Desjardins new analyst maintains 1.70$ Target Nothing new with «winter road access» news of today but this is first time we get news from Desjardins new analyst «John Hughes».
Even prior that «Stornoway will file a NI 43-101 compliant technical report on the Optimization Study, representing an amended Feasibility Study, within 45 days» (mid march), I retain from this news that Mr John Hughes stick with a recommendation to buy with a 1.70$ target as per previous Desjardins' analyst. Very conservative but it shows well that upside direction soon to come.
Below is Desjardins news as is (standards notes attached to news has been trunked as this is no added value)
Wish the best to all
Stornoway Diamond Corporation (SWY C$0.85, TSX)
Rating Buy–Speculative Target C$1.70
Winter road access to Renard diamond project completed ahead of schedule — John Hughes
(416) 607-3021, john.hughes@vmd.desjardins.com
Impact: Positive
This morning, Stornoway announced that Québec’s Ministère des Transport (MTQ) has completed
construction of the winter road access to the Renard diamond project site, a full two full weeks ahead
of schedule. This will allow Stornoway six weeks to move the heavy equipment needed for
construction of the all-season Renard mine road, which is expected to commence in April.
The all-season Renard mine road is 240km, of which 143km is being constructed by the government
of Québec and 97km is the responsibility of Stornoway.
Recall that the Québec government has agreed to provide Stornoway with an unsecured credit facility
of up to C$77m to finance the construction of that portion of the mine road that is Stornoway’s
responsibility at an interest rate of 3.4% per annum and an amortization period of 15 years. The
government has also agreed to provide Stornoway with the right to draw an additional C$7.7m (as a
cost contingency) at an interest rate of 6.3%. Repayment will be based upon planned commencement
of commercial production at Renard. The first all-season road access is still scheduled for 4Q13.
We view this development positively as it represents yet another milestone in the derisking of the
Renard diamond project. We reiterate our Buy–Speculative rating and C$1.70 target price on
Stornoway.