November 15, 2012: Montreal, Quebec – Stornoway Diamond Corp. (Stock Profile – TSX: SWY) announced that its wholly-owned subsidiary Les Diamants Stornoway (Canada) Inc. has entered into a Framework Agreement and an associated Letter of Intent (collectively the “Agreement”) with the Government of Québec for the financing and completion of the Route 167 Extension under Stornoway’s direct management. The Agreement is designed to ensure timely road access to the Renard Diamond Project and the commencement of mine construction during 2013, as previously contemplated. Key features of the new Agreement are as follows:
- Stornoway to assume the completion of segments “C” and ”D” of the Route 167 Extension as a single lane mining grade road; and
- Québec to provide Stornoway with an unsecured credit facility of up to C$77m to complete the work, at an annual interest rate of 3.35% percent, amortized over 15 years, with a repayment schedule based upon planned commencement of commercial production at Renard.
In addition, and in support of Stornoway’s construction schedule for Renard, Québec has agreed that:
- The Québec Ministère des Transports (“MTQ”) shall continue with the construction of a winter road this season as previously planned, providing temporary road access to Renard by March 2013; and
- The Québec Ministère du Développement Durable, de l’Environnement, de la Faune et des Parcs and the MTQ shall transfer all relevant authorizations for Stornoway to commence mining road construction by April 2013.
As a result of the Agreement, Stornoway now anticipates first all-season vehicle access to the Renard project site by the 4th Quarter of 2013, compared to July 2013 previously.
Matt Manson, Stornoway’s President and CEO commented: “Today’s news represents the removal of a major element of uncertainty over the Renard Diamond Project. With Stornoway now responsible for the completion of the project’s access road, we will be in full control of our overall development schedule for the first time. The financing terms that we have negotiated to complete this work are beneficial to Stornoway, and are expected to have a minimal impact on the project’s overall valuation and financing capacity. This is an excellent example of government and the mining industry working in partnership to achieve a common goal.”
Mr. Manson continued: “Since Stornoway’s October 29th announcement of the potential for a delay in the completion of the Route 167 Extension, we have moved quickly to re-establish a viable plan for road access to Renard during 2013. The Agreement announced today achieves this, and allows us to continue moving forward with our project financing and development activities. This positive outcome will benefit our shareholders, our community partners and Québec in equal measure.”
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