JOHANNESBURG (miningweekly.com) – Construction mobilisation at Canadian diamond exploration and development company Stornoway Diamond Corporation’s Renard diamond project, in Québec, was proceeding rapidly with no major variances forecast, to date, against the planned schedule or budget, the company said on Monday.

The company announced the formal decision to proceed to project construction in July this year, following the closing of the project's comprehensive C$946-million financing package.

Construction, to date, had focused on site civil works, equipment procurement and camp construction.

Stornoway said that, following the completion of the Renard financing transaction, the company ended the three months ended July 31 with a strong balance sheet.

At July 31, Stornoway had cash and cash equivalents of C$438.3-million, and reported a loss for the first quarter of C$11.5-million, or $0.04 a share.

The company said the net loss for the period mainly related to finance costs, a foreign exchange gain, and the recognition of changes in the estimated fair value of embedded derivatives associated with the corporation’s financing and transaction fees attributed to these derivatives.

During the quarter, mine development capital expenditures for the Renard project were C$24.3-million against a total project capital cost estimate of C$81-million.

“Stornoway’s first quarter of fiscal 2015 has been the most impactful in the corporation’s history. We successfully closed the largest single project financing transaction for a publically listed diamond company comprised of debt, equity and stream, which is expected to fully fund the project to completion,” Stornoway president and CEO Matt Manson commented.

He added that the company’s drilling programme was also supporting its optimism on the resource potential of the Renard 2 kimberlite at depth.

“Stornoway’s first-quarter 2015 financial results reflect the transformative nature of our financing arrangements on the capital structure and resources of the corporation. Successive quarters will reflect the expenditure of our funded and committed cash resources on the project’s capital costs until commercial production is achieved, anticipated to occur during the second quarter of calendar 2017,” Manson concluded.