Canadian diamond exploration and development company Stornoway Diamond Corp (TSX: SWY) has secured financing for the large-scale construction of its Renard Diamond Project in the James Bay region of north-central Québec. The entire transaction, totaling $944 million, will include commitments from global private equity firm Orion Mine Finance Group, Ressources Québec, an affiliate of Investissement Québec, and the Caisse de dépôt et placement du Québec. Orion will invest US$360 million, while Ressources Québec and the Caisse will contribute $220 million and $105 million, respectively. The Montréal-based Stornoway said the deal represents the largest project funding package for a public diamond company.
Stornoway Announces Renard Project Financing Agreement
Comprehensive C$944 Million Financing Package to Fund Renard to Production
April 9, 2014
Stornoway Diamond Corporation (TSX-SWY; the “Corporation” or “Stornoway”) is pleased to announce that it has entered into a binding financing commitment agreement (the “Agreement”) with Orion Co-Investments I Limited (“Orion”), Ressources Québec (“RQ”), a wholly-owned subsidiary of Investissement Québec, and the Caisse de dépôt et placement du Québec (“CDPQ”) for the construction of the Renard Diamond Project.
The Agreement contemplates a series of proposed financing transactions totalling C$944m (the “Financing Transactions”) with funding commitments of US$360m from Orion, C$220m from RQ and C$105m from CDPQ, a marketed offering of common share subscription receipts and an equipment financing facility with Caterpillar Financial (“Caterpillar”).
Each element of the Financing Transactions is conditional upon the completion of the others and the successful completion of the marketed subscription receipt offering. Additional closing conditions include the approval of Stornoway’s shareholders and the settlement of definitive agreements.
The Financing Transactions are designed to provide full funding to project completion. Taken together, they represent the largest ever project financing package for a publicly listed diamond company.
Highlights of the Financing Transactions are as follows. All US dollar (“US$”) figures converted into Canadian dollars (“C$”) assume an exchange rate of US$1.00 for C$1.10.
A C$427m offering of common share subscription receipts, being:
C$243mto be subscribed for by Orion, RQ and CDPQ by way of private placements in the amounts of US$110m, C$100m and C$22m, respectively; and
C$184mto be offered to the public by way of a concurrent prospectus offering in Canada led by Scotiabank, Dundee Capital Markets and RBC Capital Markets;
A C$275m forward sale of diamonds by way of a Streaming Agreement, being:
US$200m paid by Orion in connection with a 16% streaming interest; and
US$50m paid by CDPQ in connection with a 4% streaming interest;
C$155m in two debt facilities, being:
a C$100m Tranche “A” senior secured loan from RQ, bearing an initial interest rate of prime plus 4.75% with a ten year term; and
a US$50m convertible unsecured loan from Orion bearing an interest rate of 6.25% with a seven year term;
An additional C$48m in committed but initially unfunded cost overrun credit facilities, being:
a C$20m Tranche “B” senior secured loan from RQ; and
a C$28m unsecured non-convertible loan from CDPQ.
Stornoway further announces that it has concurrently entered into a mandate letter with Caterpillar to arrange and underwrite an equipment financing facility for a minimum of US$35m for the purchase of certain mine equipment items manufactured by Caterpillar and others, including the project’s mobile mining fleet. Closing of the equipment financing facility will be subject to completion of due diligence, underwriting, credit approval, definitive documentation and other customary conditions precedent, including compliance requirements under applicable laws.
Matt Manson, Stornoway’s President and CEO, commented: “We are announcing today a comprehensive, one-shot financing package of C$944m designed to fund Renard through construction to the declaration of commercial production, and including all contingencies, capital escalation allowances, working capital requirements, and financing costs. These transactions have been carefully structured through a balance of debt, equity and stream with a goal of allowing full participation by our shareholders in the value that will be created with the project’s development. With our permits in hand, and the Renard Mine Road and Aerodrome already in place and ready for use, the successful completion of these transactions will remove the last remaining financing risk for the project and allow principal project construction to commence. We look forward to presenting the financing of Québec’s first diamond mine for approval by shareholders at a special meeting to be held in Montreal at the end of May 2014.”
The parties to the Financing Transactions include the Orion Mine Finance Group, one of the world’s leading mining-focused private equity businesses; the Government of Québec, by way of Investissement Québec; and CDPQ, one of Canada’s largest institutional investors. Stornoway’s financial advisors in relation to the Financing Transactions are Scotiabank and Dundee Capital Markets Inc. and its legal advisors are Norton Rose Fulbright.
Stornoway’s board of directors has determined that the comprehensive financing package set forth in the Agreement is in the Corporation’s best interests in that it will allow Stornoway to fully finance the construction of the Renard Diamond Project. This determination was based on a number of factors, including the unanimous recommendation of a special committee of directors formed to consider the Corporation’s financing alternatives and a fairness opinion received from Primary Capital Inc. as financial advisor to the special committee.
The proceeds of the C$427m common share subscription receipt offering and US$50m convertible loan, for a total of approximately C$482m, will be fully funded at the closing of the Financing Transactions, which is anticipated to occur in June 2014, and will be immediately available to Stornoway for project construction, subject to fulfilment of the conditions to closing of the Financing Transactions described below under “Closing of the Financing Transactions.”
A summary of the key terms of the various elements of the Financing Transactions follows, which are described in greater detail in the Agreement and the preliminary short form prospectus that will be available on the SEDAR website maintained by the Canadian securities administrators at www.SEDAR.com. This summary does not purport to be complete and reference should be made to the full text of the Agreement and the preliminary short form prospectus.
On the closing date of the Financing Transactions, the Corporation, through its wholly-owned subsidiary Stornoway Diamonds (Canada) Inc. (“SDCI”) will enter into a streaming agreement with Orion and CDPQ (the “Buyers”) pursuant to which SDCI shall sell to the Buyers a 20% undivided interest in the diamonds produced from the Renard Diamond Project in a proportion of 16% to Orion and 4% to CDPQ (the “Streaming Agreement”). This financing arrangement provides for SDCI to oversee the sale process of the produced diamonds on the diamond market and direct proceeds of same to the Buyers. The Streaming Agreement will apply to all diamonds produced over the life of the Renard Diamond Project from the Renard 2, 3, 4, 9, and 65 kimberlites, and to the first 30 million carats produced from any ore bodies forming part of Renard, including the above-mentioned kimberlites. Pursuant to the terms of the Streaming Agreement, the Buyers will make deposits to SDCI on account of the purchase price in an aggregate amount of US$250m, which will be disbursed in three instalments, subject to the fulfilment of certain funding conditions, as follows: (i) US$80m on March 31, 2015, (ii) US$80m between four and six months after the first instalment, and (iii) US$90m between 10 and 12 months after the first instalment. Until the full amount of the deposits are offset, the purchase price for the diamonds will be the market price obtained upon sale of the diamonds, paid in part in cash equal to US$50 per carat (subject to a 1% escalation beginning three years after commencement of commercial production) (the “Per Carat Cash Price”) with the remainder offset against the deposits. Thereafter, the purchase price for the diamonds will be the Per Carat Cash Price. The Buyers will also reimburse marketing expenses estimated at up to 3% of gross proceeds of sale.
SDCI will be required to pay the Buyers a standby fee of 1% per annum based on the average daily undisbursed instalments, payable quarterly in arrears, with availability under the Streaming Agreement terminating on March 31, 2017, which may be extended to March 31, 2018 in certain circumstances more fully described in the Agreement. In addition to the standby fee, a fee of 1% per annum based on the then-undisbursed instalments commencing March 31, 2016, payable quarterly in arrears, will apply if the Buyers have not disbursed the final instalment by March 31, 2016, due to conditions of funding not having been satisfied nor waived.
Public Offering and Concurrent Private Placement
Stornoway has filed a preliminary short form prospectus for the marketed public offering of C$184m common share subscription receipts (the “Public Offering”). In addition, Stornoway expects to grant the underwriters an option to purchase additional subscription receipts for gross proceeds of up to 15% of the Public Offering to cover over-allotments. Closing of the Public Offering will be subject to certain conditions and is expected to take place in early May 2014. The net proceeds of the Public Offering will be held in escrow pending the completion of the Financing Transactions and, upon satisfaction of the escrow release conditions, purchasers of subscription receipts will be entitled to receive, without payment of additional consideration or further action, one Stornoway common share for each subscription receipt held. If these conditions have not been satisfied by June 1, 2014 or such later date as may be agreed among Stornoway, Orion, RQ and CDPQ (but not later than October 1, 2014), then the subscription receipts shall be automatically cancelled and the escrow agent shall remit to holders of subscription receipts an amount equal to the original purchase price plus accrued interest.
The amount of the C$184m public subscription receipt offering may be decreased, on a dollar for dollar basis, if the principal amount of the convertible unsecured loan acquired by Orion (or other co-investors or purchasers) exceeds US$50m (C$55m), up to a maximum amount of US$90m (C$99m), provided that the total proceeds from these two components of the Financing Transactions will not be less than C$239m.
Stornoway has applied to list the subscription receipts and the common shares issuable pursuant to the terms of the subscription receipts on the TSX. Listing is subject to Stornoway fulfilling all of the listing requirements of the TSX.
Concurrently with the Public Offering, Stornoway will complete private placements of subscription receipts in an aggregate of C$243m to Orion (US$110m), RQ (C$100m) and CDPQ (C$22m) for a price per subscription receipt equal to the offering price under the Public Offering and otherwise on the same terms and conditions as the Public Offering (the “Concurrent Private Placements”), except that Orion, RQ and CDPQ will be paid a placement fee equal to 4% of the aggregate amount subscribed for under the private placements, or C$9.7m, payable upon closing of the Financing Transations in Stornoway common shares issued at the Public Offering price.
A preliminary short form prospectus containing important information relating to the securities being offered under the Public Offering has been filed with securities commissions or similar authorities in certain jurisdictions of Canada. The preliminary short form prospectus is still subject to completion or amendment. Copies of the preliminary short form prospectus may be obtained from Scotiabank, 40 King Street West, 66th Floor, Toronto, Ontario M5W 2X6; Dundee Securities Ltd., 1 Adelaide Street East, Suite 2100, Toronto, Ontario M5C 2V9; or RBC Capital Markets, 200 Bay Street, Toronto, Ontario M5J 2W7. There will not be any sale or any acceptance of an offer to buy the securities until a receipt for the final prospectus has been issued.
Senior Secured Loan
On the closing date of the Financing Transactions, RQ will execute the loan agreement providing for the senior secured loan in a principal amount of C$100m (Tranche “A”), with the possibility to increase the loan, at the discretion of SDCI, by an amount of up to C$20m by way of an accordion feature (Tranche “B”) as a cost overrun facility (described below under “Unsecured Cost Overrun Facilities”). The Tranche “A” loan will have a 10-year maturity, and may be drawn in up to four drawdowns, subject to the fulfilment of specified conditions precedent to funding and will, at SDCI’s option, bear interest at a floating rate equal to the most common prime rate announced by Schedule I Canadian banks, plus 4.75% per annum (4.25% following completion being met) or, subject to availability, at a fixed rate based on the then available Government of Québec bonds for any applicable periods plus 5.75% per annum (5.25% following completion being met). The principal amount of the Tranche “A” loan will be payable in equal semi-annual instalments on June 30 and December 31 of each year commencing on the earlier of (i) the first payment date occurring six months following commencement of commercial production and (ii) the first payment date which falls 42 months after the closing date of the Financing Transactions. Interest will be paid in arrears at the end of each quarter.
Unsecured Convertible Loan
On the closing date of the Financing Transactions, Orion will subscribe for an unsecured convertible loan from Stornoway in a principal amount of US$50m (with the right to acquire up to US$90m) with a seven-year maturity. The convertible loan will be issued at a discount of 3.0% of the principal amount thereof. There will be no repayment of principal until the maturity date, and interest will accrue at a rate of 6.25% per annum from the closing date, payable semi-annually. Stornoway will be entitled to elect, from time to time, subject to applicable regulatory approval (including TSX approval), to satisfy its obligation to pay interest on the convertible loan (i) in cash; (ii) by delivering sufficient common shares for sale by the trustee under the convertible loan to satisfy the Corporation’s interest obligations; or (iii) any combination of (i) and (ii) above. The share payment option will only be exercisable on seven non-consecutive interest payment dates during the life of the convertible loan. The convertible loan will be convertible at the option of the holder into Stornoway common shares at any time prior to the close of business on the earlier of the maturity date and the date fixed for redemption at a conversion price calculated at a 35% premium to the Public Offering price. The convertible loan will not be redeemable before the third anniversary of the closing date of the Financing Transactions. On or after such date, Stornoway may redeem the convertible loan, in whole or in part, provided that the weighted average closing price of the Stornoway common shares on the TSX during the 20 consecutive trading days ending on the trading day preceding the date the redemption notice is given is not less than a 35% premium to the conversion price.
Cost Overrun Facilities
Stornoway has also arranged for C$48m principal amount of cost overrun facilities, consisting of a C$20m Tranche “B” senior secured loan from RQ to SDCI and a C$28m unsecured non-convertible loan from CDPQ to Stornoway (the “CDPQ Loan”). These facilities may only be drawn, subject to certain conditions, to fund cost overruns at the Renard Diamond Project.
The Tranche “B” loan will have a maturity date of seven years from the closing date of the Financing Transactions and will bear interest at the same rate as the Tranche “A” loan. The principal amount of the Tranche “B” loan, if drawn, will be payable in equal semi-annual instalments on June 30 and December 31 of each year, commencing on the earlier of (i) the first payment date occurring six months following commencement of commercial production and (ii) the first payment date which falls 42 months after the closing date of the Financing Transactions.
The CDPQ Loan will have a maturity date of seven years from the closing date of the Financing Transactions and bear interest at a rate of 10.0% per annum, payable semi-annually from the first date that it is drawn. Stornoway may elect, from time to time before commencement of commercial production, subject to applicable regulatory approvals, to satisfy its obligation to pay interest on the CDPQ Loan (if drawn) (i) in cash; (ii) by delivering sufficient common shares to CDPQ to satisfy the interest obligations under the CDPQ Loan; or (iii) any combination of (i) and (ii) above. The share payment option will only be exercisable on five non-consecutive interest payment dates during the life of such loan. Upon commencement of commercial production, Stornoway will have the obligation to pay interest on such loan (if drawn) in cash. In consideration for providing the CDPQ Loan, Stornoway has also agreed to issue warrants exercisable to acquire 14,000,000 Stornoway common shares at a price equal to a 35% premium to the Public Offering price. The warrants will have a five-year term from the date of issue and will not be listed on the TSX.
Special Meeting of Shareholders
Stornoway intends to convene a special meeting of shareholders to be held at the end of May 2014 to submit to shareholders the consideration and approval of various elements of the Financing Transactions described in this press release in accordance with applicable regulatory and TSX requirements. Stornoway expects to mail a management information circular describing the various financing elements contemplated by the Agreement in greater detail shortly following the filing of the final prospectus in connection with the Public Offering.
Closing of the Financing Transactions
The Financing Transactions contemplated by the Agreement are intended to provide a comprehensive project financing package for the construction of the Renard Diamond Project. Closing of the Financing Transactions will be subject to, among other things, the execution of definitive agreements relating to each element of the Financing Transactions, the closing of the Public Offering in accordance with its terms and the fulfilment of the conditions to the release of the escrowed subscription receipt proceeds, the receipt of regulatory approvals (including approval of the TSX) and approval of Stornoway’s shareholders at the special meeting. Each element of the Financing Transactions will be conditional on the completion of each of the other financing elements.
Project Schedule and Budget
The project development schedule contained within the January 2013 Optimized Feasibility Study contemplated project construction mobilization starting in August 2013, with plant commissioning beginning in December 2015 and commercial production achieved by June 2016. With the Financing Transactions announced today, Stornoway anticipates an approximately 11-month set-back to this schedule, with the project construction commencing in June 2014, plant commissioning beginning in Q3 2016 and commercial production achieved in Q2 2017. This schedule set-back implies an estimated incremental increase of C$10.6m in the project’s capital cost estimate that was contained within the January 2013 Optimized Feasibility Study, and as subsequently adjusted in the October 2013 LNG power plant feasibility study, based on cost escalation factors currently in use in Quebec.
Conference Call Details
The Corporation’s senior management team will host a conference call on Thursday, April 10, 2014 at 9:00am ET (6:00 am PT and 2:00 pm GMT) to discuss the Agreement announced today and provide an update on the Renard Diamond Project.
Participants in Canada may join the call by dialling 416-764-8658 or 1-888-886-7786 for calls outside of Canada. Participants in the United Kingdom may join by dialling 0800 028 6441.
A recorded playback of the conference call can be accessed after the event by dialing 416-764-8691 or 1-877-674-6060. The pass code for the conference call playback is 517931. and an archived audio webcast will be available on the Corporation’s website at www.stornowaydiamonds.com.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of any securities referred to in this press release in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction. The securities being offered have not been approved or disapproved by any regulatory authority, nor has any such authority passed upon the accuracy or adequacy of the preliminary short form prospectus.
About the Renard Diamond Project
The Renard Diamond Project is located approximately 250 km north of the Cree community of Mistissini and 350 km north of Chibougamau in the James Bay region of north-central Québec. In November 2011, Stornoway released the results of a Feasibility Study at Renard, followed by an Optimization Study in January 2013, which highlighted the potential of the project to become a significant producer of high value rough diamonds over a long mine life. Probable Mineral Reserves, as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”), stand at 17.9 million carats. Total Indicated Mineral Resources, inclusive of the Mineral Reserve, stand at 27.1 million carats, with a further 16.85 million carats classified as Inferred Mineral Resources, and 25.7 to 47.8 million carats classified as non-resource exploration upside. Readers are cautioned that the potential quality and grade of any target for further exploration is conceptual in nature, there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the target being delineated as a Mineral Resource. All kimberlites remain open at depth. Readers are referred to the technical report dated December 29th, 2011 in respect of the November 2011 Feasibility Study for the Renard Diamond Project, and the technical report dated February 28th, 2013 in respect of the January 2013 Optimization Study, for further details and assumptions relating to the project. Disclosure of a scientific or technical nature in this press release was prepared under the supervision of Robin Hopkins, P.Geol. (NT/NU), Vice President, Exploration, a “qualified person” under NI 43-101.
About Stornoway Diamond Corporation
Stornoway is a leading Canadian diamond exploration and development company listed on the Toronto Stock Exchange under the symbol SWY and headquartered in Montreal. Our flagship asset is the 100% owned Renard Diamond Project, on track to becoming Québec’s first diamond mine. Stornoway is a growth oriented company with a world class asset, in one of the world’s best mining jurisdictions, in one of the world’s great mining businesses.
On behalf of the Board
STORNOWAY DIAMOND CORPORATION
/s/ “Matt Manson”
President and Chief Executive
For more information, please contact Matt Manson (President and CEO) at 416-304-1026 x101
or Orin Baranowsky (Director, Investor Relations) at 416-304-1026 x103
or toll free at 1-877-331-2232
Pour plus d’information, veuillez contacter M. Patrick Godin Vice-président et Chef des opérations de
Stornoway au 450-616-5555 ext 200, firstname.lastname@example.org
** Website: www.stornowaydiamonds.com Email: email@example.com **
This press release contains “forward-looking information” within the meaning of Canadian securities legislation. This information and these statements, referred to herein as “forward-looking statements”, are made as of the date of this press release and the Corporation does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by law.
Forward-looking statements relate to future events or future performance and reflect current expectations or beliefs regarding future events and include, but are not limited to, statements with respect to: (i) the amount of mineral resources and exploration targets; (ii) the amount of future production over any period; (iii) net present value and internal rates of return of the mining operation; (iv) assumptions relating to recovered grade, average ore recovery, internal dilution, mining dilution and other mining parameters set out in the Feasibility Study or the Optimization Study; (v) assumptions relating to gross revenues, operating cash flow and other revenue metrics set out in the Feasibility Study or the Optimization Study; (vi) mine expansion potential and expected mine life; (vii) expected time frames for completion of permitting and regulatory approvals and making a production decision; (viii) the expected time frames for the completion of the Route 167 extension and the financial obligations or costs incurred by Stornoway in connection with such road extension; (ix) future exploration plans; (x) future market prices for rough diamonds; (xi) the economic benefits of using liquefied natural gas rather than diesel for power generation; (xii) sources of and anticipated financing requirements; (xiii) the closing of the Financing Transactions; (xiv) the completion and release of the proceeds of the Public Offering and Private Placements and funding of the Convertible Loan and the use of proceeds therefrom, (xv) the completion, effectiveness or availability, as the case may require, of the other elements of the Financing Transactions and the use of proceeds therefrom; (xvi) the impact of the Financing Transactions on the Corporation’s operations, infrastructure, opportunities, financial condition, access to capital and overall strategy; and (xvii) the anticipated timing of the shareholder meeting. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “projects”, “estimates”, “assumes”, “intends”, “strategy”, “goals”, “objectives”, “schedule” or variations thereof or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.
Forward-looking statements are made based upon certain assumptions by Stornoway or its consultants and other important factors that, if untrue, could cause the actual results, performances or achievements of Stornoway to be materially different from future results, performances or achievements expressed or implied by such statements. Such statements and information are based on numerous assumptions regarding present and future business prospects and strategies and the environment in which Stornoway will operate in the future, including the price of diamonds, anticipated costs and Stornoway’s ability to achieve its goals, anticipated financial performance, regulatory developments, development plans, exploration, development and mining activities and commitments. Although management considers its assumptions on such matters to be reasonable based on information currently available to it, they may prove to be incorrect. Certain important assumptions by Stornoway in making forward-looking statements include, but are not limited to: (i) required capital investment and estimated workforce requirements; (ii) estimates of net present value and internal rates of return; (iii) receipt of regulatory approvals on acceptable terms within commonly experienced time frames; (iv) the assumption that a production decision will be made, and that decision will be positive; (v) anticipated timelines for the commencement of mine production; (vi) anticipated timelines related to the completion of the Route 167 extension and the impact on the development schedule at Renard; (vii) market prices for rough diamonds and the potential impact on the Renard Diamond Project; (viii) Stornoway’s ability to consummate the financing transactions set forth in the Agreement to enable it finance the development and construction of the Renard Diamond Project; and (ix) future exploration plans and objectives. Additional risks are described in Stornoway’s most recently filed Annual Information Form, annual and interim MD&A, the preliminary short form prospectus filed for the marketed Public Offering and other disclosure documents available under the Corporation’s profile at: www.sedar.com.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that estimates, forecasts, projections and other forward-looking statements will not be achieved or that assumptions do not reflect future experience. We caution readers not to place undue reliance on these forward-looking statements as a number of important risk factors could cause the actual outcomes to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates, assumptions and intentions expressed in such forward-looking statements. These risk factors may be generally stated as the risk that the assumptions and estimates expressed above do not occur, including the assumption in many forward-looking statements that other forward-looking statements will be correct, but specifically include, without limitation, (i) risks relating to variations in the grade, kimberlite lithologies and country rock content within the material identified as mineral resources from that predicted; (ii) variations in rates of recovery and breakage; (iii) the uncertainty as to whether further exploration of exploration targets will result in the targets being delineated as mineral resources; (iv) developments in world diamond markets; (v) slower increases in diamond valuations than assumed; (vi) risks relating to fluctuations in the Canadian dollar and other currencies relative to the US dollar; (vii) increases in the costs of proposed capital and operating expenditures; (viii) increases in financing costs or adverse changes to the terms of available financing if any; (ix) tax rates or royalties being greater than assumed; (x) uncertainty of results of exploration in areas of potential expansion of resources; (xi) changes in development or mining plans due to changes in other factors or exploration results; (xii) changes in project parameters as plans continue to be refined; (xiii) risks relating to the receipt of regulatory approvals or the implementation of the existing Impact and Benefits Agreement with aboriginal communities; (xiv) the effects of competition in the markets in which Stornoway operates; (xv) operational and infrastructure risks; (xvi) execution risk relating to the completion of the Route 167 extension; (xvii) the closing conditions of the Agreement, or the conditions to the release of the proceeds of the Public Offering and the Private Placements, not being satisfied; (xviii) failure to receive regulatory approvals (including stock exchange), shareholder approval or other approvals or otherwise satisfy the conditions to the completion, effectiveness or availability, as the case may require, of each of the elements of the Agreement; (xix) failure to complete the various elements of the Agreement on acceptable terms or at all; (xx) changes in the terms of the various elements of the Agreement; (xxi) the funds of some of the elements of the Agreement not being available to the Corporation; (xxii) future sales or issuances of Common Shares lowering the Common Share price and diluting the interest of existing shareholders; (xxiii) Stornoway being unable to meet its diamond delivery obligations under the Streaming Agreement, and (xxiv) the additional risks described in Stornoway’s most recently filed Annual Information Form, annual and interim MD&A and the preliminary short form prospectus filed for the marketed Public Offering, and Stornoway’s anticipation of and success in managing the foregoing risks. Stornoway cautions that the foregoing list of factors that may affect future results is not exhaustive, and new, unforeseeable risks may arise from time to time.
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