Name of the project
Renard 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. Diamond 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 diamond mine has fully transitioned to underground mining, its new ore sorting plant is operational and the mine is set for higher processing rates, grades and carat recoveries in the second half of the year.

The transition from openpit operations and the completion of the ore sorting plant, which was installed to improve breakage issues, also marks the end of the principal construction capital spending at Renard.

Mining at Renard 3 openpit concluded in April and the ramp-up of underground mine production progressed steadily during the quarter, with mined underground tonnes averaging 3 864 t/d in June.

The new ore sorting plant, which was commissioned in March, is fully operational and the diamonds recovered since sorting started exhibit low levels of breakage, despite the highly abrasive characteristics of the ore processed through the plant, Stornoway has said.

“We have been particularly encouraged by the performance of the new ore sorting plant. Initial diamond results are encouraging, and given the volume and quality of the waste that is being rejected we see the potential for processing capacity in our plant beyond its current nameplate rating. Exploiting this potential new capacity will involve the development of a modified mine plan to support the accelerated mining required, and permitting,” CEO Matt Manson has said.

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.