TORONTO (miningweekly.com) – The developer of Quebec’s sole diamond mine, Stornoway Diamond Corp, has secured a nonrevolving bridge credit facility of up to C$20-million with Ressources Québec, a subsidiary of Investissement Québec, Stornoway's largest shareholder.
Stornoway on Wednesday said the cash would be used to develop its flagship Renard project and for general corporate purposes, including costs relating to its ongoing project financing activities.
"This credit facility is intended to provide Stornoway with good funding flexibility as we pursue our project financing activities and begin the ramp-up to the capital programmes anticipated at Renard in 2014 and 2015,” president and CEO Matt Manson said.
He added that with the significant regulatory authorisations in hand and the Renard mine road now open for construction traffic, the company’s main objective was to conclude its principal project financing arrangements soon.
Under the credit facility, which Ressources Québec’s direct subsidiary Diaquem is facilitating, Stornoway would receive the $20-million in two tranches, comprising an initial tranche of $10-million, which was expected to be made available on Thursday, and a second tranche of up to $10-million. Each tranche would bear interest at 12% a year and would be repayable on March 28, 2014.
Stornoway would have the right to pay back up to half of the loan in shares at an issue price of 95% of the volume-weighted average price as of the interest payment date, and the remaining portion of interest payable on such amounts would be paid in cash.