturity date of the facility from March 28, 2014 to the earlier of June 27, 2014 and the date on which financial closing and initial disbursement occurs with respect to the financing of the development of the Renard Diamond Project.
As previously announced, the facility bears interest at 12% per annum, and Stornoway has the right to satisfy up to 50% of the interest payable on the aggregate of the amounts loaned to Stornoway pursuant to the facility by issuing to the Lender common shares of Stornoway at an issue price of 95% of the volume weighted average price of such shares as of the interest payment date, while the remaining portion of interest payable on such amounts will be paid in cash.
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. In November 2011, Stornoway released the results of a Feasibility Study at Renard, followed by an Optimization Study in January 2013, 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 under National Instrument (“NI”) 43-101 stand at 17.9 million carats. Total Indicated Mineral Resources, inclusive of the Mineral Reserve, stand at 27.1 million carats, with a further 16.9 million carats classified as Inferred Mineral Resources, and 25.7 to 47.8 million carats classified as non-resource exploration upside. All kimberlites remain open at depth. Pre-production capital cost stands at an estimated C$752 million, with a life of mine operating cost of C$57.63/tonne giving a 67% operating margin over an initial 11 year mine life. Readers are referred to the technical report dated December 29th, 2011 in respect of the November 2011 Feasibility Study for the Renard Diamond Project, and the technical report dated February 28th, 2013 in respect of the January 2013 Optimization Study, for further details and assumptions relating to the project.
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.
