April 9, 2014 / 10:50 PM / in 4 years

Stornoway secures nearly C$1 bln to build Quebec diamond mine

April 9 (Reuters) - Stornoway Diamond Corp said on Wednesday it has entered into a financing agreement with three parties, including a private equity group and the Quebec government, for C$944 million ($864.59 million) to build a mine at Stornoway’s Renard diamond project in Quebec.

The agreement lays out a series of proposed financing transactions for the mine, including US$360 million from the Orion Mine Finance Group, a mining-focused private equity business; C$220 million from Ressources Quebec, a subsidiary of the Quebec’s investment agency; and C$105 million from the Caisse de depot et placement du Quebec, a large institutional fund manager in the province.

The agreement also includes a public share offering and an equipment financing facility with Caterpillar Financial.

“Taken together, they represent the largest ever project financing package for a publicly listed diamond company,” Stornoway said in a statement.

Construction of a mine at the Renard diamond project in north-central Quebec is expected to begin this year with commercial production set for June 2016, according to Stornoway’s website.

Each element of the complex financing deal, which includes debt, equity and streaming finance, is conditional upon completing the others. Streaming involves the forward sale of a commodity usually at a set price in exchange for upfront financing.

Stornoway’s financial advisors were Scotiabank and Dundee Capital Markets Inc.

Stornoway’s stock closed at 97 Canadian cents on Wednesday, down 2 Canadian cents.

$1 = 1.0919 Canadian Dollars Reporting by Nicole Mordant in Vancouver; Editing by David Gregorio

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