JOHANNESBURG (miningweekly.com) – Stornoway Diamond Corp, wanting to build Quebec’s first diamond mine, has secured a $20-million loan from its biggest shareholder, Diaquem, and development capital fund Fonds de solidarité FTQ runs, the TSX-listed junior said on Friday.
Stornoway, which in April raised a similar amount in a share sale, said it would put the money into pre-development work at the Renard project, including detailed engineering and ordering long-lead mining equipment.
“We are particularly pleased to be able to announce the support of the Fonds in the development of the project, and the continued support of our major shareholder, Investissement Quebec,” Stornoway CEO Matt Manson said in a statement.
Investissement Quebec is the province’s investment vehicle, and owns 25% of Stornoway.
“Our objective is to continue to move Renard ahead on schedule as we work to complete project permitting and senior project financing,” Manson added in a statement.
While the debt facility avoided significant equity dilution, which he said was “respectful of shareholder value”, it did come attached with 15-million share purchase warrants for the lenders.
Each warrant allows the owner to buy a Stornoway share for $1.21 up to five years after the deal closes. That’s a 40% premium to the 20-day volume weighted average price of the stock on the TSX before the deal was announced on Friday.
Stornoway plans to start building Renard in August next year. The mine will produce an average 1.7-million carats yearly, at a capital cost of around C$800-million, according to the results of a feasibility study the company announced in November.