Name of the project
Renard underground diamond project.

Location
Quebec, Canada.

Client
Stornoway Diamonds Corp.

Project Description
The project is located about 250 km north of the Cree community of Mistissini and 350 km north of Chibougamau, in the James Bay region of north-central Quebec.

The project hosts probable mineral reserves, as defined under National Instrument 43-101, of 22.3-million carats. The reserves are derived from 30.2-million carats of indicated mineral resources.

The November 2011 feasibility study included ramp and shaft access to the Renard underground mine. According to the optimisation study released in January 2013, shaft sinking will be deferred until later in the mine life, and access to the underground mine will be through a ramp only.

The shaft will be developed to a depth of 610 m, sufficient to extract all mineral reserves and the inferred mineral resources. It will also be enlarged to accommodate the planned production rate of 6 000 t/d of ore.

Ore will be hauled to surface by 60 t trucks, with ramp ventilation capacity and surface maintenance facilities expanded to accommodate the increased fleet. Plant capacity remains at 6 000 t/d, expandable to 7 000 t/d. Power requirements, provided through on-site diesel power generation, are expected to total 12.2 MW during operations.

The optimisation study further states that diamond production in years 1 and 2 will be derived predominantly from the Renard 2/3 openpit. Production from the underground mine will start during Year 2. As indicated in the feasibility study, underground ore will be mined, with blast-hole shrinkage on the 250 m, 430 m and 610 m development levels, and waste backfill from surface. The optimisation study contains a refined draw-point design and a mining sequence, incorporating a panel-retreat method to better ensure geomechanical stability and mitigate the unexpected onset of natural caving.

According to a revised mine plan and technical report, dated March 2016, Renard is expected to produce an average of 1.8-million carats a year over the first ten years of mining at an average valuation of $155/ct. The mine will produce 1.6-million carats a year for the remainder of its 14-year mine life.

An expansion to 7 000 t/d, or 2.52-million tonnes a year, is scheduled for 2018 based on achieving an 83.5% utilisation and an additional 2% throughput increase.

The additional ore feed will be derived from the Renard 65 kimberlite, where openpit mining operations for sourcing construction aggregate have been under way since 2014.

Renard 65 will provide supplementary ore feed from 2018 to 2029 from an openpit developed to a depth of 155 m, with a stripping ratio of 2.11.

No underground mining is currently contemplated at Renard 65.

Processing of low-grade stockpiles derived from the mining of CRB and CRB2a in the Renard 2/3 openpit will be available to extend the mine life to 2030, which would be expected to be deferred upon the addition of further mineral resources to the mine plan. 

Once complete, the project will be the first diamond mine in Quebec, and one of only six in Canada.

Potential Job Creation
The project will employ about 600 people.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at a 7% discount rate, of $974-million, as at January 1, 2016.

Value
The initial capital cost estimate of the project is C$775-million and the life-of-mine capital cost estimate is C$1.05-billion.

Duration
Construction began on July 10, 2014, following the completion of a C$946-million project financing transaction.

The project achieved commercial production on January 1, 2017.

Latest Developments
The Renard underground mine has achieved its full design capacity of 6 000 t/d, with Stornoway Diamond Corp declaring the underground ramp-up completed.

Over a 20-day period ended on August 29, ore mucked and trucked to surface averaged 6 039 t/d against a budgeted design capacity of 6 000 t/d.

Ore production is being sourced from 16 active draw-points developed on four mining panels at the 290 m level of the Renard 2 kimberlite.

Ore processing during this period averaged 7 085 t/d, with underground feed supplemented with ore derived from the Renard 65 openpit, as planned.

Meanwhile, the assisted block cave is developing well and, as expected, the grade of diamond recoveries has increased as Sornoway has progressed from the initial mining panel at the margin of Renard 2 into the panels closer to the centre of the orebody. Mining and processing for the remainder of the year will be focused on ore mucked from these higher quality panels.

Key Contracts and Suppliers
SNC-Lavalin (engineering, procurement and construction management).

On Budget and on Time?
The project is on schedule.

Contact Details for Project Information
Stornoway Diamonds director of investor relations Orin Baranowsky, tel +1 416 304 1026 or email info@stornowaydiamonds.com.