Stornoway receives financial backing while strategic review continues

While Stornoway Diamond Corp continues with a strategic review aimed at ensuring the long-term viability of its Renard mine, in Quebec, the company has received financial backing from its secured lenders and key stakeholders.

Under the terms of the bridge financing agreement, Diaquem, an affiliate of Investissement Québec, has agreed to advance an estimated C$11.7-million by way of access to the funds available in a senior loan reserve account maintained by Stornoway’s subsidiary, Stornoway Diamond (Canada) Inc (SDCI). 

In addition, amounts equivalent to royalty payments to be made by SDCI to Diaquem under the existing royalty agreement, up to an estimated amount of C$1.9-million, and to interest payments accruing under the senior loan agreement between SDCI and Diaquem, up to C$2.5-million, have agreed to be advanced by Diaquem. 

The bridge financing agreement also provides that the buyers under the amended and restated purchase and sale agreement of October 2018, will advance an amount equivalent to the stream net proceeds payable to Stornoway, up to an estimated amount of C$5.9-million.

Osisko Gold Royalties, which owns a senior-secured 9.6% diamond stream on Renard, said that it continued to support Stornoway during its strategic review process.

“We are working closely with Stornoway, its financial partners, and the government of Québec to ensure the long-term viability of the Renard mine for the benefit of all stakeholders during these challenging times in the diamond market,” said Osisko chairperson and CEO Sean Roosen.