Stornoway Diamond Corporation (TSX:SWY)
(the “Corporation” or “Stornoway”) is pleased to
announce that it expects to commence remobilization of staff to the
Renard Mine, beginning tomorrow morning, July 4, 2018. Over the
last 48 hours, rainfall and a shifting of the prevailing winds have
allowed the principal fires south of the Clarence and Abel Swallow
Airport to be contained, allowing for the safe transit of mine
staff to the Renard Mine. Stornoway expects to recommence full mine
operations forthwith.
Stornoway acknowledges the support and
collaboration it has received during this situation from its
employees, the Ministère de l’Énergie et des Ressources Naturelles
and the Société de Protection des Forêts Contre le Feu.
About the Renard Diamond
Mine
The Renard Diamond Mine is Quebec’s first
producing diamond mine and Canada’s sixth. It 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. Construction on the project commenced on July
10, 2014, and commercial production was declared on January 1,
2017. Average annual diamond production is forecast at 1.8 million
carats per annum over the first 10 years of mining. 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.
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 (CFO) at 416-304-1026
x2103 or Jodi Hackett (Manager, Communications) at 416-304-1026
x2104 or toll free at 1-877-331-2232Pour plus d’information,
veuillez contacter M. Patrick Godin, Chef des opérations de
Stornoway au 514-512-9724, pgodin@stornowaydiamonds.com**
Website: www.stornowaydiamonds.com Email:
info@stornowaydiamonds.com ** |
FORWARD-LOOKING STATEMENTS
This document contains forward-looking
information (as defined in National Instrument 51‑102 – Continuous
Disclosure Obligations) and forward-looking statements within the
meaning of Canadian securities legislation and the United States
Private Securities Litigation Reform Act of 1995 (collectively
referred to herein as “forward-looking
information” or “forward-looking
statements”). These forward-looking statements are made as
of the date of this document 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 relate to
future events or future performance and include, among others,
statements with respect to Stornoway’s objectives for the ensuing
year, our medium and long-term goals, and strategies to achieve
those objectives and goals, as well as statements with respect to
our management’s beliefs, plans, objectives, expectations,
estimates, intentions and future outlook and anticipated events or
results. Although management considers these assumptions to be
reasonable based on information currently available to it, they may
prove to be incorrect.
Forward-looking statements 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 estimated amount of future production over any
period; (iii) net present value and internal rates of return
of the mining operation; (iv) expectations and targets
relating to recovered grade, size distribution and quality of
diamonds, average ore recovery, internal dilution, mining dilution
and other mining parameters set out in the 2016 Technical Report as
well as levels of diamond breakage; (v) expectations, targets
and forecasts relating to gross revenues, operating cash flows and
other revenue metrics set out in the 2016 Technical Report, growth
in diamond sales, cost of goods sold, cash cost of production,
gross margins estimates, planned and projected diamond sales, mix
of diamonds sold, and capital expenditures, liquidity and working
capital requirements; (vi) mine and resource expansion potential,
expected mine life, and estimated incremental ore recovery, revenue
and other mining parameters from potential additional mine life
extension; (vii) expected time frames for completion of
permitting and regulatory approvals related to ongoing construction
activities at the Renard Diamond Mine; (viii) the expected time
frames for the completion of the open pit and underground mine at
the Renard Diamond Mine; (ix) the expected financial obligations or
costs incurred by Stornoway in connection with the ongoing
development of the Renard Diamond Mine; (x) mining, development,
production, processing and exploration rates, progress and plans,
as compared to schedule and budget, and planned optimization,
expansion opportunities, timing thereof and anticipated benefits
therefrom; (xi) future exploration plans and potential upside
from targets identified for further exploration; (xii) expectations
concerning outlook and trends in the diamond industry, rough
diamond production, rough diamond market demand and supply, and
future market prices for rough diamonds and the potential impact of
the foregoing on various Renard financial metrics and diamond
production; (xiii) the economic benefits of using liquefied
natural gas rather than diesel for power generation;
(xiv) sources of and anticipated financing requirements;
(xv) the ability to meet Subject Diamonds Interest delivery
obligations under the Purchase and Sale Agreement; (xvi) the
foreign exchange rate between the US dollar and the Canadian
dollar; and (xvii) the anticipated benefits from recently approved
plant modification measures and the anticipated timeframe and
expected capital cost thereof. 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 recovered
grade, size distribution and quality of diamonds, average ore
recovery, internal dilution, and levels of diamond breakage, 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) the accuracy of our estimates regarding
capital and estimated workforce requirements; (ii) estimates
of net present value and internal rates of return;
(iii) recovered grade, size distribution and quality of
diamonds, average ore recovery, internal dilution, mining dilution
and other mining parameters set out in the 2016 Technical Report as
well as levels of diamond breakage; (iv) the expected mix of
diamonds sold, and successful mitigation of ongoing issues of
diamond breakage in the Renard Diamond Mine process plant and
realization of the anticipated benefits from plant modification
measures within the anticipated timeframe and expected capital
cost; (v) the stabilization of the Indian currency market and full
recovery of prices; (vi) receipt of regulatory approvals on
acceptable terms within commonly experienced time frames and
absence of adverse regulatory developments; (vii) anticipated
timelines for the development of an open pit and underground mine
at the Renard Diamond Mine; (viii) anticipated geological
formations; (ix) continued market acceptance of the Renard diamond
production, conservative forecasting of future market prices for
rough diamonds and impact of the foregoing on various Renard
financial metrics and diamond production; (x) the timeline,
progress and costs of future exploration, development, production
and mining activities, plans, commitments and objectives; (xi) the
availability of existing credit facilities and any required future
financing on favorable terms and the satisfaction of all covenants
and conditions precedent relating to future funding commitments;
(xii) the ability to meet Subject Diamonds Interest delivery
obligations under the Purchase and Sale Agreement;
(xiii) Stornoway’s interpretation of the geological drill data
collected and its potential impact on stated Mineral Resources and
mine life; (xiv) the continued strength of the US dollar against
the Canadian dollar and absence of significant variability in
interest rates; (xv) improvement of long-term diamond industry
fundamentals and absence of material deterioration in general
business and economic conditions; and absence of significant
variability in interest rates; (xvi) increasing carat recoveries
with progressively increasing grade in LOM plan;
(xvii) estimated incremental ore recovery, revenue and other
mining parameters from potential additional mine life extension
with minimal capital expenditures; (xviii) availability of
skilled employees and maintenance of key relationships with
financing partners, local communities and other stakeholders; (xix)
long-term positive demand trends and rough diamond demand
meaningfully exceeding supply; (xx) high depletion rates from
existing diamond mines; (xxi) global rough diamond production
remaining stable; (xxii) modest capital requirements post-2018 with
significant resource expansion available at marginal cost; (xxiii)
substantial resource upside within scope of mine plan; (xxiv)
opportunities for high grade ore acceleration and processing
expansion and realization of anticipated benefits therefrom; (xxv)
significant potential upside from targets identified for further
exploration; and (xxvi) limited cash income taxes payable over the
medium term.
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,
size distribution and quality of diamonds, kimberlite lithologies
and country rock content within the material identified as Mineral
Resources from that predicted; (ii) variations in rates of
recovery and levels of diamond breakage; (iii) the uncertainty
as to whether further exploration of exploration targets will
result in the targets being delineated as Mineral Resources;
(iv) risks associated with our dependence on the Renard
Diamond Mine and the limited operating history thereof; (v)
unfavorable developments in general economic conditions and in
world diamond markets; (vi) variations in diamond valuations
and fluctuations in diamond prices from those assumed; (vii)
insufficient demand and market acceptance of our diamonds; (viii)
risks associated with the production and increased consumer demand
for synthetic gem-quality diamonds; (ix) risks relating to
fluctuations in the Canadian dollar and other currencies relative
to the US dollar and variability in interest rates; (x) inaccuracy
of our estimates regarding future financing and capital
requirements and expenditures, significant additional future
capital needs and unavailability of additional financing and
capital, on reasonable terms, or at all; (xi) uncertainties related
to forecasts, costs and timing of the Corporation’s future
development plans, exploration, processing, production and mining
activities; (xii) increases in the costs of proposed capital,
operating and sustainable capital expenditures;
(xiii) increases in financing costs or adverse changes to the
terms of available financing, if any; (xiv) tax rates or
royalties being greater than assumed; (xv) uncertainty of mine
life extension potential and results of exploration in areas of
potential expansion of resources; (xvi) changes in development
or mining plans due to changes in other factors or exploration
results; (xvii) risks relating to the receipt of regulatory
approvals or the implementation of the existing Impact and Benefits
Agreement with aboriginal communities; (xviii) the failure to
secure and maintain skilled employees and maintain key
relationships with financing partners, local communities and other
stakeholders; (xix) risks associated with ongoing issues of diamond
breakage in the Renard Diamond Mine process plant and the failure
to realize the anticipated benefits from plant modification
measures within the anticipated timeframe and expected capital
cost, or at all; (xx) the negative market effects of recent Indian
demonetization and continued impact on pricing and demand; (xxi)
the effects of competition in the markets in which Stornoway
operates; (xxii) operational and infrastructure risks;
(xxiii) execution risk relating to the development of an
operating mine at the Renard Diamond Mine; (xxiv) the Corporation
being unable to meet its Subject Diamonds Interest delivery
obligations under the Purchase and Sale Agreement;
(xxv) future sales or issuances of Common Shares lowering the
Common Share price and diluting the interest of existing
shareholders; (xxvi) the risk of failure of information systems;
(xxvii) the risk that our insurance does not cover all potential
risks; (xxviii) the risks associated with our substantial
indebtedness and the failure to meet our debt service obligations;
and (xxix) the additional risk factors described herein and in
Stornoway’s annual and interim MD&A, its other disclosure
documents 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 new,
unforeseeable risks may arise from time to time.