VANCOUVER, BRITISH COLUMBIA, Nov 16, 2011 (MARKETWIRE via COMTEX) — Stornoway Diamond Corporation CA:SWY -10.00% is pleased to announce the results of the Feasibility Study ("FS") for the Renard Diamond Project located in North Central Quebec. The FS outlines a combined open pit and underground mine plan and was prepared by SNC Lavalin Inc. with contributions from AMEC Americas Ltd ("AMEC") for the design of the underground mine and diamond processing plant and G Mining Services Inc. ("G Mining") for open pit mine design and cash flow analysis. Additional technical elements of the study have been authored by Roche Ltd., Golder Associates Ltd. and Itasca Consulting Canada Inc. A Mineral Reserve has been declared by AMEC and G Mining based on the National Instrument ("NI") 43-101 compliant Mineral Resource authored by GeoStrat Consulting Inc. and published by Stornoway on January 24, 2011, and a diamond valuation conducted by WWW International Diamond Consultants Ltd. ("WWW") and published by Stornoway on June 13, 2011.
Highlights of the study are as follows:
- Base case estimates of Net Present Value ("NPV") of C$672 million at a 7% discount rate and Internal Rate of Return ("IRR") of 18.7% before taxes and mining duties, and C$376 million and 14.9% after taxes and mining duties.
- Probable Mineral Reserves of 18.0 million carats representing 23.0 million tonnes at an average grade of 78 carats per hundred tonnes ("cpht"), after allowance for mining dilution and ore recovery, and at a weighted average diamond valuation of US$180/carat.
- 11 year reserve-based mine life with maximum diamond production peaking at 2.1 million carats/annum, and averaging 1.7 million carats/annum life of mine.
- Gross revenue, in real terms, of C$4,112 million and operating cash flow of C$2,677 million.
- Initial estimated capital cost of C$802 million, including contingencies.
- An estimated operating cost averaging C$54.71/tonne ($70.27/carat) life of mine, and yielding an operating margin of 68%.