Monday, June 13, 2011

Valuation boosts Stornoway Diamond mine in Quebec

Stornoway Diamond Corp. says a new valuation adds up to 56 per cent to the base price estimate of diamonds at its flagship project in northern Quebec.

The valuation of bulk sample diamonds at the Renard project was done in connection with an ongoing feasibility study, the company said Monday.

Samples from Renard 2 and 3 kimberlite pipes saw price estimates increase 56 per cent to $182 U.S. per carat while samples from the Renard 4 pipe saw an increase of 49 per cent to $112 U.S. per carat.

“This comprehensive new valuation of the Renard bulk sample diamonds has confirmed the substantial increases in rough diamond prices of the last 18 months, brought about by sustained demand growth and tightening mine supply,” Matt Manson, Stornoway CEO, said in a statement.

The feasibility study is expected to be delivered in the third quarter, he said.

The $511-million Renard project is located in the Otish Mountains area of the James Bay region.

A preliminary economic assessment said that the project could potentially produce 30 million carats of diamond over a 25-year mine life. The net value of the project was set at $885 million.

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