Stornoway Makes $867 Million Deal to Fund Renard Project Construction
April 10, 14
(IDEX Online News) – Stornoway Diamond Corporation is well on its way to constructing the Renard Diamond Project in Quebec after entering into a financing agreement with three parties worth C$944 million ($867 million).
The deal has been agreed with Orion Co-Investments I Limited ($360 million), Ressources Québec (C$220 million [$201 million]), a wholly-owned subsidiary of Investissement Québec, and the Caisse de dépôt et placement du Québec (C$105 million [$96 million]).
The financing transactions are designed to provide full funding to project completion. Stornoway said in a press release that taken together, they represent the largest-ever project financing package for a publicly listed diamond company.
Stornoway also announced that it has entered into a mandate letter with Caterpillar Financial to arrange and underwrite an equipment financing facility for a minimum of $35 million for the purchase of certain mine equipment items manufactured by Caterpillar and others, including the project's mobile mining fleet.
"We are announcing today a comprehensive, one-shot financing package of C$944m designed to fund Renard through construction to the declaration of commercial production, and including all contingencies, capital escalation allowances, working capital requirements, and financing costs,” said Matt Manson, Stornoway’s president and CEO.
“With our permits in hand, and the Renard Mine Road and Aerodrome already in place and ready for use, the successful completion of these transactions will remove the last remaining financing risk for the project and allow principal project construction to commence. We look forward to presenting the financing of Québec's first diamond mine for approval by shareholders at a special meeting to be held in Montreal at the end of May 2014."
The Renard Diamond Project is located approximately 250 kilometers north of the Cree community of Mistissini and 350 kilometers north of Chibougamau in the James Bay region of north-central Québec.