Fox Mine | No diamond specialists were interested

Shutdown since last fall, the Renard mine did not interest any diamond specialist. These are Australian interests which are positioning themselves to scoop up this complex – which has cost taxpayers hundreds of millions – with the aim of assessing whether its vocation can be converted to lithium.

There has been only one serious bid for the assets of Stornoway Diamonds, reveals the most recent report from controller Deloitte, which is overseeing the legal restructuring of this company under the protection of the Companies’ Creditors Arrangement Act ( LACC).

On Thursday, Winsome Resources should obtain the green light from the Superior Court of Quebec to benefit from a six-month purchase option, which could be extended until February 2025, at a price of 52 million – far from the approximately 700 million public funds swallowed up in the diamond project.

“There is still a lot of reusable equipment at the Renard mine,” says the director of Winsome’s Canadian activities, Carl Caurmartin. We are giving ourselves six months to make the evaluations and determine if we can determine the treatment infrastructure (crushers, conveyors and concentrator). »

There are also water treatment facilities, a mining tailings park, a camp that can accommodate workers and an electrical production facility, adds Mr. Caumartin. This is what makes the option of changing vocation attractive, since it could prove less expensive than the construction of a new treatment site.

Last December, the Australian mining company unveiled a first estimate of mineral resources which made its Adina project, in James Bay, the fifth largest in Quebec in the lithium niche, alongside Sayona (in Moblan), Nemaska , Corvette and Arcadium. Lithium is used in the manufacture of cathodes, the positive pole of the lithium-ion battery found in electric vehicles. The Winsome deposit is located about sixty kilometers north of the Renard complex.

Stopped for a long time

The purchase option which must be granted to Winsome means that nothing suggests a revival of activities in the short term, as The Press reported it. Stornoway took shelter from its creditors on October 27, thereby rendering 425 employees, or 80% of its workforce, unemployed. On March 27, the company’s approximately 520 employees were officially dismissed, according to the notice sent to the Ministry of Employment and Social Solidarity.

Read “The adventure draws to a close”

Located on the Eeyou Istchee territory, in Northern Quebec, the Renard mine has constantly been confronted with financial challenges. It restarted in 2020 after a first judicial restructuring under the CCAA. Its shareholders were Osisko, Investissement Québec – the financial arm of the Quebec state –, the Caisse de dépôt et placement du Québec (CDPQ) and Triple Flag.

Few interested

The Deloitte report reveals that there was no rush at the doors to snatch up the diamond complex. Of the 68 potential buyers approached by the controller since last fall, only two non-binding proposals were received. Winsome was the only company to go further with a binding offer.

“This perhaps reflects the reality that it was a marginal deposit that was difficult to exploit,” says Mr. Caumartin, adding that Winsome had no intention of making an incursion in the diamond niche.

According to data from Natural Resources Canada, there were five active diamond mines in the country including the Renard complex.

Stornoway blamed its most recent fall on the plummeting price of jewelry diamonds. It collapsed in reaction to competition from synthetic stones. In March 2023, the price of a jewelry diamond was close to US120 million per carat. Six months later, it had plunged to around $81.50. Prices have since recovered. On Wednesday, the carat price was trading around US$108.

Learn more

  • 2016
    Inauguration of the Renard mine.

    stornoway diamonds

    Relaunch of activities after an initial financial debacle.

    the press


Leave a Comment