Stornoway Diamond Corporation (TSX:SWY)
(the “Corporation” or “Stornoway”) is pleased to
provide an overview of exploration programs planned for 2018. With
the successful construction and ramp-up of the Renard Diamond
Project completed, the board of directors of Stornoway has approved
a program of both brownfield and grassroots exploration aimed at
both new discoveries, and the development of the existing resource
upside potential at Renard. A total budget of $4.6 million has been
allocated to complete this work.
Highlights of the 2018 program include:
- A drill program of 100 targets on the Renard Property aimed at
new kimberlite discovery;
- 5,000 meters of delineation drilling on Renard 3 aimed at the
conversion of high grade mineral resources and their acceleration
in the Renard mine plan; and
- Grassroots sampling and drilling on new claim acquisitions in
both eastern and western Canada.
Matt Manson, President and CEO commented: “In
2018, Stornoway is turning with a renewed focus to exploration and
new project development. Our objective is both brownfield discovery
and resource expansion at our existing Renard Mine, and new
exploration geared towards the creation of a viable project
pipeline for the future. The bulk of the 2018 exploration budget
will be allocated to drilling. Since the early 1990s, Stornoway’s
exploration team has been involved, individually or collectively,
in the discovery of more than 200 kimberlites in Canada. Our
experiences include the discovery or furtherance of the Diavik,
Snap Lake and Renard mines, as well as the Aviat, Churchill, Pikoo,
Qilalugaq, Coronation Gulf, Wales Island, Temiscaming Attawapiskat,
Buffalo Hills and, most recently, Adamantin kimberlite fields. We
are particularly excited about the potential for additional
brownfield discoveries at Renard, given the large number of targets
that remain untested and the unusually small size of the current
kimberlite cluster.”
Renard Property “100 Target” Drill Program
In 2018, Stornoway will test 100 geophysical
anomalies on the Renard Property identified from the recent
reprocessing, compilation and interpretation of numerous historical
airborne and ground geophysical surveys. These data have been
integrated with geochemical results from some 4,700 historical
surficial till samples to generate a list of high priority targets.
Known kimberlite pipes at Renard have prominent geophysical
signatures in a locally quiet background, a situation not common
elsewhere on the property. The focus of the late winter-early
spring 2018 program is to look for pipe-like kimberlite bodies with
the size and tonnage potential to provide meaningful new sources of
ore-feed to the centrally located Renard mine process plant. A
budget of $3 million has been allocated to complete this work.
The Renard Property comprises more than 600
mineral claims representing about 33,600 ha of ground, and extends
10-12 km in all directions around the producing Renard Diamond
Mine. In addition to the nine known kimberlite pipes in the Renard
core area (five of which are in the present mine plan), there are
at least eleven additional kimberlite dykes on the property. No
systematic exploration work has been conducted on the Renard
Property since 2007-08 when mine development activities commenced.
Excluding drill holes on the known kimberlite pipes and dykes, only
about 40 targets have been previously tested throughout the entire
property.
The 100 targets will be tested with light
reverse circulation drill rigs that can be moved easily from site
to site. A similar exploration approach was applied over the last
two years at the Adamantin, Lustre and Eclat properties, located
about 100km south of Renard which resulted in the discovery of
eleven new kimberlite bodies.
The 100 target drill program is expected to
commence in March, with micro-diamond assessment and additional
delineation drilling to follow upon any discovery.
Renard Resource Development
A separate program comprising 5,000 meters of
underground drilling is planned to test the depth potential of the
Renard 3 kimberlite below the base of the currently defined Mineral
Reserves. The objective of this drill program is the conversion of
Inferred Mineral Resources and Targets for Further Exploration
(“TFFE”) to Indicated Mineral Resource and, if warranted, new
Mineral Reserves, with a view to the acceleration and expansion of
underground mining of the high grade Renard 3 kimberlite in the
Renard mine plan. A budget of $0.6 million has been allocated to
complete this work.
In the current statement of Renard Mineral
Reserves and Resources, effective December 31, 2016, Renard 3
comprised a Proven and Probable Mineral Reserve of 1.85 million
carats (comprising 2.08 million tonnes at an average grade of 79
carats per hundred tonnes; “cpht”) to a depth of 255 meters. The
current Renard mine plan, referred to as the March 2016 Updated
Mine Plan, contemplates open pit mining at Renard 3, which is now
nearing completion, and a single stope of underground mining
between the years 2026 and 2027.
However, the company believes significant
opportunity exists to accelerate the underground mining of Renard
3, giving the benefit of higher grade mine feed earlier than
planned, and to expand it to greater depths, giving the benefit of
mine life extension.
The initial focus of the 2018 delineation drill
program will be the area of currently defined Inferred Mineral
Resources at Renard 3 of 0.61 million carats (comprising 0.54
million tonnes at 112 cpht) between 255 meters and 405 meters
depth. The drilling will take advantage of the Renard underground
mine ramp which has now been developed to a depth of 310
meters.
In addition, Stornoway will seek to target the
extensive resource potential below the current Inferred Mineral
Resources. No targeted drilling at Renard 3 currently exists below
a depth of 405 meters. However, in a 2015 deep directional drill
program undertaken on the Renard 2 kimberlite, Renard 3 was
interpreted to have been intersected fortuitously over 126.6 meters
at a vertical depth of approximately 1,000m. The implied true width
of this intersection was a minimum 47 meters, larger than in the
area of the current Inferred Mineral Resources. This represents
over 500 meters of untested exploration potential in the
intervening undrilled levels, and a Target for Further Exploration
of between 3.5 and 6.4 million carats (comprising 3.4 to 3.8
million tonnes between 105 and 168 cpht). Any Renard 3 Mineral
Resource delineated above 700 meters depth is potentially mineable
with the existing and currently planned underground mine
infrastructure.
At a depth of 1,000 meters, Renard 3 appears to
have a modest westerly plunge, implying a potential deep
convergence of the Renard 2 and Renard 3 kimberlites. Exploration
of both ore bodies below the depth of the currently planned ramp
will be a future exploration priority at the Renard Mine.
Canadian Grassroots Exploration
Stornoway maintains an active portfolio of
grassroots diamond exploration projects within Canada. In 2018,
Stornoway expects to actively pursue programs of sampling,
geological and geophysical surveys, land acquisition and drilling,
where warranted, on multiple properties in eastern and western
Canada. A budget of $1 million has been allocated for this
work.
Of note, Stornoway recently acquired claims near
the town of Témiscaming in western Québec, where a review of
historical till sampling records suggests the presence of diamond
bearing kimberlite. Follow up till sampling was completed in
2017, and a targeted airborne geophysical survey was completed in
December. This work has confirmed geophysical targets consistent
with multiple kimberlite occurrences, supported by kimberlitic
indicator mineral anomalies. This project, referred to as the “MET”
project, merits drill testing, subject to permitting and local
consultation.
About the Renard Diamond
Mine
The Renard Diamond Mine is Québec’s first
producing diamond mine and Canada’s sixth. It is located
approximately 250 km north of the Cree community of Mistissini and
350 km north of Chibougamau in the James Bay region of
north-central Québec. Construction on the project commenced on July
10, 2014, and commercial production was declared on January 1,
2017. Average annual diamond production is forecast at 1.8 million
carats per annum over the first 10 years of mining. Readers are
referred to the technical report dated January 11, 2016, in respect
of the September 2015 Mineral Resource estimate, and the technical
report dated March 30, 2016, in respect of the March 2016 Updated
Mine Plan and Mineral Reserve Estimate for further details and
assumptions relating to the project.
Qualified Persons
Disclosure of a scientific or technical nature
in this press release was prepared under the supervision of M.
Patrick Godin, P.Eng. (Québec), Chief Operating Officer and Mr.
Robin Hopkins, P.Geol. (NT/NU), Vice President, Exploration, both
“qualified persons” under National Instrument (“NI”) 43-101. Mr.
Hopkins is responsible for the planning and execution of
Stornoway’s exploration programs.
About Stornoway Diamond
Corporation
Stornoway is a leading Canadian diamond
exploration and production company listed on the Toronto Stock
Exchange under the symbol SWY and headquartered in Montreal. A
growth oriented company, Stornoway owns a 100% interest in the
world-class Renard Mine, Québec’s first diamond mine.
On behalf of the BoardSTORNOWAY DIAMOND
CORPORATION/s/ “Matt Manson”Matt MansonPresident and Chief
Executive Officer
For more information, please contact Matt Manson
(President and CEO) at 416-304-1026 x2101or Orin Baranowsky (CFO)
at 416-304-1026 x2103 or Jodi Hackett (Manager, Communications) at
416-304-1026 x2104 or toll free at 1-877-331-2232
Pour plus d’information, veuillez contacter M.
Ghislain Poirier, Vice-président Affaires publiques de
Stornoway au 418-254-6550, gpoirier@stornowaydiamonds.com
** Website: www.stornowaydiamonds.com Email:
info@stornowaydiamonds.com **
FORWARD-LOOKING STATEMENTS
This document contains forward-looking
information (as defined in National Instrument 51 102 – Continuous
Disclosure Obligations) and forward-looking statements within the
meaning of Canadian securities legislation and the United States
Private Securities Litigation Reform Act of 1995 (collectively
referred to herein as “forward-looking information” or
“forward-looking statements”). These forward-looking statements are
made as of the date of this document and, the Corporation does not
intend, and does not assume any obligation, to update these
forward-looking statements, except as required by law.
These forward-looking statements relate to
future events or future performance and include, among others,
statements with respect to Stornoway’s objectives for the ensuing
year, our medium and long-term goals, and strategies to achieve
those objectives and goals, as well as statements with respect to
our management’s beliefs, plans, objectives, expectations,
estimates, intentions and future outlook and anticipated events or
results. Although management considers these
assumptions to be reasonable based on information currently
available to it, they may prove to be incorrect.
Forward-looking statements made in this document
include, but are not limited to, statements with respect to: (i)
the amount of Mineral Reserves, Mineral Resources and exploration
targets; (ii) the estimated amount of future production over any
period; (iii) net present value and internal rates of return of the
mining operation; (iv) assumptions relating to recovered grade,
size distribution and quality of diamonds, average ore recovery,
internal dilution, mining dilution and other mining parameters set
out in the 2016 Technical Report as well as levels of diamond
breakage; (v) assumptions relating to gross revenues,
operating cash flows and other revenue metrics set out in the 2016
Technical Report, growth in diamond sales, cost of sales, cash cost
of production, gross margins estimates, planned and projected
capital expenditure, liquidity and working capital requirements;
(vi) mine expansion potential and expected mine life; (vii)
expected time frames for completion of permitting and regulatory
approvals related to ongoing construction activities at the
Renard Diamond Mine; (viii) the expected time frames for the
completion of the open pit and underground mine at the Renard
Diamond Mine; (ix) the expected financial obligations or
costs incurred by Stornoway in connection with the ongoing
development of the Renard Diamond Mine; (x) mining, development,
production, processing and exploration rates, progress and plans,
as compared to schedule and budget; (xi) future exploration plans;
(xii) expectations concerning trends in the diamond industry and
future market prices for rough diamonds; (xiii) the economic
benefits of using liquefied natural gas rather than diesel for
power generation; (xiv) sources of and anticipated financing
requirements; (xv) the ability to meet Subject Diamonds Interest
delivery obligations under the Renard Stream Agreement; (xvii) the
foreign exchange rate between the US dollar and the Canadian
dollar; and (xvi) the anticipated benefits from recently approved
plant modification measures and the anticipated timeframe and
expected capital cost thereof. Any statements that express or
involve discussions with respect to predictions, expectations,
beliefs, plans, projections, objectives, assumptions or future
events or performance (often, but not always, using words or
phrases such as “expects”, “anticipates”, “plans”, “projects”,
“estimates”, “assumes”, “intends”, “strategy”, “goals”,
“objectives”, “schedule” or variations thereof or stating that
certain actions, events or results “may”, “could”, “would”, “might”
or “will” be taken, occur or be achieved, or the negative of any of
these terms and similar expressions) are not statements of
historical fact and may be forward-looking statements.
Forward-looking statements are made based upon
certain assumptions by Stornoway or its consultants and other
important factors that, if untrue, could cause the actual results,
performances or achievements of Stornoway to be materially
different from future results, performances or achievements
expressed or implied by such statements. Such statements and
information are based on numerous assumptions regarding present and
future business prospects and strategies and the environment in
which Stornoway will operate in the future, including the recovered
grade, size distribution and quality of diamonds, average ore
recovery, internal dilution, and levels of diamond breakage, the
price of diamonds, anticipated costs and Stornoway’s ability to
achieve its goals, anticipated financial performance, regulatory
developments, development plans, exploration, development and
mining activities and commitments, and the foreign exchange rate
between the US and Canadian dollars. Although management considers
its assumptions on such matters to be reasonable based on
information currently available to it, they may prove to be
incorrect. Certain important assumptions by Stornoway or its
consultants in making forward-looking statements include, but are
not limited to: (i) required capital investment and estimated
workforce requirements; (ii) estimates of net present value and
internal rates of return; (iii) recovered grade, size distribution
and quality of diamonds, average ore recovery, internal dilution,
mining dilution and other mining parameters set out in the 2016
Technical Report as well as levels of diamond breakage, (iv)
receipt of regulatory approvals on acceptable terms within commonly
experienced time frames; (v) anticipated timelines for ramp-up and
achievement of nameplate capacity at the Renard Diamond Mine, (vi)
anticipated timelines for the development of an open pit and
underground mine at the Renard Diamond Mine; (vii) anticipated
geological formations; (viii) market prices for rough diamonds and
their potential impact on the Renard Diamond Mine; (ix) the
satisfaction or waiver of all conditions under the Senior Secured
Loan and the remaining Equipment Facility to allow the Corporation
to draw on the funding available under those financing elements;
(x) Stornoway’s interpretation of the geological drill data
collected and its potential impact on stated Mineral Resources and
mine life; (xi) future exploration plans and objectives; (xii) the
Corporation’s ability to meet its Subject Diamonds Interest
delivery obligations under the Purchase and Sale Agreement; and
(xiii) the continued strength of the US dollar against the Canadian
dollar.
By their very nature, forward-looking statements
involve inherent risks and uncertainties, both general and
specific, and risks exist that estimates, forecasts, projections
and other forward-looking statements will not be achieved or that
assumptions do not reflect future experience. We caution readers
not to place undue reliance on these forward- looking statements as
a number of important risk factors could cause the actual outcomes
to differ materially from the beliefs, plans, objectives,
expectations, anticipations, estimates, assumptions and intentions
expressed in such forward-looking statements. These risk factors
may be generally stated as the risk that the assumptions and
estimates expressed above do not occur, including the assumption in
many forward-looking statements that other forward-looking
statements will be correct, but specifically include, without
limitation: (i) risks relating to variations in the grade, size
distribution and quality of diamonds, kimberlite lithologies and
country rock content within the material identified as Mineral
Resources from that predicted; (ii) variations in rates of recovery
and levels of diamond breakage; (iii) the uncertainty as to whether
further exploration of exploration targets will result in the
targets being delineated as Mineral Resources; (iv) developments in
world diamond markets; (v) slower increases in diamond valuations
than assumed; (vi) risks relating to fluctuations in the Canadian
dollar and other currencies relative to the US dollar; (vii)
increases in the costs of proposed capital, operating and
sustainable capital expenditures; (viii) increases in financing
costs or adverse changes to the terms of available financing, if
any; (ix) tax rates or royalties being greater than assumed; (x)
uncertainty of results of exploration in areas of potential
expansion of resources; (xi) changes in development or mining plans
due to changes in other factors or exploration results; (xii)
risks relating to the receipt of regulatory approvals or the
implementation of the existing Impact and Benefits Agreement with
aboriginal communities; (xiii) the effects of competition in the
markets in which Stornoway operates; (xiv) operational and
infrastructure risks; (xv) execution risk relating to the
development of an operating mine at the Renard Diamond Mine; (xvi)
failure to satisfy the conditions to the funding or availability,
as the case may require, of the Senior Secured Loan and the
Equipment Facility; (xvii) changes in the terms of the Forward Sale
of Diamonds, the Senior Secured Loan or the Equipment Facility;
(xviii) the funds of the Senior Secured Loan or the Equipment
Facility not being available to the Corporation; (xix) the
Corporation being unable to meet its Subject Diamonds Interest
delivery obligations under the Purchase and Sale Agreement; (xx)
future sales or issuances of Common Shares lowering the Common
Share price and diluting the interest of existing shareholders; and
(xxi) the additional risk factors described herein and in
Stornoway’s annual and interim MD&A’s, most recently filed AIF,
its other disclosure documents and Stornoway’s anticipation of and
success in managing the foregoing risks. Stornoway cautions that
the foregoing list of factors that may affect future results is not
exhaustive and new, unforeseeable risks may arise from time to
time, and (xxi) the additional risk factors described herein and in
Stornoway’s annual and interim MD&A’s, most recently filed AIF,
its other disclosure documents and Stornoway’s anticipation of and
success in managing the foregoing risks. Stornoway cautions that
the foregoing list of factors that may affect future results is not
exhaustive and new, unforeseeable risks may arise from time to
time.