TORONTO (miningweekly.com) – The TSX-listed stock of Quebec-focused precious gem project developer Stornoway Diamond Corp gained as much as C$0.11 apiece on Friday, after the company announced that it had completed two financings as part of a series of transactions totalling C$944-million.
The Montreal-based company, which is developing the Renard diamond project, slated to become the province’s only large-scale diamond mine, said that it had completed a public offering of 188.6-million subscription receipts at C$0.70 apiece for gross proceeds of C$132.02-million.
The subscription receipts were expected to start trading on the TSX on Friday, under the ticker symbol SWY.R.
Subscription shares carry the right to be exchanged for common stock of a firm at a predetermined price and within a specific period.
Stornoway also closed private placements comprising 345.5-million subscription receipts at C$0.70 apiece, for gross proceeds of C$241.88-million.
The private placements consisted of subscriptions of 171.25-million subscription receipts by Orion Co-Investments I, 142.85-million subscription receipts by Ressources Quebec, a subsidiary of Investissement Quebec, and 31.4-million subscription receipts by Caisse de depot et placement du Quebec.
“The successful closing of the public offering of subscription receipts is an important milestone for Stornoway, and a precondition for the completion of the overall project financing agreement announced on April 9.
“This agreement contemplates financing commitments to fully fund the Renard project through construction to the declaration of commercial production, including all contingencies, capital escalation allowances, working capital requirements, and financing costs,” Stornoway president and CEO Matt Manson said.
Shareholders would vote on June 26 to implement the balance of the funding package, comprising equity, debt and a streaming agreement that Stornoway had arranged. Construction of the Renard project is expected to start shortly after the vote.
The net proceeds of the public offering and the private placements would be held in escrow, pending completing the financing transactions of the agreement.
Once the escrow-release conditions had been met, the holders of the company’s subscription receipts would receive one-and-a-half share purchase warrants of the company’s stock, and holders of private placement subscription receipts would receive one Stornoway common share for each receipt held.
Should shareholders vote against implementing the financing agreements, the subscription receipts shall be cancelled and shareholders refunded.
The company’s stock traded at C$0.75 apiece early on Friday afternoon, somewhat lower than earlier in the day.