Stornoway Announces Closing of Agreement to Acquire Remaining 50% of Renard Diamond Project and Board Appointments
VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 04/01/11 -- Stornoway Diamond Corporation (TSX: SWY) is pleased to announce the closing of the previously announced agreement to acquire the remaining 50% interest of DIAQUEM Inc. ('DIAQUEM') in the Renard Diamond Project ('Renard'), Stornoway's feasibility-stage diamond project in north-central Quebec (the 'Acquisition'). As provided under the terms of the Acquisition, Stornoway has now issued to DIAQUEM common voting shares equal to 25% of Stornoway's issued and outstanding common shares, and newly-created non-voting convertible shares such that DIAQUEM's total interest in Stornoway, if such convertible shares were fully converted for common shares, would be equal to 37% of the issued and outstanding common shares. DIAQUEM is a wholly-owned subsidiary of SOQUEM INC., itself a wholly-owned subsidiary of Investissement Quebec (formerly Societe generale de financement du Quebec).
The Renard Diamond Project is now owned 100% by Stornoway. A Bankable Feasibility Study and an Environmental and Social Impact Assessment are on schedule for completion in the 3rd quarter of 2011. In addition, it is expected that construction of the Route 167 Extension, the road development project that will provide year-round highway access to Renard by way of the communities of Mistissini and Chibougamau, will commence this year under the auspices of the Quebec Ministry of Transportation. In an era of tightening global supply for rough diamonds, Renard has the potential to become Quebec's first diamond mine with road and power infrastructure, a strong production profile, and a substantial mine life.
In accordance with the terms of the Acquisition and the approval of Stornoway shareholders at the special meeting held on February 10, 2011, the board of directors of Stornoway has been increased from 8 to 9 members and Mr. Jean-Jacques Carrier, Senior Vice-President and Chief Financial and Risk Officer of Investissement Quebec, has been appointed a director. The board of directors so formed with the addition of Mr. Carrier will appoint 2 additional directors as nominees of Investissement Quebec, as provided under the terms of the Acquisition and permitted under the Articles of Stornoway. Concurrently, Stornoway further announces the appointment of Mr. Ebe Scherkus, President and COO of Agnico-Eagle Mines Limited ('AEM') to the board of directors in the place of Mr. David Garofalo, President and CEO of Hudbay Minerals Inc. and formerly Chief Financial Officer of AEM. Ms. Eira Thomas will assume the role of non-Executive Chairman of the newly constituted board.
The common shares referred to herein have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any offer, solicitation or sale of the securities in any state in which such offer, solicitation or sale would be unlawful.
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 Quebec. In May 2010, Stornoway filed a National Instrument 43-101 compliant technical report for the Preliminary Assessment at Renard that estimated the project to have the potential to produce approximately 30 million carats of diamonds over a 25 year mine life, with a pre-tax Net Present Value of C$885 million (at an 8% discount rate) and an Internal Rate of Return of 24.8%. National Instrument 43-101 compliant Indicated and Inferred Mineral Resources currently stand at 23.8 and 17.5 million carats respectively, with a further 23.5 to 48.5 million carats classified as a non-resource, 'potential mineral deposit'. All kimberlites remain open at depth. Total capital investment is currently estimated to be $511 million, with an average operating expenditure of approximately $67 million per year and a workforce of 300 people. Readers are referred to the technical report in respect of the Renard Diamond Project for further details and assumptions relating to the project.
About Stornoway Diamond Corporation
Stornoway Diamond Corporation is one of Canada's leading diamond exploration and development companies, involved in the discovery of over 200 kimberlites in seven Canadian diamond districts. The Company benefits from a diversified diamond property portfolio, a strong financial platform and management and technical teams with experience in each segment of the diamond 'pipeline' from exploration to marketing.
About Investissement Quebec
Investissement Quebec's mission is to foster the growth of investment in Quebec, thereby contributing to economic development and job creation in every region. The Corporation offers businesses a full range of financial solutions, including loans, loan guarantees and equity investments, to support them at all stages of their development. It is also responsible for administering tax measures and prospecting for foreign investment.
SOQUEM, a wholly-owned subsidiary of Investissement Quebec, is to undertake exploration, development and mining activities throughout the province of Quebec.
On behalf of the Board
STORNOWAY DIAMOND CORPORATION
Matt Manson, President and Chief Executive Officer
This document contains 'forward-looking information' within the meaning of Canadian securities legislation and 'forward-looking statements' within the meaning of the United States Private Securities Litigation Reform Act of 1995. This information and these statements, referred to herein as 'forward-looking statements' are made as of the date of this document and the Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by law.
Forward-looking statements relate to future events or future performance and reflect current expectations or beliefs regarding future events and include, but are not limited to, statements with respect to: (i) the amount of mineral resources and potential mineral deposits; (ii) the amount of future production over any period; (iii) net present value and internal rates of return of the proposed mining operation; (iv) capital costs and operating costs; (v) mine expansion potential and expected mine life; and (vi) expected time frames for completion of permitting and regulatory approvals, completion of a Feasibility Study and making a production decision. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as 'expects', 'anticipates', 'plans', 'projects', 'estimates', 'assumes', 'intends', 'strategy', 'goals', 'objectives' or variations thereof or stating that certain actions, events or results 'may', 'could', 'would', 'might' or 'will' be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements
All forward-looking statements are based on Stornoway's or its consultants' current beliefs as well as various assumptions made by and information currently available to them. Many of these assumptions are set forth in the news release and include: (i) estimates of net present value and internal rates of return; (ii) estimates of potential production and duration of mine life; (iii) estimated completion date for the Feasibility Study; (iv) required capital investment and estimated workforce requirements; (v) receipt of regulatory approvals on acceptable terms within commonly experienced time frames; (vi) the assumption that the partners will make a production decision, and that decision will be positive; (vii) anticipated timelines for the commencement of mine production. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Many forward-looking statements are made assuming the correctness of other forward looking statements, such as statements of net present value and internal rate of return, which are based on most of the other forward-looking statements and assumptions herein. The cost information is also prepared using current values, but the time for incurring the costs will be in the future and it is assumed costs will remain stable over the relevant period.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that estimates, forecasts, projections and other forward-looking statements will not be achieved or that assumptions do not reflect future experience. We caution readers not to place undue reliance on these forward-looking statements as a number of important factors could cause the actual outcomes to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates assumptions and intentions expressed in such forward-looking statements. These risk factors may be generally stated as the risk that the assumptions and estimates expressed above do not occur, including the assumption in many forward-looking statements that other forward-looking statements will be correct, but specifically include, without limitation, risks relating to variations in the grade, kimberlite lithologies and country rock content within the material identified as mineral resources from that predicted, variations in rates of recovery and breakage; the greater uncertainty of potential mineral deposits, developments in world diamond markets, slower increases in diamond valuations than assumed, risks relating to fluctuations in the Canadian dollar and other currencies relative to the US dollar, increases in the costs of proposed capital and operating expenditures, increases in financing costs or adverse changes to the terms of available financing, if any, tax rates or royalties being greater than assumed, results of exploration in areas of potential expansion of resources, changes in development or mining plans due to changes in other factors or exploration results of Stornoway or its joint venture partners, changes in project parameters as plans continue to be refined, risks relating to receipt of regulatory approvals or settlement of an Impact and Benefits Agreement, the effects of competition in the markets in which Stornoway operates, operational and infrastructure risks and the additional risks described in Stornoway's most recently filed Annual Information Form, annual and interim MD&As, and Stornoway's anticipation of and success in managing the foregoing risks. Stornoway cautions that the foregoing list of factors that may affect future results is not exhaustive. When relying on our forward-looking statements to make decisions with respect to Stornoway, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Stornoway does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by Stornoway or on our behalf, except as required by law.
Contacts:
Stornoway Diamond Corporation
Matt Manson
President and CEO
416-304-1026
Stornoway Diamond Corporation
Nick Thomas
Manager Investor Relations
604-983-7754 or toll free: 1-877-331-2232
info@stornowaydiamonds.com
Stornoway Diamond Corporation
M. Ghislain Poirier
Vice-president Affaires publiques de Stornoway
418-780-3938
gpoirier@stornowaydiamonds.com
www.stornowaydiamonds.com
Investissement Quebec
Josee Beland
Porte-parole et conseillere en affaires publiques,
514-873-6027
josee.beland@invest-quebec.com
SOQUEM
Pierre Bertrand
Directeur general de SOQUEM
819-874-3773
pierre.bertrand@soquem.qc.ca