Stornoway Diamond Corporation (TSX:SWY)
;
(the “Corporation” or “Stornoway”) is pleased to announce
that Commercial Production has been achieved at the Renard Diamond
Mine. Commercial Production at Renard is defined as an average
processing rate of 60% of plant name-plate capacity over a 30 day
period. This was achieved on December 3, 2016, with an average
processing rate of 4,120 tonnes per day over the preceding 30 day
period compared to a name-plate capacity of 6,000 tonnes per
day. Pursuant to the terms of Stornoway’s financing
agreements, Stornoway will formally declare commercial production
on the first day of the month following the month in which it is
achieved, which is January 1, 2017. The company expects to continue
the ramp-up of the process plant to full production over the next
two quarters.
Matt Manson, President and CEO of Stornoway,
stated: “I would like to take this opportunity to thank the entire
Renard team on achieving this important milestone well within
schedule and budget, and with quality workmanship from the
beginning. The attainment of Commercial Production marks the end of
the project’s capital expense period, and our final capital costs
are forecast to be comfortably within the reduced C$775 million
estimate set out in February 2016. Our production ramp-up
continues, with three diamond sales scheduled for the first quarter
of 2017.”
About the Renard Diamond
Mine
The Renard Diamond Mine 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. Processing
of ore commenced on July 15, 2016.
In March 2016, Stornoway released the results of
an Updated Mine Plan and Mineral Reserve Estimate in March 2016.
The study highlighted 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 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.
Qualified Persons
Disclosure of a scientific or technical nature
in this press release was prepared under the supervision of M.
Patrick Godin, P.Eng. (Québec), Chief Operating Officer, and Mr.
David Farrow, P.Geol. Pr.Sci.Nat (South Africa) and P.Geo. (BC),
Vice President Diamonds, both “qualified persons” under 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, 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 BoardSTORNOWAY DIAMOND
CORPORATION/s/ “Matt Manson”Matt MansonPresident and Chief
Executive
For more information, please contact Matt Manson
(President and CEO) at 416-304-1026 x2101or Orin Baranowsky (Vice
President, Investor Relations and Corporate Development) at
416-304-1026 x2103 or toll free at 1-877-331-2232
Pour plus d’information, veuillez contacter M.
Ghislain Poirier, Vice-président Affaires publiques de
Stornoway au 418-254-6550, gpoirier@stornowaydiamonds.com
** Website: www.stornowaydiamonds.com Email:
info@stornowaydiamonds.com **
This press release contains "forward-looking
information" within the meaning of Canadian securities legislation.
This information and these statements, referred to herein as
“forward-looking statements”, are made as of the date of this press
release and the Corporation does not intend, and does not assume
any obligation, to update these forward-looking statements, except
as required by law.
These forward-looking statements include, among
others, statements with respect to Stornoway’s objectives for the
ensuing year, Stornoway’s medium and long-term goals, and
strategies to achieve those objectives and goals, as well as
statements with respect to Stornoway’s beliefs, plans, objectives,
expectations, anticipations, estimates and intentions. Although
management considers these assumptions to be reasonable based on
information currently available to it, they may prove to be
incorrect.
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
Reserves, Mineral Resources and exploration targets; (ii) the
amount of future production over any period; (iii) net present
value and internal rates of return of the mining operation;
(iv) assumptions relating to recovered grade, average ore
recovery, internal dilution, mining dilution and other mining
parameters set out in the Updated Renard Diamond Project Mine Plan
and Mineral Reserve Estimate, Québec, Canada, NI 43-101 Technical
Report (the “2016 Technical Report”) ; (v) assumptions
relating to gross revenues, operating cash flow and other revenue
metrics set out in the 2016 Technical Report; (vi) mine
expansion potential and expected mine life; (vii) expected
time frames for completion of permitting and regulatory approval
related to construction activities at the Renard Diamond Project;
(viii) the expected time frames for the completion of the
open pit and underground mine at the Renard Diamond Project; (ix)
the expected time frames for the completion of construction, start
of mining and commercial production at the Renard Diamond Project
and the financial obligations or costs incurred by Stornoway in
connection with such mine development; (x) future exploration
plans; (xi) future market prices for rough diamonds;
(xii) the economic benefits of using liquefied natural gas
rather than diesel for power generation; (xiii) sources of and
anticipated financing requirements; (xiv) the effectiveness,
funding or availability, as the case may require, of the Stream,
the Senior Secured Loan, the COF and the Equipment Facility and the
use of proceeds therefrom; (xv) the Corporation’s ability to
meet its Subject Diamonds Interest delivery obligations under the
Purchase and Sale Agreement; and (xvi) the impact of the
Financing Transactions on the Corporation’s operations,
infrastructure, opportunities, financial condition, access to
capital and overall strategy.; (xvii) the foreign exchange
rate between the US dollar and the Canadian dollar; and (xviii) the
availability of excess funding for the construction and operation
of the Renard Diamond Project . 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”, “schedule” 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.
Forward-looking statements are made based upon
certain assumptions by Stornoway or its consultants and other
important factors that, if untrue, could cause the actual results,
performances or achievements of Stornoway to be materially
different from future results, performances or achievements
expressed or implied by such statements. Such statements and
information are based on numerous assumptions regarding present and
future business prospects and strategies and the environment in
which Stornoway will operate in the future, including the price of
diamonds, anticipated costs and Stornoway’s ability to achieve its
goals, anticipated financial performance, regulatory developments,
development plans, exploration, development and mining activities
and commitments, and the foreign exchange rate between the US and
Canadian dollars. Although management considers its assumptions on
such matters to be reasonable based on information currently
available to it, they may prove to be incorrect. Certain important
assumptions by Stornoway or its consultants in making
forward-looking statements include, but are not limited to:
(i) required capital investment and estimated workforce
requirements; (ii) estimates of net present value and internal
rates of return; (iii) receipt of regulatory approval on
acceptable terms within commonly experienced time frames;
(iv) anticipated timelines for completion of construction,
commencement of mine production and development of an open pit and
underground mine at the Renard Diamond Project, which heavily
depends, among other things, on adequate availability and
performance of skilled labour, engineering and construction
personnel, performance of mining and construction equipment and
timely delivery of components; (v) anticipated geological
formations; (vi) market prices for rough diamonds and the
potential impact on the Renard Diamond Project; (vii) the
satisfaction or waiver of all conditions under each of the Senior
Secured Loan, the COF and the Equipment Facility to allow the
Corporation to draw on the funding available under those financing
elements for the completion of the development and construction of
the Renard Diamond Project; (viii) Stornoway’s interpretation
of the geological drill data collected and its potential impact on
stated Mineral Resources and mine life; (ix) future exploration
plans and objectives; (x) the Corporation’s ability to meet
its delivery obligations under the Steaming Agreement; and (xi) the
continued strength of the US dollar against the Canadian dollar.
Additional risks are described in Stornoway's most recently filed
Annual Information Form, annual and interim MD&A, and other
disclosure documents available under the Corporation’s profile at:
www.sedar.com.
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 risk 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: (i) risks relating to variations in the grade,
kimberlite lithologies and country rock content within the material
identified as Mineral Resources from that predicted;
(ii) variations in rates of recovery and breakage;
(iii) the uncertainty as to whether further exploration of
exploration targets will result in the targets being delineated as
Mineral Resources; (iv) developments in world diamond markets;
(v) slower increases in diamond valuations than assumed;
(vi) risks relating to fluctuations in the Canadian dollar and
other currencies relative to the US dollar; (vii) increases in
the costs of proposed capital and operating expenditures;
(viii) increases in financing costs or adverse changes to the
terms of available financing, if any; (ix) tax rates or
royalties being greater than assumed; (x) uncertainty of
results of exploration in areas of potential expansion of
resources; (xi) changes in development or mining plans due to
changes in other factors or exploration results; (xii) changes
in project parameters as plans continue to be refined;
(xiii) risks relating to the receipt of regulatory approval or
the implementation of the existing Impact and Benefits Agreement
with aboriginal communities; (xiv) the effects of competition
in the markets in which Stornoway operates; (xv) operational
and infrastructure risks; (xvi) execution risk relating to the
development of an operating mine at the Renard Diamond Project;
(xvii) failure to satisfy the conditions to the effectiveness,
funding or availability, as the case may require, of each of the
Stream, the Senior Secured Loan, the COF and the Equipment
Facility; (xviii) changes in the terms of the Stream, the
Senior Secured Loan, the COF or the Equipment Facility;
(xix) the funds of the Stream, the Senior Secured Loan, the
COF or the Equipment Facility not being available to the
Corporation; (xx) the Corporation being unable to meet its
delivery obligations under the Stream; (xxi) future sales or
issuance of Common Shares lowering the Common Share price and
diluting the interest of existing shareholders; and (xxi) the
additional risks described in Stornoway's most recently filed
Annual Information Form, annual and interim MD&A 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, and unforeseeable, new
risks may arise from time to time.