LONGUEUIL, Québec, Jan. 18, 2018 (GLOBE NEWSWIRE) -- 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 Board
STORNOWAY DIAMOND CORPORATION
/s/ “Matt Manson”
Matt Manson
President and Chief Executive Officer
For more information, please contact Matt Manson (President and CEO) at 416-304-1026 x2101
or 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.