“It’s Canada’s next diamond mine, and it’s basically ready to build now.” The burgeoning mine in question belongs to Stornoway Diamond Corp (TSE:SWY), whose chief executive, Matt Manson, is rather forthright on the subject of the company’s 100 per cent owned flagship asset, known as the Renard diamond project
Proactive Investors spoke to Manson a matter of days after the road to Stornoway’s production site had broken through; that is, right after the four segments composing the 240km long road – 97 km of which Stornoway was responsible for, the rest coming care of the ministry of transport of Quebec -- were all linked up.
It is an auspicious event, because “that’s the last thing to achieve before final project financing and starting construction of the mine”, Manson points out. The road is to allow year-round access to the site, and the schedule on which it was constructed bodes well too: the plan was to get the road open by the fourth quarter of this year, and the company managed that by the end of August.
Stornoway’s plans, as established in the January 2013 optimization study, include plant commissioning before the end of December 2015, with commercial production to be achieved by mid-2016.
From there, the numbers are dizzying, with the mine set to average about 1.7 million carats a year at about US$190/carat, yielding revenues between $300 and $450 million.
According to the NI 43-101 compliant report for the site released in July of this calendar year, total indicated resources stand at 27.09 million of contained carats, with a further 16.85 million carats classified as inferred and 25.7 million to 47.8 million carats of total exploration upside.
The resource estimate for the project, which is located approximately 350 km north of Chibougamau in the James Bay region of north-central Québec, showed a 14 per cent increase in indicated resources as compared to the previous report, by converting 2.3 million carats of near-surface inferred mineral resources to the indicated category.
Unlike almost every other commodity, Manson points out diamonds have gone up in value and “the supply and demand story for diamonds is very strong.”
And the case to be made for the calibre of the project itself is strong indeed.
“It has an 11-year life based on the reserve; it has a 20-year life based upon the resource, and it has a 30- to 40-year life based on how much we can reasonably see is there.”
Clearly, the Renard project is a development in which the government of Quebec sees some significant potential, as clearly demonstrated by the act of pledging $77 million to Stornoway for the completion of the company’s segment of the road. “They see this as an anchor project in the region that will employ multiple generations of local people,” says Manson, “so it’s a big deal.”
It is also set to be Quebec’s first diamond mine ever. And, as Manson says, only two other new diamond projects of any scale exist anywhere in the world: Gahcho Kue in the Northwest Territories and the Grib project in Russia, set to be in production by the end of this calendar year.
Certainly, the project is high profile in La Belle Province.
“We get a lot of media coverage in Quebec,” says Manson. “Everybody knows the project.”
And while media relations have had their role to play, Manson emphasizes the importance of Stornoway’s relationship with the local community.
The road itself is a case study in community engagement. As director of investor relations for the company, Orin Baranowsky, says, all the contractors