Stornoway Diamonds (SWY-T;
$0.69) has delivered stellar results from its
new scoping study of the Renard system in
Québec. The updated study is a huge improvement
from the prior version in terms of
both deposit size and projected revenues.
The market has taken note. The study indicates
output of plus 1 million carats per year
over 25 years, after a capital cost of C$511
million. The NPV was calculated at $885 million
using old diamond pricing, and estimated
at over $1 billion with more recent diamond
pricing which is over $500 million for the
50% that SWY owns. The company is
funded to move through the next study
phase. The market has been looking for a
diamond stock it could take hold of, and
these numbers are strong enough to give
Stornoway that role. SWY’s current share
total would support a higher price. There is
still final feasibility and financing to contend
with, but between partner SOQUEM and major
shareholder Agnico-Eagle it may not have
to look too far for funding. This story is getting
plenty of press again, in Canada at least,
and this too will help support a move to
higher prices.