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Stornoway Announces Closing of C$132 Million Public Offering of Subscription Receipts and C$242 Million Private Placement of Subscription Receipts

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Stornoway Announces Closing of C$132 Million Public Offering of Subscription Receipts and C$242 Million Private Placement of Subscription Receipts

 

 

 

 

 

Stornoway Diamond Corporation (TSX:SWY) is pleased to announce that it has closed its previously announced public offering of 188,600,000 subscription receipts at a price of C$0.70 per Subscription Receipt for aggregate gross proceeds of C$132.02m. The subscription receipts are expected to begin trading on Friday May 23rd, under the ticker symbol TSX-SWY.R.
 

Stornoway is also pleased to announce the closing of its previously announced private placements of 345,539,916 subscription receipts at a price of C$0.70(1) per Private Placement Subscription Receipt for aggregate gross proceeds of C$241.88m(2). The Private Placements consist of subscriptions of 171,254,203 Private Placement Subscription Receipts by Orion Co-Investments I LLC 142,857,142 Private Placement Subscription Receipts by Ressources Quebec Inc. a wholly-owned subsidiary of Investissement Quebec, and 31,428,571 Private Placement Subscription Receipts by Caisse de depot et placement du Quebec.
 

Matt Manson, Stornoway’s President and CEO, commented: “The successful closing of the public offering of subscription receipts is an important milestone for Stornoway, and a precondition for the completion of the overall project financing agreement announced on April 9th. This agreement contemplates financing commitments to fully fund the Renard Diamond Project through construction to the declaration of commercial production, including all contingencies, capital escalation allowances, working capital requirements, and financing costs. We look forward to submitting the balanced package of equity, debt and streaming agreement that we have arranged to our shareholders for their approval at a special meeting to be held in Montreal on June 26, 2014. Principal project construction is expected to commence upon the receipt of shareholder approval and the satisfaction of all remaining transaction conditions, including the completion of definitive documentation.”
 

The Public Offering and the Private Placements were made pursuant to the previously-disclosed binding financing commitment agreement, as amended among the Corporation, Orion Co-Investments I Ltd., RQ and CDPQ for the construction of the Renard Diamond Project.
 

The net proceeds of the Public Offering and the Private Placements will be held in escrow pending the completion of the financing transactions described in the Agreement. Upon satisfaction of the escrow release conditions, holders of Subscription Receipts will be entitled to receive, without payment of additional consideration or further action, one common share and one-half of one common share purchase warrant of Stornoway for each subscription receipt held, and holders of Private Placement Subscription Receipts will be entitled to receive, without payment of additional consideration or further action, one common share of Stornoway for each subscription receipt held. Orion, RQ and CDPQ will be paid a placement fee equal to 6% of the aggregate amount subscribed for under the Private Placements payable upon closing of the financing transactions in Stornoway common shares.
 

If the escrow release conditions have not been satisfied by July 1, 2014 or such later date as may be agreed among Stornoway, Orion Co-Investments I Ltd., RQ and CDPQ (but not later than October 1, 2014), then the Subscription Receipts and the Private Placement Subscription Receipts shall be automatically cancelled and the escrow agent shall remit to holders of Subscription Receipts and Private Placement Subscription Receipts an amount equal to the original purchase price plus accrued interest.
 

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of any securities referred to in this press release in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. Without limiting the foregoing, the securities referenced herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration in the United States or an applicable exemption from registration requirements. The securities being offered have not been approved or disapproved by any regulatory authority, nor has any such authority passed upon the accuracy or adequacy of the final short form prospectus.

(1) Based on the Bank of Canada CAD / USD noon exchange rate on May 22, 2014 of $0.9176.

(2) Ibid.
 

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 Chibougamau in the James Bay region of north-central Quebec. In November 2011, Stornoway released the results of a Feasibility Study at Renard, followed by an Optimization Study in January 2013, which highlighted the potential of the project to become a significant producer of high value rough diamonds over a long mine life. Probable Mineral Reserves, as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”), stand at 17.9 million carats. Total Indicated Mineral Resources, inclusive of the Mineral Reserve, stand at 27.1 million carats, with a further 16.85 million carats classified as Inferred Mineral Resources, and 25.7 to 47.8 million carats classified as non-resource exploration upside. Readers are cautioned that the potential quality and grade of any target for further exploration is conceptual in nature, there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the target being delineated as a Mineral Resource. All kimberlites remain open at depth. Readers are referred to the technical report dated December 29th, 2011 in respect of the November 2011 Feasibility Study for the Renard Diamond Project, and the technical report dated February 28th, 2013 in respect of the January 2013 Optimization Study, for further details and assumptions relating to the project. Disclosure of a scientific or technical nature in this press release was prepared under the supervision of Robin Hopkins, P.Geol. (NT/NU), Vice President, Exploration, a “qualified person” under NI 43-101.
 

About Stornoway Diamond Corporation

 

Stornoway is a leading Canadian diamond exploration and development company listed on the Toronto Stock Exchange under the symbol SWY and headquartered in Montreal. Our flagship asset is the 100% owned Renard Diamond Project, on track to becoming Quebec’s first diamond mine. Stornoway is a growth oriented company with a world class asset, in one of the world’s best mining jurisdictions, in one of the world’s great mining businesses.

Posted May 23, 2014

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