QUEBEC – Stornoway Diamond Corp. of Vancouver is buying out its partner in the Renard diamond project in the James Bay Lowlands. It is purchasing the 50% interest currently owned by Diaquem, a subsidiary of Soquem, itself a subsidiary of Société générale de financement du Québec (SGF). In return SGF will facilitate a future project debt financing of at least $100 million.
A feasibility study, due by the end of 2011, is underway. Current planning envisions a 25-year mine life with annual production of 1.6 million ct. Stornoway is issuing 57.4 million shares to raise $35 million that will be used to partially fund the feasibility study.
After the $35 million is secured, Stornoway will issue to Diaquem new common voting shares equal to 25% of Stornoway’s issued and outstanding common shares. Stornoway will also issue new non-voting shares to Diaquem, giving Diadem a 37% interest in Stornoway equal to 37% on a fully diluted basis. Diadem will appoint three new directors to Stornoway’s board, bringing the total to 11 members.
The agreement is expected to close on Jan. 6, 2011, and is subject to shareholder approval. Stornoway will also ask shareholders to approve a five-for-one share consolidation. Details are available at www.StornowayDiamonds.com.