Stornoway To Proceed With Liquefied Natural Gas (LNG) Power Plant For Renard Diamond Project

NEWS RELEASE.

October 21, 2013: Montreal, Quebec – Stornoway Diamond Corporation (Stock Profile – TSX:SWY) reports the results of a recent feasibility study on the viability of a Liquefied Natural Gas (“LNG”) fuelled power plant for the Renard Diamond Project. The study was authored by SNC-Lavalin Inc. and AMEC America Ltd. under the Renard Project EPCM joint venture, and demonstrates substantial benefits to the project in terms of annual operating cost and environmental emissions compared to the currently planned diesel gen-set option. Highlights of the study are as follows:

  • Annual operating cost reductions of between $8 million and $10 million over the initial 11 year mine life, representing a life of mine operating cost saving of $89 million, or 6.6%.
  • Incremental capital cost of only $2.6 million over the cost of diesel gen-sets, representing a net payback of 4 months.
  • An estimated reduction in greenhouse gas emissions of 43%, with significant reductions in NO2 and SO2.
  • Stable LNG local supply market based on existing commercial distribution network within Québec.

Matt Manson, President and CEO, commented: “Since the release of the Renard Diamond Project Feasibility Study in November 2011 and the subsequent Optimization Study in January 2013, we have been investigating more efficient alternatives for power supply at the project compared to the traditional diesel option contained within the current execution plan. A July 2012 Hydro-Québec feasibility study into a powerline for the project demonstrated only a marginal economic benefit of using grid power owing to the high cost for powerline construction. The LNG option now provides us with a much more attractive way forward, with off-the-shelf technology, a positive long-term supply outlook, a much smaller environmental footprint and immediate economic benefits for the project through substantially reduced operating costs. This option is made possible to us because, with an all-season road, we are able to receive regular shipments of liquefied gas from the existing commercial distribution network in Québec, without the need for expensive high-capacity on-site storage facilities. The LNG study has been completed in time to have it incorporated into the final project execution plan prior to the planned commencement of project construction in 2014.”

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