Stornoway (SWY.TO)Arranges $20M Bridge Facility for Renard Diamond Project
MONTREAL, QUEBEC--(Marketwired - Oct. 2, 2013) - Stornoway Diamond Corporation (TSX:SWY) is pleased to announce that it has entered into an unsecured non-revolving bridge credit facility of up to $20 million with Ressources Québec, a subsidiary of Investissement Québec, Stornoway's largest shareholder, through its indirect wholly-owned subsidiary Diaquem Inc. (the "Lender"). The proceeds of the facility will be used in connection with the development of the Renard Diamond Project and for general corporate purposes, including costs relating to Stornoway's ongoing project financing activities.
Matt Manson, Stornoway's President and CEO, stated: "This credit facility is intended to provide Stornoway with good funding flexibility as we pursue our project financing activities and begin the ramp-up to the capital programs anticipated at Renard in 2014 and 2015. We are particularly pleased to acknowledge the continued and constructive support of our major shareholder, Investissement Québec, in the development of this important new Québec mining project. With major regulatory authorizations in hand and the Renard Mine Road now open for construction traffic, Stornoway's primary objective is the timely conclusion of our principal project financing arrangements."
Under the facility, the Lender will loan up to an aggregate amount of $20 million to Stornoway in two tranches, an initial tranche of $10 million which is expected to be made available on or about October 2, 2013 and a second tranche of up to $10 million, each of which will bear interest at 12% per annum and be repayable on March 28, 2014. The Lender has the discretion to determine whether to fund the second tranche and, if so, the specific amount. A commitment fee equal to 1% of the amount funded under each tranche is payable by Stornoway.
Stornoway will have the right to satisfy up to 50% of the interest payable on the aggregate of the amounts loaned to Stornoway pursuant to the facility by issuing to the Lender common shares of Stornoway at an issue price of 95% of the volume weighted average price of such shares as of the interest payment date, while the remaining portion of interest payable on such amounts will be paid in cash. The credit agreement contains additional representations, covenants, commitments and funding conditions customary for a facility of this nature.
Annual General Meeting
Stornoway's Annual General Meeting of Shareholders will be held at Hotel Le Crystal Montreal, Crescent Room, 1100 de la Montagne Street, Montreal, Québec, Canada, on Wednesday, October 23, 2013, at 4:00 p.m.