|Stornoway to Commence Bulk Sampling of Renard 65 Kimberlite|
MONTREAL, QUEBEC--(Marketwire - July 23, 2012) -Stornoway Diamond Corporation (TSX:SWY) is pleased to announce that it will shortly commence a 5,000 tonne bulk sample program of the Renard 65 Kimberlite pipe, located at Stornoway's 100% owned Renard Diamond Project in north-central Quebec.
The objective of the bulk sample program is to collect a large enough parcel of diamonds to allow the conversion of material that is currently classified as an Inferred Mineral Resource to an Indicated Mineral Resource and then, if warranted, to a Mineral Reserve. Five thousand tonnes will be acquired from a previously opened trench where the R65 kimberlite is exposed at surface at its northern extent, and will be processed initially at Stornoway's 10 tonne per hour dense media separation plant located at the project site. Final diamond recovery will be conducted at Stornoway's North Vancouver lab facilities. The program is budgeted at C$2.5million, and is scheduled to be completed by the end of the year. Given previously measured grades at the sampling site, it is expected that approximately 1,000 carats of diamonds will be recovered, which will be sent to Antwerp, Belgium for valuation.
Matt Manson, President and CEO, commented: "The Renard 65 bulk sample program announced today offers the opportunity to add a large tonnage of open pit reserves to the Renard mine plan. Renard 65 is the largest of the project's kimberlites, and although its grade is lower than Renard 2 and 3, its diamond characteristics are similar and it is easily accessible from surface. The cost of developing an open pit at Renard 65 is already included in the Renard Feasibility Study, as a borrow pit for backfill waste required in the underground mine, and as a sump for water management. However, as an Inferred Mineral Resource, ore extracted from this pit is excluded from the Feasibility Study's production schedule. The upgrading of Renard 65's resource classification this year is expected to add value to the project by allowing an immediate expansion of planned processing capacity from 6,000 to 7,000 tonnes per day, and by extending the reserve mine life beyond the current 11 years. Renard has a considerable resource upside potential, and this sampling program will allow us to pursue the project's continued growth as we work towards final project financing."
In November 2011, Stornoway released the first National Instrument ("NI") 43-101 compliant Mineral Reserve estimate for Renard of 18.0 Mcarats (representing 23.0 million tonnes at an average grade of 78 carats per hundred tonnes, or "cpht") at a weighted average diamond valuation of US$180/carat. The project's Inferred Mineral Resources comprise an additional 17.5 Mcarats (31.1 Mtonnes at an average grade of 56 cpht), and targets for further exploration outside of the Mineral Resource statement have been estimated at between 23.5 and 48.5 Mcarats (55.1 to 75.5 Mtonnes at grades ranging from 23 to 188 cpht). Within this resource inventory, Renard 65 contains an Inferred Mineral Resource of 3.7 Mcarats (representing 12.9 mtonnes at an average grade of 29 cpht) to a depth of 290m, with an exploration potential estimated at between 6.8 and 13.7 Mcarats (29.5 to 41.6 Mtonnes at between 23 and 33 cpht) from 290m to 775m in depth.
The reader is cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. In addition, the potential quantity and grade of any exploration target is conceptual in nature, and it is uncertain if further exploration will result in it being delineated as a mineral resource.
About the Renard Diamond Project
The Renard Diamond Project is located approximately 250 km north of the Cree community of Mistissini and 350 km north of the communities of Chibougamau and Chapais in the James Bay region of North-Central Québec. In November 2011, Stornoway released the results of a Feasibility Study for Renard that highlighted the potential of the project to become a significant producer of high value rough diamonds over a long mine life. NI 43-101 compliant Probable Mineral Reserves stand at 18.0 million carats, with a further 17.5 million carats classified as Inferred Mineral Resources, and 23.5 to 48.5 million carats classified as non-resource exploration upside. All kimberlites remain open at depth. Pre-production capital cost stands at C$802 million, with a life of mine operating cost of C$54.71/tonne giving a 68% operating margin over an initial 11 year mine life. Production start-up is scheduled for 2015. In March 2012 Stornoway entered into the Mecheshoo Agreement with the Cree Nation of Mistissini and the Grand Council of the Crees (Eeyou Itschee) in respect to the Renard Diamond Project, and joined Chibougamau and Chapais in a Declaration of Partnership in July 2012. Readers are referred to the technical report dated December 29, 2011 for further details and assumptions relating to the project.