RE:Québec vole au secours de StornowayEnglish:
While Stornoway, the operator of the Renard diamond project in James Bay, is looking for a buyer or new partners, the Quebec government is already banking on a "plan B" in the event of a failure.
This was said Tuesday by the Minister of the Economy, Pierre Fitzgibbon, during a telephone interview, after the mining distressed got another boost from Investissement Qubec, its main shareholder, as well as other partners.
"If the steps are not favorable, we are already working on a plan B with creditors [Stornoway]," said the minister, who however did not want to open his game.
The Renard Diamond Project, which was to embody the revival of the Plan Nord, received investments of half a billion dollars from Quebec and the Caisse de dpt et placement du Qubec (CDPQ).
When asked, Fitzgibbon said Plan B was to find a solution with Stornoway's creditors to give the company more leeway, including paying interest on royalties and royalties. will protect hundreds of jobs.
This alternative should not require significant investment, he added.
Meanwhile, in the short term, Stornoway will receive approximately $ 22 million in advances on available funds and royalty payments, which should enable it to continue operations in Nord-du-Qubec until the solicitation of sales and investment process is completed.
Main shareholder with a stake of about 25.8%, Diaquem, a subsidiary of IQ, will advance up to 16.1 million.
"This gives us enough time to complete the solicitation and bargaining process until we reach the fall horizons," said Patrick Godin, president and chief executive 'a telephone interview.
It is not impossible that Stornoway will come under foreign control in the event of the arrival of a buyer or new partners, conceded Mr. Fitzgibbon, who has not formalized this possibility.
"If the company is part of a larger [mining] group where there is diversification, that would be a bonus," he said. The challenge is: does an orphan mine make sense? "
In order to keep costs down, Stornoway, which is facing significant liquidity challenges, has ceased operating an open-pit deposit while continuing to mine underground deposits.
As of March 31, cash and cash equivalents amounted to $ 29.5 million.
As part of its efforts, the Longueuil company, which has made changes to its senior management in recent months, has retained TD Securities and Scotia Capital.
In command since January 2019, Mr. Godin joined Stornoway in May 2010 as Chief Operating Officer.
Stornoway has experienced diamond breakage problems and the company is facing a market where prices are rather depressed, forcing it to sell at lower prices than in previous years and much lower than prices initially anticipated.
Last October, as part of a refinancing, the company obtained a payment holiday on its loans from IQ and the Fonds de solidarit FTQ.
For the first quarter of fiscal 2019, Stornoway posted a net loss of $ 48.4 million, or 5 cents per share, compared to a net loss of $ 11 million, or 1 ¢ per share, in the same period last year. last year. Revenues fell 4.65% to 53.3 million.
On the Toronto Stock Exchange, the company's stock closed at 2 ¢, down 1 ¢.