From Will P on Stockhouse Matt Manson's Stornoway Diamond Corp. (SWY), down one cent to 98 cents on 1.04 million shares, has begun commissioning its big Renard diamond mine in the Otish Mountains region of Quebec that is nearly set for production. The commissioning, which will begin with testing of the processing plant's crushers, screens, conveyors, pumps and recovery circuits, first with water and then with kimberlite, is expected to take several weeks. Mr. Manson, president and chief executive officer, says the move is a major milestone, achieved eight weeks ahead of the company's revised schedule and a seven-month improvement on the original schedule laid out in Stornoway's 2014 construction plan.
Stornoway's original plan, which carried an $811-million cost, anticipated the first ore delivery to the processing plant by mid-winter, with declaration of commercial production by the end of May, 2017. The company revised that schedule earlier this year, cutting the cost to $775-million and paring five months off the timeline. If the latest two-month gain holds up, first ore delivery would occur in midsummer with commercial production possible by early November. Renard, which will be Canada's seventh diamond mine to reach production, will be the first big one managed and financed entirely by a junior company.
More pleasant surprises could be in store for Stornoway's shareholders. The revised mine plan calls for Renard to ramp up to 7,000 tonnes per day by mid-2018, a rate roughly equivalent to that achieved at the Diavik mine. The total Renard reserve contains 33.4 million tonnes and 22.3 million carats, about one-quarter of it available for open-pit mining. Stornoway expects Renard to run for 14 years based on that reserve, but there are plenty more diamonds available that could extend its life in a big way.
Stornoway credits Renard with 30.2 million carats indicated and another 13.3 million inferred, for a combined 43.5 million carats. Those 10 million additional carats would add several years to Renard's lifespan. Further, the company has a large tonnage for further exploration -- a crudely defined amount of diamond-bearing kimberlite that needs more drilling to be considered a resource. That rock hosts between 32 million and 73 million additional carats. While it is improbable that all those carats can be mined profitably, those that can could add many more years to Renard's life.