DIAMOND EXPLORATION – Renard likely to be Quebec’s first diamond mine

QUEBEC - Tucked away in the Otish Mountains lies the Foxtrot property that is shaping up to be Quebec's first diamo...
QUEBEC - Tucked away in the Otish Mountains lies the Foxtrot property that is shaping up to be Quebec's first diamond producer - at least joint venture partners STORNOWAY DIAMOND CORP. of Vancouver and SOQUEM of Quebec City are working diligently to make it so.

Work at the property began in 1996 after SOQUEM and Ashton Mining of Vancouver entered into a 50:50 joint venture. Exploration uncovered the Renard kimberlite pipes in 2001; the Lynx dikes in 2003. Bulk sampling began in 2005, and by the end of 2006 over $80 million had been spent. Stornoway took over Ashton's role when it acquired the company in early 2007.

As operator, Stornoway reported finding a 15.46-ct diamond this July. It is described as a light off-colour gem octahedron. This exceptional stone was recovered from the Renard 2 kimberlite along with 14 other large stones that weighed from 2.08 to 8.42 ct.

Stornoway has had nothing but good news to report from Foxtrot. A total of 1,601 ct of diamonds was recovered from Renard 2. An open market valuation of a 6,000-ct parcel is underway. Given that Renard 2 is yielding a large number of stones over 2.00 ct, almost all of which are gem quality, the per carat value can be expected to be high.

Already Stornoway and SOQUEM have begun the pre-feasibility study for a mine at Renard. It is to be conducted by AMEC Americas and Agnico-Eagle Mines (Stornoway's largest shareholder, holding 14%). Depending on results and approval by the joint venture, a second pre-feasibility study could be launched between September 2007 and March 2008.

If the studies indicate that the project continues to look positive, the next steps will be an impact study and permitting, with construction beginning perhaps in 2011. Production could begin as early as the first quarter of 2012 and continue for a period of 10 to 15 years.

Stornoway has not yet put a price tag on development of the Renard mine, but said the figures analysts are using - $200 million to $300 million - are in the ballpark. The project will include a recovery plant with an initial open pit followed by underground mining.

Renard 2 is one of nine kimberlites on the property. There is also a Renard 1, and both are interpreted to be steep-sided pipes with irregular to elongate shapes. Where they reach the surface they are composed mainly of diatreme-like kimberlite breccia lithology and hypabyssal macrocrystic kimberlite material. Other dikesthe Lynx, Hibou and North Anomalyare interpreted to be intrusions of kimberlitic material that did not reach the surface during emplacement. The remaining kimberlites have not yet been explored thoroughly.


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