Stornoway to Restart Operations at Renard

RAPAPORT… Stornoway Diamond Corporation plans to resume operations at its Renard mine in Canada this month after half a year of inactivity, according to a minority shareholder.

The miner, which was acquired by its lenders last year following heavy losses and mounting debt, closed the deposit in March as a result of the challenges imposed by the coronavirus pandemic. The resumption follows a review of operations in which Stornoway agreed to reduce costs by $30 million over the next 16 months, shareholder Osisko Gold Royalties said Monday.

Stornoway’s shareholders will invest an additional $30 million in the company to support operations until the diamond market has recovered. They will also defer all loan payments until April 2022.

“The Stornoway team has shown an ability to operate the Renard mine efficiently, and the near-term cost reductions will further help improve profitability,” said Osisko CEO Sean Roosen. “We feel there is significant value in the Renard mine given the scarcity of diamond mines globally and the approximately $1 billion of well-built infrastructure.”

The miner currently has $10 million in cash, as well as 332,000 carats of rough inventory, which it expects to sell later this year. Stornoway was not available for comment at press time.

Image: The Renard mine. (Stornoway Diamond Corporation)