TORONTO (miningweekly.com) – Canadian diamond hopeful Stornoway Diamond and partner Société générale de financement du Quebec (SGF) have formally begun a feasibility study for their Renard project, in north-central Quebec, and will also look at building a power line to connect the project to the local hydroelectric network.

Stornoway published an updated preliminary assessment for Renard in March, and the company has said it wants to be ready for a production decision by the end of 2011.

To get to that point, the partners have drawn up a two-year programme, including work completed since January 2010, which they expect will cost $28,3-million in total.

A mine feasibility study, incorporating both openpit and underground mining scenarios, will also look at increasing the processing capacity from 5 000 t/d up to 7 000 t/d.

The programme will also include the completion of an environmental- and social-impact assessment, mine permitting, community consultation and the negotiation of an impacts and benefits agreement.

If all goes to plan, mine construction could begin in 2012, with production to start before the end of 2013.

The updated Renard preliminary assessment released by Stornoway in March suggested a potential mine life of at least 25 years based on a processing capacity of 5 000 t/d.

Stornoway and SGF also plan to conduct a separate feasibility study and environmental assessment for a power line to connect the project to the Hydro-Quebec James Bay hydroelectric network.

“This power line has the potential to greatly reduce the project's operating costs, reduce its overall environmental footprint, and to insulate the project from future fuel cost escalation,” Stornoway CEO Matt Manson said on Thursday.

The study will be financed by Stornoway and SGF's SOQUEM, and undertaken by Hydro Quebec.

After the significant increase in the project's resource this year, and "given the very low rates available for hydroelectric power within Québec, such a power line has the potential to reduce mine operating costs significantly, extend the mine life by reducing the effective resource cut-off grade, insulate the project from future fuel cost escalation, and reduce the project's environmental impact with lower carbon emissions and fewer loads of fuel trucked to site", Stornoway said.