Stornoway Diamond is currently the operator of the Renard Mine in Quebec.
There is still a minor public market for shares of Stornoway on the US OTC listings.
https://www.stockwatch.com/Quote/Detail.aspx?symbol=SWYDF®ion=U
Significant volume that is probably being used for funds and such to cause an official paper transaction for accounting purposes.
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*FINAL UPDATE*
Stock has been delisted from Canada. Debtors have now formed ownership and courts have approved everything. Shareholders and Debenture holders get nothing in the end.
The cash calls listed below (or all information below) is now legacy and are no longer relevant.
Final updates can be had on the Deloitte site -- Deloitte updates
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*UPDATE*
Stock will be delisted from the Toronto Stock Exchange on October 18th, 2019.
The assets are before the courts in a bankruptcy proceeding where the debt holders already have an LOI (letter of intent) arrangement for what the outcome of Renard will look like and who will hold it.
For updated information on the legal proceedings, Deloitte has a great site with all the details and updates as they come in -- Deloitte updates
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Legacy:
An investment in this stock (listed on the TSX) is fraught with various debts, streaming agreements, blended operating costs, etc. I'm going to finally take a stab at figuring it all out on this blog page.
Today is March 3rd, 2019. Let's give it 30 days to see if I can finalize anything. Details listed below will be an estimate based on information obtained via best efforts through the public web. Any validation of the details should be completed by the reader as needed.
Let's itemize everything and start with the easy stuff...then go into more complicated items.
First up, the US Debentures. But before we go there...lets do a running total of the Upcoming Cash Calls as we develop the details.
Update - June 11th, 2019 - Bridge financing announced.
Individual Cash Calls (more to be added):
CAD$230,000 Jun 30th, 2019 (Other secured debt - interest plus principal payment)
CAD$800,000 Jun 30th, 2019 (Caterpillar - interest)
CAD$11,900,000 Sep 16th 2019 (Bridge financing - interest plus full principal payment)
(****Sale of all assets might be complete******)
CAD$230,000 Sep 30th, 2019 (Other secured debt - interest plus principal payment)
CAD$800,000 Sep 30th, 2019 (Caterpillar - interest)
CAD$385,000 Dec 31st, 2019 (Jun 30th deferred Unsecured Debt Facility #1 - int payment)
CAD$385,000 Dec 31st, 2019 (Sep 30 deferred Unsecured Debt Facility #1 - int payment)
US$2,540,000 Dec 31st 2019 (June 30th deferred - US Debenture interest payment)
US$2,540,000 Dec 31st 2019 (US Debenture interest payment)
CAD$3,500,000 Dec 31st 2019 (Road Debt Facility interest plus principal payment)
CAD$385,000 Dec 31st, 2019 (Unsecured Debt Facility #1 - interest payment)
CAD$230,000 Dec 31st, 2019 (Other secured debt - interest plus principal payment)
CAD$4,800,000 Dec 31st, 2019 (Caterpillar - interest plus principal)
CAD$385,000 Mar 31st, 2020 (Unsecured Debt Facility #1 - interest payment)
CAD$230,000 Mar 31st, 2020 (Other secured debt - interest plus principal payment)
CAD$800,000 Mar 31st, 2020 (Caterpillar - interest)
CAD$385,000 Jun 30th, 2020 (Unsecured Debt Facility #1 - interest payment)
CAD$230,000 Jun 30th, 2020 (Other secured debt - interest plus principal payment)
CAD$800,000 Jun 30th, 2020 (Caterpillar - interest)
CAD$9,200,000 Jun 30th, 2020 (Unsecured Debt Facility #1 - interest payment)
US$2,540,000 Jun 30th 2020 (US Debenture interest payment)
CAD$4,800,000 Jun 30th 2020 (Senior Secured Loan interest payment)
CAD$37,000,000 Jun 30th 2020 (Senior Secured Loan principal payment)
CAD$100,000 Sep 30th, 2020 (Unsecured Debt Facility #1 - interest payment)
CAD$230,000 Sep 30th, 2020 (Other secured debt - interest plus principal payment)
CAD$800,000 Sep 30th, 2020 (Caterpillar - interest)
US$2,540,000 Dec 31st 2020 (US Debenture interest payment)
CAD$3,500,000 Dec 31st 2020 (Road Debt Facility interest plus principal payment)
CAD$4,800,000 Dec 31st, 2020 (Caterpillar - interest plus principal)
CAD$4,800,000 Dec 31st 2020 (Senior Secured Loan interest payment)
CAD$100,000 Dec 31st, 2020 (Unsecured Debt Facility #1 - interest payment)
CAD$230,000 Dec 31st, 2020 (Other secured debt - interest plus principal payment)
CAD$100,000 Mar 31st, 2021 (Unsecured Debt Facility #1 - interest payment)
CAD$230,000 Mar 31st, 2021 (Other secured debt - interest plus principal payment)
CAD$800,000 Mar 31st, 2021 (Caterpillar - interest)
CAD$3,700,000 May 3rd, 2021 (Unsecured Debt Facility #1 - maturity payment)
CAD$230,000 Jun 30th 2021 (Other secured debt - interest plus principal payment)
US$2,540,000 Jun 30th 2021 (US Debenture interest payment)
CAD$4,800,000 Jun 30th 2021 (Senior Secured Loan interest payment)
CAD$4,800,000 Jun 30th 2021 (Senior Secured Loan interest payment)
CAD$80,000,000 Jun 30th 2021 (Senior Secured Loan Maturity Payment)
CAD$800,000 Jun 30th, 2021 (Caterpillar - interest)
US$81,257,000 Jul 8th 2021 (US Debenture maturity payment)
CAD$230,000 Sep 30th 2021 (Other secured debt - interest plus principal payment)
CAD$800,000 Sep 30th, 2021 (Caterpillar - interest)
CAD$3,500,000 Dec 31st 2021 (Road Debt Facility interest plus principal payment)
CAD$230,000 Dec 31st 2021 (Other secured debt - interest plus principal payment)
CAD$4,800,000 Dec 31st, 2021 (Caterpillar - interest plus principal)
CAD$230,000 Mar 31st 2022 (Other secured debt - interest plus principal payment)
CAD$800,000 Mar 31st, 2022 (Caterpillar - interest)
CAD$230,000 Jun 30th 2022 (Other secured debt - interest plus principal payment)
CAD$800,000 Jun 30th, 2022 (Caterpillar - interest)
CAD$230,000 Sep 30th 2022 (Other secured debt - interest plus principal payment)
CAD$800,000 Sep 30th, 2022 (Caterpillar - interest)
CAD$230,000 Dec 31st 2022 (Other secured debt - interest plus principal payment)
CAD$3,500,000 Dec 31st 2022 (Road Debt Facility interest plus principal payment)
CAD$4,800,000 Dec 31st, 2022 (Caterpillar - interest plus principal)
CAD$230,000 Mar 31st 2023 (Other secured debt - interest plus principal payment)
CAD$800,000 Mar 31st, 2023 (Caterpillar - interest)
CAD$230,000 Jun 30th 2023 (Other secured debt - interest plus principal payment)
CAD$800,000 Jun 30th, 2023 (Caterpillar - interest)
CAD$230,000 Sep 30th 2023 (Other secured debt - interest plus principal payment)
CAD$800,000 Sep 30th, 2023 (Caterpillar - interest)
CAD$230,000 Dec 31st 2023 (Other secured debt - interest plus principal payment)
CAD$3,500,000 Dec 31st 2023 (Road Debt Facility interest plus principal payment)
CAD$26,900,000 Dec 31st, 2023 (Caterpillar - maturity payment)
CAD$230,000 Mar 31st 2024 (Other secured debt - interest plus principal payment)
CAD$230,000 Jun 30th 2024 (Other secured debt - interest plus principal payment)
CAD$230,000 Sep 30th 2024 (Other secured debt - interest plus principal payment)
CAD$230,000 Dec 31st 2024 (Other secured debt - interest plus principal payment)
CAD$3,500,000 Dec 31st 2024 (Road Debt Facility interest plus principal payment)
CAD$230,000 Mar 31st 2025 (Other secured debt - interest plus principal payment)
CAD$230,000 Jun 30th 2025 (Other secured debt - interest plus principal payment)
CAD$230,000 Sep 30th 2025 (Other secured debt - interest plus principal payment)
CAD$230,000 Dec 31st 2025 (Other secured debt - interest plus principal payment)
CAD$3,500,000 Dec 31st 2025 (Road Debt Facility interest plus principal payment)
CAD$230,000 Mar 31st 2026 (Other secured debt - interest plus principal payment)
CAD$230,000 Jun 30th 2026 (Other secured debt - interest plus principal payment)
CAD$230,000 Sep 30th 2026 (Other secured debt - interest plus principal payment)
CAD$230,000 Dec 31st 2026 (Other secured debt - interest plus principal payment)
CAD$3,500,000 Dec 31st 2026 (Road Debt Facility interest plus principal payment)
CAD$230,000 Mar 31st 2027 (Other secured debt - interest plus principal payment)
CAD$230,000 Jun 30th 2027 (Other secured debt - interest plus principal payment)
CAD$230,000 Sep 30th 2027 (Other secured debt - Maturity payment)
CAD$3,500,000 Dec 31st 2027 (Road Debt Facility interest plus principal payment)
CAD$3,500,000 Dec 31st 2028 (Road Debt Facility interest plus principal payment)
CAD$3,500,000 Dec 31st 2029 (Road Debt Facility interest plus principal payment)
CAD$3,500,000 Dec 31st 2030 (Road Debt Facility interest plus principal payment)
CAD$24,000,000 Dec 31st 2030 (Road Debt Facility Maturity Payment)
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Bridge Financing
Diaquem
Total Credit Amount -- CAD$11.7 million
Interest Rate = 8.25%
Creditor status = '1st ranked secured'
Maturity Date -- September 16th, 2019 (or earlier pending sale)
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US Debentures
The US Debentures were part of the original billion $ financing package and have not been adjusted by the creditors in any manner or form. They remain a listed entity on the TSX (SWY.DB).
News release - Late 2014 -- Debentures News
Total capital amount -- US$81,257,000
Convertible at CAD$0.945 per share (current price is at CAD$0.195) = Low probability
Interest - Pays interest up to end of June and end of December (twice per year).
Interest rate = 6.25%
Maturity Date -- July 8th, 2021
Interest payments remaining = 5 x US$2.54 million
Creditor status = 'unsecured'
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Mine Road Debt Facility
The Quebec contributed to the road up to the site in both direct contribution and also a CAD$77 million credit facility. SWY Used the facility for both the road (CAD$70 million) and part of the airport (CAD$7 million).
News release -- 2013 -- Road Facility News
Total capital amount -- CAD$77 million
Total amount remaining - Sept. 2018 -- CAD$51 million
Interest rate = 3.15%
Capital + payback - Roughly CAD$3.5 million (payment due Dec. 31st each year)
Original Term = 15 years.
Remaining Term = 12 years
Credit status = 'unsecured'
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Senior Secured Loan:
A senior secured loan from RQ in 2 tranches -- Tranche 'A' -- CAD$100 million and Tranche 'B' -- CAD$20 million.
News release -- 2014 -- Senior Secured Loan News
Current principal amount = CAD$117 million
Current interest rate = Prime rate + 4.25% (~8.25% total)
Interest payment bi-annual (calculated quarterly)
Principal deferral until June 30th, 2020 (CAD$37 million)
Accelerated maturity date to June 31st, 2021 (remaining amount)
Certain covenants need to be maintained (fine print)
Credit status = 'secured'
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Unsecured Debt Facility #1:
One of the oldest debt facilities on the books.
News release -- 2012 -- Unsecured Debt Facility News
Current principal amount = CAD$12.88 million
Current interest rate = 12%
Deferred principal payment until June 30th, 2020 (CAD$9.2 million)
Maturity Date - May 3rd, 2021
Paid in monthly installments (principal + interest CAD$0.4 million)
Will show interest as quarterly for this page.
Credit status = 'unsecured'
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Other secured debt:
This is in the financials and it looks like it was a liability that was brought on by a trigger of construction of a mine. This might go way back when the property itself transferred ownership with some fine print in the detail. At some point this changed from an unsecured debt to a secured debt in the last two or three years.
Current principal amount = CAD$11.3 million
Current interest rate = 5.5%
Paid quarterly ~CAD$230k (principal plus interest payment)
Maturity Date - Oct 1st, 2027
Credit status = 'secured'
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Caterpillar Finance facility:
This is secured to the equipment at site.
Current principal amount = CAD$46.7 million
Current interest rate = 3 mth Libor + 4% (~6.5%)
Paid in quarterly installments
US$3 million principal payment annually.
Maturity Date - 6 years from drawdown. Say 4 years left.
Credit status = secured against mining equipment
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That should be the big debt/liability load on the company.
The streaming agreement as it sits is probably easier to integrate into forecasting the revenue stream net to Stornoway going forward for the rest of the mine life.
Operating costs will be calculated on tonnage, not carats...as the streaming agreement complicates the margin calculations.
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Revenue net to Stornoway:
This is a bit complicated to say the least...but I will give it a try.
Diamonds smaller than +7DTC size
Revenue = 100% to Stornoway
Diamonds +7DTC size or larger
80% of stones sold = 100% $$'s to Stornoway
20% of stones sold = SWY receives US$40 per carat or 40% of actual sold cost...the lesser of the two. Basically means If average stone value > US$100, SWY gets US$40 per carat. If average stone value is < US$100, then SWY gets 40% of that price. Pricing will exclude all the -7 DTC stones.
Math time.
2 Tenders - 4th quarter 2018
# of carats = 254K sold
+7 DTC bucket = 190K
-7 DTC bucket = 64K
64K carats sold at US$15 per carat -- US$960K in SWY's revenue stream
190K carats sold US$118 per carat. This is greater then US$100 per carat.
SWY's share = 0.8*190K*US$118 + 0.2*190K*US$40 = US$14,900,000
Total revenue to SWY = US$15,860,000 over 250K carats or US$62 per carat on average.
Guidance:
"In 2019, Stornoway expects to produce between 1.80 and 2.10 mcarats from the processing of 2.40 to 2.55 mtonnes of ore. "
Revenue net to SWY for 2019 ~ US$120 million
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Further Analysis for Renard:
I have completed some snapshot analysis and will add more snapshots over time.
Snapshot 1 (early March 2019) -- Snapshot 1
Snapshot 2 (late April 2019) -- Snapshot 2
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History of the Streaming Agreement:
Here is a brief sequence of ownership over the life of the project.
April 2014: Ownership: Orion - 16%, CDPQ - 4%
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;
March 2016: ownership: Orion/Blackstone - 16%, CDPQ 4%
Stornoway Diamond Corporation (TSX-SWY; the “Corporation” or “Stornoway”) is pleased to announce that it has successfully completed the drawdown of the third and final US$90m tranche of diamond stream funding from Orion Mine Finance (“Orion”), the Caisse de dépôt et placement du Québec (“CDPQ”) and Blackstone Tactical Opportunities (“Blackstone”).
October 2018: ownership Osisko/Triple Flag/Albion/Washington State Invesment - 16%, CDPQ 4%
FCDC entered into an amended and restated Purchase and Sale Agreement (the “Amended Renard Streaming Agreement”) with Osisko Gold Royalties Ltd, Caisse de dépôt et placement du Québec (“la Caisse”), Triple Flag Mining Finance Bermuda Ltd., Albion Exploration Fund LLC and Washington State Investment Board, as buyers(collectively, the “Buyers”)
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Legacy Cash calls:
CAD$385,000 Mar 31st, 2019 (Unsecured Debt Facility #1 - interest payment)
CAD$230,000 Mar 31st, 2019 (Other secured debt - interest plus principal payment)
CAD$800,000 Mar 31st, 2019 (Caterpillar - interest)
