Stornoway Announces FY2015 Results

Press Release

March 23, 2016

Stornoway Diamond Corporation (TSX-SWY; the “Corporation” or “Stornoway”) announced today its results for the truncated quarter and fiscal year ended December 31, 2015. These results are pursuant to Stornoway’s recent change in year end from April 30 to December 31, undertaken to better align the Corporation’s financial, operational and regulatory reporting ahead of first production at the Renard Diamond Project.

Quarter ended December 31, 2015 and FY2015 Highlights

(All quoted figures as at December 31, 2015 and in CAD$)

Progress at the Renard Diamond Project continues well within the planned schedule and budget.
Incurred costs and commitments at the quarter-end totalled $548.5 million, or 71% of budget.
Construction progress stood at 63.3% compared to (an initial) plan of 59.6%, with detailed engineering substantially complete.
On site manpower during the month of December averaged 384 workers, of which 21% were Crees of the Eeyou Istchee.
Mining in the Renard 2-3 and Renard 65 open pits stood at 5,975,813 tonnes, or 104% of plan, and underground mining development stood at 887 meters, or 72% of plan.
During the two month period ended December 31, 2015, construction focused on secondary steel, mechanical, piping and electrical installation and on the project’s major facilities such as the process plant, LNG storage facility, power plant, primary crusher, water treatment facility and processed kimberlite load-out. All were well advanced at December 31, 2015.
For the two month period ended December 31, 2015, the Corporation reported a net loss of $4.3 million or $0.01 per share basic and fully diluted, and for the eight-month period ended December 31, 2015 a net loss of $3.7 million or $Nil per share basic and fully diluted.
Cash, cash equivalents and short-term investments stood at $209.1 million[1]. Excess financing capacity available to complete the project, comprising surplus cash and available cost-overrun facilities, is now forecast to be $117 million, assuming the satisfaction of all covenants and conditions precedent relating to future funding commitments and a CAD$:US$ conversion rate of $1.35.

Subsequent to December 31, 2015, the project’s construction schedule was re-baselined with first ore delivery to the Renard diamond process now expected by the end of September 2016 and commercial production (60% of plant capacity achieved over 30 days) expected by December 31, 2016. This represents a five month improvement on the previous schedule, which assumed commercial production in the second calendar quarter of 2017. The re-baselined schedule resulted in a commensurate reduction in the forecast cost to complete, from $811 million to $775 million.

Matt Manson, President and CEO, commented “Construction progress at Renard continued to track ahead of schedule during the last two months of our truncated FY2015, which gave us the confidence to re-baseline our schedule and cost to complete forecasts for future progress reporting. At the end of February construction progress stood at 74.1% compared to the new plan of 72.4%, as our construction team continued to out-perform expectations. An updated mine plan for the project, based on the results of the updated 2015 Mineral Resource and revised construction schedule, will be released shortly. With the diamond market beginning to recover after a challenging 12 months, we look forward to achieving first diamond production at Renard later this year based on a foundation of solid project execution and with a stronger than expected balance sheet.”

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