TORONTO (miningweekly.com) – Quebec-based project builder Stornoway Diamond on Thursday completed the drawdown of the second $80-million tranche of diamond stream funding from Orion Mine Finance, the Caisse de dépôt et placement du Québec (CDPQ) and Blackstone Tactical Opportunities.
Under Stornoway's C$946-million project financing transaction, which closed on July 8, 2014, Orion and the CDPQ would pay $250-million in upfront stream payments in three tranches, scheduled for March, September and March 2016.
Each tranche would become available for drawdown after Stornoway had satisfied certain terms and conditions, including the independent certification of construction progress at the Renard diamond project and its cost to complete being within plan. With these conditions having been met, the second stream tranche had been funded on schedule, Stornoway advised.
The company gained a C$189-million windfall, owing to the exchange rate of $1.336 being significantly higher than the $1.10 contemplated when the agreement was formalised.
As of July 31, Stornoway's cash, cash equivalents and short-term investments stood at C$270-million. The company advised that its cash resources were sufficient to cover all planned mine development expenses, financing and corporate costs into 2016.
After the third tranche had been funded, Stornoway planned to draw on a C$100-million senior secured loan in late 2016 to complete mine development at Renard.
As at August 30, overall construction progress at the project stood at 41%, compared with planned progress of 37.1%. The company expected to execute the project within the capital budget of C$811-million, including contingencies and escalation allowances.
Blackstone had in April acquired a minority position in the Renard diamond stream from Orion through a secondary market transaction.