Canadian Mining Journal


DIAMONDS: Bridge loan gives Stornoway some breathing room

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 for more details.

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