Stornoway Diamond Corp says Renard project design cost study finished

Stornoway Diamond Corp says a mine design and cost optimization study relating to its Renard project in north-central Québec has been finalized.

Among the other elements of the study are certain design changes since the publication of the Renard project’s feasibility study in November 2011.

Consequently, operating and capital cost estimates for the project have been revised, as has the production schedule.

The study calls for a revised initial capital cost of $746 million, including contingencies, in October 2012 terms, a decline of $49.6 million from the previous estimate provided in June 2011 terms.

It also revised up operating costs in October 2012 terms from the preceding estimate.

The exploration firm said there is an11-year reserve-based mine life with diamond production averaging 1.6 million carats/annum life of mine, real terms net revenue of $4.013 billion, and a cash operating margin of $2.671 billion.

Stornoway President and CEO Matt Manson said the study confirmed a vigorous project with strong cash flows.

"Since the release of the project’s Feasibility Study, we have been able to bring down our initial capital cost estimate with only a modest impact on the project’s operating costs. We are particularly pleased that the project has so successfully absorbed the kind of post-feasibility design adjustments and operating agreements that can negatively impact a project’s value.

"With our Mining Lease and Québec Certificate of Authorization in hand, and the Renard Mine Road under development, we can now move towards finalizing our project financing arrangements, and initiating project construction in the third quarter of this year.”

The study restates the project’s Probable Mineral Reserves at 17.9 million carats a reduction of 100,000 carats after allowing for revised mining dilution and ore recovery estimates.