On July 8, 2014 Stornoway Diamond Corporation ("Stornoway") announced that it had closed its previously announced financing transactions (the “Financing Transactions”) with U.S. private equity firm Orion Mine Finance ("Orion"), Investissement Québec (through its wholly-owned subsidiaries Diaquem Inc. and Resources Québec) ("RQ"), and the Caisse de dépôt et placement du Québec (the "Caisse") to fund the construction of the Renard Diamond Project, Quebec's first diamond mine. In total C$946million[1] has been funded, or committed for funding, through a combination of senior and subordinated debt facilities, equity issuances, an equipment financing facility with Caterpillar Financial, and the forward sale of diamonds.

The Financing Transactions are intended to provide a comprehensive funding package for the construction of the Renard Diamond Project. Taken together, the Financing Transactions represent the largest ever project financing package for a publicly listed diamond company.

Concurrent with the closing announced on July 8, 2014, approximately C$464million1 in aggregate gross proceeds from public and private offerings of subscription receipts and a private offering of convertible debentures has been released to Stornoway (subject to the payment of certain transaction costs) to allow the immediate commencement of project construction. The proceeds of a senior secured loan, a purchase and sale agreement for the forward sale of diamonds, an equipment financing facility and a cost overrun facility (if and when needed) will be made available to Stornoway in due course in accordance with their terms.

The Financing Transactions included an issuance of approximately C$243 million of common share subscription receipts which were subscribed for by Orion, RQ and the Caisse by way of private placements, and C$132 million of common share subscription receipts which were offered by way of a concurrent public offering in Canada led by Scotiabank, Dundee Capital Markets and RBC Capital Markets. By way of forward sale of diamonds, Stornoway will sell a 20% undivided interest in the diamonds produced from the Renard Diamond Project for a purchase price in an aggregate amount of US$250m, in a proportion of 16% to Orion (for US$200m) and 4% to Caisse (for US$50 million).

The Financing Transactions also include a C$100 million Tranche "A" senior secured loan by RQ (plus an amount equal to the full outstanding principal amount of all loans and other obligations under an existing $20 million bridge facility with Diaquem), with an additional C$20 million Tranche "B" senior secured loan by way of an accordion feature as a cost overrun facility. Convertible unsecured debentures were issued in an aggregate principal amount of US$81.257 million by way of private placements (US$20.500 of which was purchased by Orion), and the Caisse committed to provide an additional C$28 million unsecured non-convertible loan as a cost overrun facility.

Norton Rose Fulbright advised Stornoway, with a team led by Steve Malas (Corporate, Securities and Mining), Amar Leclair-Ghosh (M&A and Mining) and Serge Levy (Banking and Finance – Project Financing), and including Elliot Shapiro (Corporate and Securities), Derek Chiasson (Tax), Ed Heakes (Tax), Miguel Manzano (Real Estate; Mining), Peter Wiazowski (Banking and Finance – Equipment Financing), Bernard Quinn (EPCM/Construction), Martin Thériault (Banking and Finance – July 8 Project Financing), Solomon Sananes (Corporate and Securities), Robert Mason (Mining), Michele Friel (Banking and Finance – Project Financing), Amelie Metivier (Corporate and Securities), Nicholas Cerminaro (Corporate and Securities), Antoine Desroches (Tax), David Crandall (Corporate and Securities), Peter Riddell (Corporate and Securities), Matthew Bernardo (Banking and Finance – Equipment Financing), Aditya Rebbapragada (Banking and Finance – Project Financing), Mélanie Dupuis-Giuliani (Banking and Finance – Project Financing), Sandro Muzzo (Banking and Finance – Project Financing), Marly Ochmann St-Jean (Corporate and Securities), Marilyne Rougeau (Corporate and Securities), Laurence Farmer (Corporate and Securities), Renée Loiselle (Corporate and Securities), Chris Hilbert (US law matters) and Manny Rivera (US law matters).