Stornoway Announces Updated Renard Mine Plan and Mineral Reserve Estimate

30 March 2016

Provides First Production Guidance for FY2016 to FY2017

03/30/2016
Stornoway Diamond Corporation (TSX-SWY; the “Corporation” or “Stornoway”) is pleased to announce the results of an updated Mine Plan and Mineral Reserve estimate for the Renard Diamond Project.

Highlights (All quoted figures in CAD$ unless stated otherwise)

A 25% increase in the Probable Mineral Reserves from 17.9 to 22.3 million carats (representing 33.4 million tonnes at an average grade of 67 carats per hundred tonnes, or “cpht”);
An increase in the Mineral Reserve based mine life from 11 years to 14 years;
First ore processing forecast by the end of September 2016 and commercial production by December 31, 2016, a five month improvement on the starting project execution schedule;
Average diamond production in years 1 to 10 of 1.8 million carats per year compared to 1.6 million carats per year previously, with schedules of 1.9 million carats produced and 1.4 million carats sold to the end of 2017, increases of 24% and 57% respectively compared to the previous plan;
A scheduled increase in processing rate from 2.2 million tonnes per annum (6,000 tonnes per day) to 2.5 million tonnes per annum (7,000 tonnes per day) starting in 2018;
Initial capital cost estimate of $775 million within a life of mine capital cost estimate of $1,045 million;
Life of mine average operating costs of $56.20/tonne, or $84.37/carat;
Net revenue of $4,555 million yielding a real terms cash operating margin of $2,677 million or 59%, or $120 per carat, after allowance for royalties, taxes and the Renard diamond streaming agreement; and
Unlevered, stream affected, after tax NPV (7%) of $974 million as of January 1st 2016 calculated in real terms. NPV is calculated on Probable Mineral Reserves only, excluding any resource upside, utilizing “mark-to-market” diamond price estimates and before consideration for potential large diamond recovery.

View Details