December 7, 2018
STORNOWAY ANNOUNCES COMPLETION OF REMAINING TRANCHES OF FINANCING PREVIOUSLY ANNOUNCED ON OCTOBER 2ND 2018
Stornoway Diamond Corporation (TSX‐SWY; the “Corporation” or “Stornoway”) is pleased to announce that the remaining tranches of financing announced on October 2, 2018 (the “Financing Package”) have now been completed or approved for completion. These are:
A $10 million private placement (the “Private Placement”) with Ressources Québec inc. (“RQ”), acting as agent for the Government of Québec, was completed on December 7, 2018. RQ subscribed for 28,571,428 units at a price of $0.35 per unit, each unit comprising one common share of the Corporation (a “Common Share”) and one‐half of a common share purchase warrant (each whole common share purchase warrant, a “Warrant”). Each whole Warrant is exercisable until December 7, 2023 for one Common Share at an exercise price of $0.455, subject to certain adjustments.
A 2‐year deferral of principal payments on the Renard Mine Road Loan (the “Road Loan”) was authorized by the Québec government. All of the documentation in relation thereto is expected to be completed prior to December 19, 2018. The deferral of principal payments on the Road Loan represents additional liquidity to Stornoway of approximately $7 million.
All elements of the Financing Package announced on October 2, 2018 have now been completed or approved for completion. The Financing Package represents additional consideration and liquidity for the Corporation of C$129 million by way of certain debt service cost deferrals over a 24‐month period of $54 million, an amendment to the Renard diamond streaming agreement comprising a supplementary upfront deposit of $45 million in cash in exchange for certain sales and pricing considerations, and a $30 million private placement of common shares and warrants.
Matt Manson, President and CEO of Stornoway, stated “The two tranches of financing announced today with Ressources Québec and the Ministère des Finances du Québec represent the final components of the overall $129 million financing arrangement announced in October. Both of these tranches have been approved for completion on the same terms as previously announced. We are pleased with the strong statement of support for Stornoway and the Renard Diamond Mine that this represents. With the balance sheet strengthened and the Renard mine fully ramped up, this comprehensive deal allows our team to focus fully on the long term operating and cash flow potential of the business.”
Immediately prior to the Private Placement, RQ and its affiliates beneficially owned or had control or direction over, directly or indirectly, an aggregate of 209,746,573 Common Shares, representing approximately 23.46% of the issued and outstanding Common Shares. After giving effect to the Private Placement, RQ and its affiliates beneficially own or have control or direction over, directly or indirectly, an aggregate of 238,318,001 Common Shares and 14,285,714 Warrants, representing approximately 25.83% of the issued and outstanding Common Shares on a non‐diluted basis, and 26.96% of the issued and outstanding Common Shares on a partially‐diluted basis, assuming exercise of the 14,285,714 Warrants beneficially owned or over which and its affiliates have control or direction only. RQ and its affiliates intend to hold their Common Shares and Warrants for investment purposes and may, depending on market and other conditions, change their beneficial ownership of (or control or direction over) the Common Shares and the Warrants, whether in the open market, by privately negotiated agreements, in the context of treasury offerings or pursuant to the exercise of convertible securities.
An early warning report relating to this transaction will be filed on SEDAR under Stornoway’s profile at www.sedar.com. To obtain a copy of such report, please contact Isabelle Fontaine, Senior Director, Public and Governmental Affairs, at 514‐876‐9359. The head office of RQ is located at 600, de La Gauchetière Ouest, Suite 1500, Montréal, Québec, H3B 4L8. RQ is a wholly‐owned subsidiary of Investissement Québec. The mission of Investissement Québec is to contribute to the economic development of Québec, to stimulate the growth of investments and support employment in all regions of Québec.
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.
ABOUT STORNOWAY DIAMOND CORPORATION
Stornoway is a 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. The head office of Stornoway is located at 1111 St. Charles Ouest, Bureau 400, Tour Ouest, Longueuil, Québec, J4K 5G4.
On behalf of the Board
STORNOWAY DIAMOND CORPORATION
/s/ “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 Alexandre Burelle (Manager, Investor Relations and Business Development) at 450‐616‐5555 x2264 or toll free at 1‐877‐331‐2232
Pour plus d’information, veuillez contacter Alexandre Burelle (Directeur, Relations avec les investisseurs et développement des affaires) au 450‐616‐5555 x2264, firstname.lastname@example.org
** Website: www.stornowaydiamonds.com Email: email@example.com **
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