Stornoway (SWY.TO) Announces Updated Renard Mineral Resource Estimate
Successful Conversion of Renard 65 to Indicated Mineral Resource
LONGUEUIL, QUEBEC--(Marketwired - Jul 23, 2013) - Stornoway Diamond Corporation (SWY.TO) is pleased to announce an updated Mineral Resource estimate by GeoStrat Consulting Services Inc. for the Renard Diamond Project, Stornoway's 100% owned flagship development project located in north-central Quebec. The update follows the successful completion of the Renard 65 bulk sample earlier in the year and, additionally, incorporates refinements to the geological models and diamond content estimates of certain other kimberlites made since the project's previous Mineral Resource statement was published in January 2011. Highlights of the new estimate are as follows:
•A total Indicated Mineral Resource of 27.1 million carats representing an increase of 14.0% over the previous estimate;
•The successful conversion of 2.3 million carats (7.86 million tonnes at 29.3 carats per hundred tonnes) of near-surface Renard 65 Inferred Mineral Resources to Indicated Mineral Resources, representing kimberlite amenable to open-pit mining to 150m depth;
•A total Inferred Mineral Resource of 16.9 million carats, a 3.5% decrease compared to previous estimate, as increased estimates of Inferred Mineral Resources at Renard 2, 4 and 9 partially offset the conversion of material from the Inferred to the Indicated category at Renard 65.
•An additional 25.7 to 47.8 million carats (54.6 to 74.9 million tonnes) have been designated a "Target for Further Exploration" to 775 m depth, below which each kimberlite remains open.
The reader is cautioned that mineral resources that are not mineral reserves do not have demonstrated economic viability. In addition, the potential quantity and grade of any exploration target is conceptual in nature, and it is uncertain if further exploration will result in it being delineated as a mineral resource.
Matt Manson, Stornoway's President and CEO, commented: "We are pleased to be able to confirm the successful conversion of a large part of the Renard 65 kimberlite to the Indicated Resource category, for its inclusion in the Renard mine plan. This open pit ore will allow us to utilize the designed expansion capacity of our plant from 6,000 to 7,000 tonnes per day, and is expected to provide for an extended reserve tail for the project. At the same time, we have been able to convert into new Inferred Resources the large quantity of diamonds contained within the brecciated country rock that is entrained within and around the Renard 2 kimberlite. These diamonds are derived primarily from the abundant hypabyssal kimberlite which has been drilled and sampled repeatedly within the Renard 2 eruptive envelope, but which has never been incorporated into previous resource estimates. A large part of this material is expected to be mined as waste or mining dilution, and has previously been designated a zero grade in our production schedule. Both of these resource additions offer near term production gains for the project." Matt Manson continued: "The updated Mineral Resource estimate has re-confirmed the very large upside of 25.7 to 47.8 million carats outside the formal Indicated and Inferred categories at Renard. Taken together, Renard represents one of the world's most important new sources of high value diamonds."
Renard Diamond Project - July 2013 Mineral Resource Estimate
The updated Mineral Resource estimate was completed in accordance with the Canadian Institute of Mining (CIM) Definition Standards for Mineral Resources and Mineral Reserves as incorporated by National Instrument (NI) 43-101, Standards of Disclosure for Mineral Projects. It comprises the integration of kimberlite volumes, density, petrology and diamond content data derived from 88,887m of diamond drilling (457 holes), 6,151m of large diameter reverse circulation (RC) drilling (36 holes), 18.3t of samples submitted for microdiamond analysis, 600.8cts of diamonds (6,457 stones) recovered from RC drilling and 9,575.0cts of diamonds (92,940 stones) recovered from surface trenching and underground bulk sampling. The estimate also incorporates information derived from approximately 135 drill holes, 37 surface test pits and 12 trenches undertaken for geotechnical and hydrogeological purposes.
Table 1: Total NI 43-101 Mineral Resource Estimate(1), (2), (3)
INDICATED RESOURCE
KIMBERLITE CONTAINED
CARATS
(millions) TONNES
(millions) GRADE
(cpht)
(4), (5)
Renard 2 Total 18.66 n/a 18.58 n/a 100 n/a
Renard 2 (note 6) 18.38 +1.6 % 17.71 +0.4 % 104 +1.2 %
Renard 2 CRB-2a 0.28 n/a 0.87 n/a 32 n/a
Renard 3 1.82 -1.7 % 1.76 +0.5 % 103 -2.2 %
Renard 4 4.31 +13.0 % 7.25 -- 60 +13.1 %
Renard 65 2.3 n/a 7.87 n/a 29 n/a
Renard 9 -- -- -- -- -- --
Lynx -- -- -- -- -- --
Hibou -- -- -- -- -- --
Total Indicated 27.09 +14.0 % 35.45 +33.1 % 76.4 -14.3 %
INFERRED RESOURCE
KIMBERLITE CONTAINED
CARATS
(millions) TONNES
(millions) GRADE
(cpht)
(4), (5)
Renard 2 Total 7.47 n/a 11.77 n/a 64 n/a
Renard 2 (note 6) 6.23 +1.6 % 5.23 +0.4 % 119 +1.2 %
Renard 2 CRB 1.24 n/a 6.54 n/a 19 n/a
Renard 3 0.61 -4.2 % 0.54 +0.2 % 112 -4.5 %
Renard 4 2.37 +13.7 % 4.75 -0.1 % 50 +13.7 %
Renard 65 1.18 -68.3 % 4.93 -61.9 % 24 -16.8 %
Renard 9 3.04 +13.2 % 5.7 +0.1 % 53 +13.2 %
Lynx 1.92 -- 1.8 -- 107 --
Hibou 0.26 -- 0.18 -- 144 --
Total Inferred 16.85 -3.5 % 29.67 -4.6 % 57 +1.2 %
(1) Resource categories follow the CIM Standards for Mineral Resources and Mineral Reserves.
(2) Totals may not add due to rounding.
(3) Changes from January 2011 Mineral Resource estimate shown in italics.
(4) Carats per hundred tonnes.
(5) Estimated at a +1 DTC sieve size cut-off.
(6) Excludes discrete more dilute kimberlite facies not previously incorporated into January 2011 resource. Provided to facilitate more direct comparison with 2011 Mineral Resource estimate.
n/a = not applicable or no direct comparison
In addition to incorporating the results of the Renard 65 bulk sampling completed in February 2013, the new Mineral Resource estimate incorporates the results of recent geotechnical and hydrogeological drilling at Renard, where such drilling intersected the ore bodies, and utilizes a refined method for calculating country rock dilution within each kimberlite. The grade contribution provided by the abundant occurrences of hypabyssal kimberlite observed within each body's eruptive envelope has also been re-assessed. This has resulted in changes to the diamond content estimates of Renard 2, 3, 4 and 9, and a substantial quantity of Country Rock Breccia ("CRB") within Renard 2 being added to the Mineral Resource Estimate, including 0.87 million tonnes at 32 cpht (0.28 million carats) in the Indicated category and 6.54 million tonnes at 19 cpht (1.24 million carats) in the Inferred category. In the previous Mineral Resource Estimate, this CRB material was assigned a zero grade, and is treated within the Renard underground mine plan as waste or mining dilution.
Material classified as a Target for Further Exploration (herein 'TFFE', and formerly known as "Potential Mineral Deposit") represents an estimate of potential upside that can be reasonably assumed for each body given the nature and grade of material within the mineral resource. The TFFE within the Renard kimberlite pipes has been determined by projecting kimberlite volumes from the base of the Inferred Resource to a depth of approximately 775m below surface, representing the base of current drilling as established at Renard 4. In the case of the Lynx and Hibou dykes, the TFFE was established on the basis of known drill intersections of kimberlite for which insufficient diamond sampling exists to adequately estimate a diamond resource grade. TFFE totals 25.7 to 47.8 million carats (54.6 to 74.9 million tonnes at diamond contents grades ranging from 25 to 168 cpht).
Table 2: Total Target for Further Exploration (TFFE) (1), (2), (3)
TARGET FOR FURTHER EXPLORATION
KIMBERLITE RANGE OF
CONTAINED
CARATS
(millions) RANGE OF
TONNES
(millions) RANGE OF
GRADES
(cpht)
(4), (5)
Renard 2 4.2 TO 7.3 4.0 to 4.6 104 to 158
Renard 3 0.8 TO 2.8 0.8 to 1.7 105 to 168
Renard 4 5.6 TO 11.8 11.1 to 15.4 50 to 77
Renard 65 7.3 TO 13.5 29.0 to 40.9 25 to 33
Renard 9 2.0 TO 4.3 3.9 to 6.3 52 to 68
Lynx 3.0 TO 3.8 3.1 to 3.2 96 to 120
Hibou 2.9 TO 4.3 2.7 to 2.9 104 to 151
25.7 TO 47.8 54.6 to 74.9 n/a
Total TFFE +9.1% to -1.4% -0.8% to -0.8% n/a
(1) Formerly known as Potential Mineral Deposit. TFFE does not constitute a mineral resource; refer to cautionary language contained within this release.
(2) Totals may not add due to rounding.
(3) Changes from January 2011 estimate shown in italics.
(4) Carats per hundred tonnes.
(5) Estimated at a +1 DTC sieve size cut-off.
n/a = not applicable or no direct comparison
Diamond valuation data utilized in the updated Mineral Resource estimate for the test of prospects of reasonable economic extraction is derived from the most recent valuation exercise undertaken in March 2013 by WWW International Diamond Consultants Inc ("WWW"; see Stornoway press release April 11, 2013). These diamond valuation estimates and price models are summarized in Table 3 below.
Table 3: Diamond Price Models(1)
DIAMOND VALUATIONS
KIMBERLITE SAMPLE
SIZE SAMPLE
VALUATION(2) BASE CASE
PRICE MODEL HIGH
SENSITIVITY LOW
SENSITIVITY
(Carats) US$/Carat US$/Carat US$/Carat US$/Carat
Renard 2 1,581 $ 180 $ 190 $ 214 $ 172
Renard 3 2,752 $ 173 $ 151 $ 185 $ 141
Renard 4 2,674 $ 100 $ 104 ($150)
(3) $ 168 $ 98
Renard 65 997 $ 250 $ 180 $ 203 $ 169
(1) All prices in US$ per carat. Samples utilizing a +1 DTC sieve size cut-off.
(2) Based on the March 2013 price book of WWW International Diamond Consultants Ltd.
(3) Should the Renard 4 diamond population prove to have a diamond population with a size distribution equal to the average of Renard 2 and 3, WWW have estimated that a base case diamond price model of $150 per carat would apply based on March 2013 pricing.
Qualified Persons
Mr. David Farrow, PrSciNat, P.Geo.(BC), Ordre des geologues du Quebec (Special Authorisation # 279) of GeoStrat Consulting Services Inc. is the independent Qualified Person responsible for preparation of the mineral resource estimate for the Renard Diamond Project. GeoStrat Consulting Services Inc, a mineral resources consultancy, focuses on client interaction and involvement in developing resource models, and has experience in exploration, geological modeling, resource evaluation, production, resource reconciliation and accounting of diamond deposits around the globe. Stornoway's diamond exploration programs are conducted under the direction of Robin Hopkins, P.Geol. (NT/NU), Vice President, Exploration, a Qualified Person under NI 43-101. Both of these Qualified Persons have reviewed and approved the contents of this release.
About the Renard Diamond Project
The Renard Diamond Project is located approximately 250 km north of the Cree community of Mistissini and 350 km north of Chibougamau in the James Bay region of north-central Québec. In November 2011, Stornoway released the results of a Feasibility Study at Renard, followed by an Optimization Study in January 2013, which highlighted the potential of the project to become a significant producer of high value rough diamonds over a long mine life. Probable Mineral Reserves as defined under National Instrument ("NI") 43-101 stand at 17.9 million carats. Total Indicated Mineral Resources, inclusive of the Mineral Reserve, stand at 27.1 million carats, with a further 16.9 million carats classified as Inferred Mineral Resources, and 25.7 to 47.8 million carats classified as non-resource exploration upside. All kimberlites remain open at depth. Pre-production capital cost stands at an estimated C$752 million, with a life of mine operating cost of C$57.63/tonne giving a 67% operating margin over an initial 11 year mine life. Readers are referred to the technical report dated December 29th, 2011 in respect of the November 2011 Feasibility Study for the Renard Diamond Project, and the technical report dated February 28th, 2013 in respect of the January 2013 Optimization Study, for further details and assumptions relating to the project
