Canada's Stornoway Diamond Corp (TSE:SWY) said Thursday that shareholders have approved the previously announced acquisition of the remaining 50% interest in the Renard diamond project in north-central Quebec.
At a meeting held in Toronto today, more than 96% of shareholders represented voted in favour of the deal, which is expected to close by April 1st. The transaction will see Stornoway acquire the remaining 50% of its Renard project from Diaquem, for total 100% ownership.
Diaquem is an indirect subsidiary of Societe generale de financement du Quebec (SGF), the Quebec government's main industrial and financial holding company.
"The agreement with SGF that has been approved today establishes a strong foundation for the successful development of Quebec's first diamond mine and the future growth of the company," said president and CEO of Stornoway, Matt Manson.
The Renard project, which is located in the James Bay region, was estimated in May of last year to have 30 million carats of diamond production potential over a 25 year mine life. The project's projected pre-tax net present value was C$885 million, at an 8% discount rate, with an IRR of 24.8%. Total capital investment was estimated at C$511 million.
Renard is also said to have indicated and inferred resources of 23.8 and 17.5 million carats, respectively.
Stornoway now plans to complete its ongoing bankable feasibility study for the project by the third quarter of this year, and expects to make a production decision by the end of 2011.
In consideration for the 50% stake in Renard, Stornoway will issue Diaquem shares equal to 37% of the company, if convertible shares are exercised. Excluding convertible shares, Diaquem's holding in Stornoway would amount to 25% of the company.
Separately, Stornoway also announced that its shareholders approved a share consolidation, on the basis of one post-consolidation share for up to every five pre-consolidation shares.