Stornoway Diamond Corp. (TSX: T.SWY, Stock Forum) said Friday it has struck a financing deal with an arm of the Quebec government to fund construction of an access road related to its Renard diamond project in the James Bay region of north central Quebec.
Features of the financing deal are as follows:
Quebec will provide Stornoway with a credit facility of up to $77 million to complete the road construction work at an annual interest rate of 3.35%. The credit facility has a 15-year term, with repayment scheduled to begin 48 months after the first disbursement, and deferrable for up to two years due to any delay in production past July 1, 2016.
Quebec will provide Stornoway with an additional overrun facility of up to $7.7 million, at an annual interest rate of 6.3%.
Stornoway undertakes to complete construction of the Renard mine road not later than June 30, 2015, subject to certain terms, including terms of the previously announced framework agreement.
Unchanged at 51 cents on Friday, Stornoway has a market cap of $71.3 million, based on 139.7 million shares outstanding. The 52-week range is $1.19 and 45 cents.