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Stornoway Diamond in talks for financing of Quebec mine project

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Stornoway Diamond Corp. says it is in talks with an unspecified number of parties over financing for its Renard diamond mine project in Northern Quebec.

In response to unusual trading activity in its shares on Thursday, Montreal-based Stornoway said it is in "advanced negotiations with a number of parties regarding a comprehensive financing plan."

There is progress in the discussions so far but that the outcome at this point is uncertain and more negotiation is needed before a deal can be locked up, the company said.

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A transaction could include any combination of debt, equity, forward sale of diamonds and other forms of financing, it said.

The Renard property – Quebec's first diamond mine – is located about 250 kilometres north of the Cree community of Mistassini and 350 kilometres north of Chibougamou in north-central Quebec.

Stornoway has said previously that it is seeking financing in the $800-million range so it can proceed to the building and operation stages. The natural resources sector has experienced a drop in capital spending, with companies and investors pulling back as commodity prices fell.

The Quebec government, which has helped finance part of a 240-kilometre all-season road leading to the mine site, owns a 25-per-cent stake in the company through its investment arm Investissement Québec.

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About the Author
Quebec Business Correspondent

Bertrand has been covering Quebec business and finance since 2000. Before joining The Globe and Mail in 2000, he was the Toronto-based national business correspondent for Southam News. He has a B.A. from McGill University and a Bachelor of Applied Arts from Ryerson. More

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