RE:RE:Une seule petite phrase....... English translation...some obvious mistakes in article, especially when talking about the per carat rough diamond price :
Qubec is preparing to come the rescue of the Stornoway Minire. The government passed a decree allowing Investissement Qubec to acquire part of the assets of the Renard mine - the only one producing diamonds in Qubec - and to pay additional sums in order to give it the opportunity to continue its activities.
This mine was to be the big recovery plan of Plan Nord. About $ 1 billion of public and private funds were invested, including $ 440 million from Investissement Qubec. But falling diamond prices and too high debt pushed Stornoway to the brink.
To save the company, Qubec could announce a support plan next week, confirmed Minister Pierre Fitzgibbon on Thursday night RDI economy. His wish is to preserve 550 jobs at the Renard mine, many of them in the Cree community.
What I can say tonight is that we collectively decided to save the mine and keep it in operation, and we should have an announcement that effect next week, he said.
The partners will now have to agree on a new capital structure. But none of Stornoway's creditors would like to close the mine, according to the minister. Because there is still a potential, he argues.
Mr. Fitzgibbon points out that Stornoway's problems have nothing to do with the performance of the mine. If you look at the financial results that were released a few weeks ago and you remove the financial noise [sic], there is a significant improvement in the operations.
The problem, he insists, lies especially in the market. Because the value of diamond has melted by half between the start of the Stornoway project, in 2014, and today. In five years, it has risen from US $ 146 to US $ 76 per carat.
Pierre Fitzgibbon estimates that somewhere between $ 85 and $ 90 per carat, the operation could be neutral cash flow. We are not far from the price of equilibrium, he believes.
The investment or capital that is required [today] is relatively small compared to the billion that has been invested so far. [...] But it's safe that the company is not worth a billion today.
Pierre Fitzgibbon, Minister of the Economy
According to the Journal de Montral, Qubec Investment would now be ready to convert a $ 125 million loan made in 2014 into Stornoway shares, which would reduce the company's interest costs. But the agency - which is already the largest shareholder of the company, with 29% of the shares - could also inject additional funds to allow the minire to continue its activities.
The Qubec Deposit and Investment Fund, the FTQ Solidarity Fund and the foreign fund Orion are also among the shareholders.