Stornoway is seeking to restructure during what has been called “challenging times” for diamond markets. (Image: Stornoway Diamond Corp.)
QUEBEC – Stornoway Diamond Corp. and its material subsidiaries have arranged bridge financing to keep the Renard mine operating while the company undertakes a strategic review with the aim of restructuring its finances.
The Renard diamond project is the company’s only mine. Revenues for 2018 ($165.5 million) were down sharply from 2017 ($196.5 million). Operating expenses jumped in 2018 ($128.9 million) from 2017 ($87.9 million). Overall, the financials left Stornoway with a net loss of $329.4 million last year, compared to a net loss of only $114.2 million in 2017.
The financing includes $5.9 million, $2.8 million of which will be supplied by Osisko Gold Royalties, which has a diamond streaming agreement with Stornoway. There is another amount of up to $11.7 million available from Diaquem, an affiliate of Investissement Québec. Diaquem has also agreed to advance $1.9 million (estimated royalties) and $2.5 million (estimated taxes owing). The bridge facility carries an annual interest rate of 8.25%.
Stornoway has also entered into an agreement with holders of its convertible debentures to postpone interest payments until the end of 2019. The company has also received waivers from a number of provincial authorities to forego interest payments on loans, again until the end of this year.
Read the news release of June 11, 2019, posted at www.StornowayDiamonds.com for more details.