Shareholders ApproveStornoway Shareholders Overwhelmingly Approve Acquisition of Remaining 50% of Renard Diamond Project
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 10, 2011) -
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Stornoway Diamond Corporation (TSX:SWY) ("Stornoway")is pleased to announce that Stornoway shareholders have overwhelminglyapproved the previously announced acquisition of the 50% interest ofDIAQUEM Inc. ("DIAQUEM") in the Renard Diamond Project ("Renard"),Stornoway's feasibility-stage diamond project in north-central Quebec(the "Acquisition"). At a special meeting held today in Toronto, 96.6%of the votes cast by shareholders represented in person or by proxy werevoted in favour of the Acquisition, which the parties have agreed willbe completed on April 1, 2011 (the "Closing Date"). DIAQUEM is awholly-owned subsidiary of SOQUEM INC., itself a wholly-owned subsidiaryof Societe generale de financement du Quebec ("SGF"), the Quebecgovernment's main industrial and financial holding company.
Matt Manson, President and CEO of Stornoway, commented: "Weare very gratified that our shareholders have endorsed socomprehensively our proposal to acquire the remaining 50% interest inRenard. The agreement with SGF that has been approved today establishes astrong foundation for the successful development of Quebec's firstdiamond mine and the future growth of the Company. We now look forwardto the completion of our ongoing bankable feasibility study, scheduledfor the 3rd quarter of this year, and the pursuit of the considerable resource growth potential at the project."
Eira Thomas, Executive Chairman of Stornoway, commented:"This is a pivotal moment in our Company's history. We now own 100% ofRenard, a leading development track diamond asset, and we have gainedSGF as a strong new shareholder and project lender. We look forward to aproductive year, working closely with government and localstakeholders, including the communities of Mistissini and Chibougamau,to establish a formal development plan for Quebec's first diamond mine."
On the Closing Date, Stornoway will issue to DIAQUEM suchnumber of common shares as will result in DIAQUEM holding 25% ofStornoway's issued and outstanding common shares, and will further issuenewly-created non-voting convertible shares such that DIAQUEM's totalinterest in Stornoway, if such convertible shares were fully convertedfor common shares, would be equal to 37% of the issued and outstandingcommon shares, and the parties will enter into the agreements andcomplete the transactions described in the proxy circular mailed toshareholders in connection with the special meeting. Also on the ClosingDate, the board of directors of Stornoway will be increased from 8 to 9members and Mr. Jean-Jacques Carrier will sit on the board as thenominee of SGF. The board of directors so formed with the addition ofMr. Carrier as a director will appoint 2 additional directors asnominees of SGF, as provided under the terms of the Acquisition.
Stornoway is also pleased to announce that, at the specialmeeting of shareholders, Stornoway shareholders approved theconsolidation of its common shares on the basis of one (1)post-consolidation share for up to every five (5) pre-consolidationshares (the "Share Consolidation"), as originally announced in a pressrelease dated December 14, 2010. The Share Consolidation was approved by95.1% of the votes cast by shareholders represented in person or byproxy. Following receipt of shareholder approval by Stornowayshareholders, the board of directors of Stornoway determined toimplement the Share Consolidation on the basis of one (1)post-consolidation share for four (4) pre-consolidation shares. In thatregard, the Share Consolidation has been conditionally approved by theToronto Stock Exchange ("TSX") and will be implemented, subject to finalTSX approval, in the coming days. Stornoway will issue a press releaseannouncing the date on which the common shares will commence trading on apost-consolidation basis on the facilities of the TSX once such datehas been definitively determined.
As at the date hereof, an aggregate of 355,066,702pre-consolidation common shares of Stornoway are issued and outstanding.It is expected that, upon implementation of the Share Consolidation andprior to the issuance of common shares to DIAQUEM, an aggregate of88,766,675 post-consolidation common shares will be issued andoutstanding (subject to any adjustments for fractional shares). Nofractional common shares will be issued pursuant to the ShareConsolidation. In the event a shareholder would otherwise be entitled toa fractional common share under the Share Consolidation, the number ofcommon shares issued to such shareholder will be rounded to the nextgreater whole number if the fractional entitlement is equal to orgreater than 0.5, and will, without additional compensation, be roundeddown to the next lesser whole number of common shares if the fractionalentitlement is less than 0.5.
In addition, the number of common shares issuable upon theexercise of outstanding stock options or other convertible securities ofStornoway will be proportionately adjusted upon the implementation ofthe Share Consolidation. As a result, the number of common shares andnon-voting convertible shares to be issued to DIAQUEM on the ClosingDate will be on a post-consolidation basis.
The common shares referred to herein have not been registeredunder the U.S. Securities Act of 1933, as amended, and may not beoffered or sold in the United States absent registration or anapplicable exemption from the registration requirements. This pressrelease shall not constitute an offer to sell or the solicitation of anoffer to buy, nor shall there be any offer, solicitation or sale of thesecurities in any state in which such offer, solicitation or sale wouldbe unlawful.
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