Stornoway Diamond Corporation closed a private placement with the explorer's largest shareholder, Diaquem Inc., an indirect wholly-owned subsidiary of Investissement Quebec, for aggregate gross proceeds of $5,097,950. The placement was completed as a result of Diaquem exercising its pre-emptive right, and upon the same terms as the units issued by Stornoway pursuant to a public offering, which closed on March 28, 2012. As a result, Diaquem now holds 25 percent of Stornoway's issued and outstanding common shares.
Proceeds from the private placement will be used to fund pre-development expenditures at the Renard diamond project this year and for general corporate purposes. Probable mineral reserves at Renard stand at 18 million carats, with an additional 17.5 million carats classified as inferred mineral resources, and 23.5 to 48.5 million carats are classified as non-resource exploration upside. All kimberlites remain open at depth and pre-production capital costs stand at $802 million, with a life-of-mine operating cost of $54.71 per tonne giving a 68 percent operating margin over an initial 11 year mine life. Production is scheduled to begin in 2015.