Stornoway Diamond Corp (TSE:SWY) has increased the resource estimate at its Renard diamond project in north-central Quebec, the mining company said Tuesday, allowing it to make use of the upcoming expanded capacity at its plant.
The resource report, completed by GeoStrat Consulting Services, shows a total of 27.1 million carats in the indicated category, a 14 per cent increase over the previous estimate, according to Stornoway's statement.
The company said it converted 2.3 million carats of near-surface inferred mineral resources from the Renard 65 deposit to the indicated category. The updated resource report follows Stornoway's successful Renard 65 bulk sample earlier this year, and improvements to the geological model since the project's last resource estimate in January 2011.
The latest report also includes total inferred resources of 16.9 million carats, a 3.5 per cent decline from the previous estimate.
Between 25.7 to 47.8 million carats have also been designated as target for further exploration, the company said, to 775 metres depth, below which each kimberlite remains open.
“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," said president and CEO Matt Manson in the release Tuesday.
"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."
The company said these diamonds have never been included into previous resource estimates, with a large part of this material expected to be mined as waste or mining dilution.
"Both of these resource additions offer near term production gains for the project," Manson added. "Taken together [including the carats designated as further targets], Renard represents one of the world’s most important new sources of high value diamonds.”
The report includes data from 88,887 metres of diamond drilling, as well as from reverse circulation drilling, and other samples.
The Renard project sits just 250 km north of the Cree community of Mistissini and 350 km north of Chibougamau in the James Bay region of north-central Québec. Probable Mineral Reserves at the project stand at 17.9 million carats.
According to a feasibility study released in November 2011, 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 per cent operating margin over an initial 11 year mine life.
Shares of Stornoway picked up one penny in Toronto on Tuesday, to 53 cents in early deals.