NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
Stornoway Diamond Corporation (TSX:SWY) would like to remind holders of its common share purchase warrants, issued on July 8, 2014 and exercisable at C$0.90 per share (the “Warrants”) (TSX:SWY.WT.A), of their expiry at 5:00 pm (Eastern time) on July 8, 2016.
Pursuant to the terms of the July 8, 2014 financing transactions with Orion Mine Finance, Diaquem Inc. and Ressources Québec (wholly-owned subsidiaries of Investissement Québec), and the Caisse de dépôt et placement du Québec, Stornoway intends to use any proceeds from the exercise of the Warrants to complete the construction of the Renard Diamond Project ahead of drawing down funds from its committed C$100 million Senior Loan Facility with Diaquem Inc. The Diaquem Senior Loan facility bears an initial interest rate of prime plus 4.75% with a ten year term.
Matt Manson, President and CEO of Stornoway commented, “The Renard Project continues ahead of schedule and within budget. Formal commissioning of the process plant has commenced and first diamond production is expected shortly. Prior to the exercise of the Warrants, we have been forecasting excess financing capacity available to complete the project, comprising surplus cash and available cost-overrun facilities, of C$116 million. This calculation assumes the full drawdown of the Diaquem Senior Loan. Any and all proceeds from warrant exercise will serve to increase this financing capacity further, and will allow us to reduce our senior indebtedness proportionately, greatly increasing our financial flexibility as cash flow begins.”
This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of any securities referred to in this press release in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. The securities being offered have not been approved or disapproved by any regulatory authority, nor has any such authority passed upon the accuracy or adequacy of the final short form prospectus. The securities referred to in this press release have not been, nor will they be registered under the U.S. Securities Act of 1933, as amended, or applicable U.S. state securities laws.
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 8, 2014, Stornoway announced the completion of a $946 million project financing transaction to fully fund the project to production, and construction commenced on July 10, 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, with an Updated Mine Plan and Mineral Reserve Estimate in March 2016. These studies highlight the potential of the project to become a significant producer of high value rough diamonds over an initial 14 year mine life. Probable Mineral Reserves, as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”), stand at 22.3 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 1.8 million carats per annum over the first 10 years of mining, at an average valuation of US$155/carat based on March 2016 terms.
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 28, 2013, in respect of the January 2013 Optimization Study, the technical report dated January 11, 2016, in respect of the September 2015 Mineral Resource estimate, and the technical report dated March 30, 2016, in respect of the March 2016 Updated Mine Plan and Mineral Reserve Estimate 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.
On behalf of the Board
STORNOWAY DIAMOND CORPORATION
/s/ “Matt Manson”
Matt Manson
President and Chief Executive
For more information, please contact:
Matt Manson (President and CEO) at 416-304-1026 x2101
or
Orin Baranowsky (Vice President, Investor Relations and Corporate Development) at 416-304-1026 x2103
or
toll free at 1-877-331-2232
