Fox Mine | No diamond specialists have expressed interest

Shutdown since last fall, the Renard mine did not interest any diamond specialist. These are Australian interests which are positioning themselves to take over 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 offer for the assets of Diamants Stornoway, reveals the most recent report from controller Deloitte, who is overseeing the legal restructuring of this company under the protection of the Companies’ Creditors Arrangement Act (LACC).

This 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 of 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 Caumartin. We are giving ourselves six months to make assessments and determine if we can recover the processing infrastructure [broyeurs, convoyeurs et concentrateur]. »

The Renard mine also has water treatment facilities, a mine 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 processing 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, after those of 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 it¹. Stornoway took shelter from its creditors on October 27, sending 425 employees, or 80% of its workforce, into unemployment. 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.

Located on the territory of Eeyou Istchee, in Northern Quebec, the Renard mine has constantly been grappling with financial problems. 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 and Triple Flag.

Little interest

The Deloitte report reveals that there was no rush at the doors to take over the diamond complex. Of the 68 potential buyers approached by the controller since last fall, only two submitted a non-binding proposal. 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 Caumartin, adding that Winsome had no intention of making a foray into 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 had collapsed in reaction to competition from synthetic stones. In March 2023, the price of jewelry diamonds was close to US$120 per carat. Six months later, it had plunged to around US$81.50. Prices have since recovered. On Wednesday, the price per carat was trading around US$108.

1. Read “The Adventure Draws to an End”