SGF cedes its interest in the Renard Diamond Project to become
a significant shareholder of Stornoway Diamond Corporation
MONTREAL, Dec. 14, 2010 /CNW Telbec/ - Société générale de financement
du Québec (SGF) announces it has signed an agreement with Stornoway
Diamond Corporation ("Stornoway"), one of Canada's leading diamond
exploration and development companies.
In accordance with said agreement, Diaquem, a subsidiary of SOQUEM,
itself a wholly owned subsidiary of SGF, will cede its 50% interest in
the Renard Project, a major undeveloped diamond deposit located in
North-Central Québec. Through this transaction, Stornoway, which
already controls 50% of the project, will control all of the diamond
mine's operations and marketing activities.
In turn, Stornoway will issue common shares and non-voting convertible
shares, which will provide SGF with a total interest of 37% in
Stornoway. Furthermore, SGF will receive a 2% royalty on the value of
the Renard's mining production and will nominate three representatives
to Stornoway's Board of Directors. The completion of the proposed
transaction is subject to the receipt of the requisite approval of
Concurrently with this agreement, SGF commits to contributing $100M to
the senior debt financing of this project.
"In the past eighteen months, we have established Renard as a large and
growing diamond resource with compelling economics, said Matt Manson,
President and CEO of Stornoway. We believe this transaction will be
equally beneficial to Stornoway's shareholders, to Québec, and to our
supportive community and regional stakeholders."
For the past several years, SGF has supported Québec's diamond
exploration and development activities through SOQUEM, one of its
wholly owned subsidiaries. "We are proud to support Stornoway's future
growth and contribute to the Renard diamond development project in
Québec, said Pierre Shedleur, President and General Manager of SGF. The
realization of this considerable project and the support we offer
Stornoway are true to SGF's mission."
Société générale de financement du Québec (sgfqc.com), an industrial and financial holding company, has a mission to carry
out economic development projects, particularly in the industrial
sector, in cooperation with partners and in compliance with accepted
profitability requirements and with the economic development policy of
the Québec government. As part of its new mandate, SGF is authorized by
the Québec government to go beyond its traditional role as an equity
investor by offering complementary solutions, such as loans, debentures
or preferred share investments.
SOURCE SOCIETE GENERALE DE FINANCEMENT DU QUEBEC
For further information: For further information:
Senior Advisor, Communications, SGF