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Stornoway Diamond’s Biggest Shareholder Sees Funding Soon

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Feb. 25 (Bloomberg) -- Stornoway Diamond Corp.’s biggest shareholder said the company is moving closer to securing financing for the Renard project, which may be the first diamond mine in Quebec, and an announcement will probably be made soon.

“Things are advancing, and I think we’ll be able to demonstrate progress in this file relatively shortly,” Mario Albert, chief executive officer of Investissement Quebec, told reporters today after a speech to the Board of Trade of Metropolitan Montreal.

Investissement Quebec is an investment arm of the provincial government with about C$3.6 billion ($3.25 billion) of assets as of last year. Through its Diaquem unit, it owned 23 percent of Stornoway’s outstanding shares as of November, according to data compiled by Bloomberg.

Asked when a deal might be announced, Albert said “it could be in a week, it depends on the investors. There’s due diligence to be done, so I can’t give you more details.”

Stornoway, based in Longueuil, Quebec, said last year its plan is to mine at the C$752 million Renard project for 11 years beginning in December 2015.

Stornoway is “actively engaged in project financing” for Renard, CEO Matt Manson said today in a telephone interview from southern Florida, where he’s attending a mining conference. “Investissement Quebec is our biggest shareholder and they are very supportive of the company and the project. Discussions are ongoing but I don’t want to comment further, so this is something I’m going to have to leave alone.”

‘Very Clear’

Albert said he discussed financing for Stornoway with investment funds from India and the Middle East in London last month. He declined to identify the potential investors.

“Finding financing for Stornoway has been a challenge,” Albert said.

“What we want is to attract these investors and have them finance our projects,” Albert said, referring to his agency’s mandate to bring foreign investment into Quebec. “Obviously we don’t want to give up control of our natural resources. The government has very clear objectives in this regard.”

Quebec Finance Minister Nicolas Marceau said last week he would propose amendments to the province’s Business Corporations Act that would give public companies based in the province “adequate means of defense” against unsolicited bids. The measures are aimed at keeping head-office jobs that help generate C$5 billion in economic activity, according to his budget released Feb. 20.

To contact the reporter on this story: Frederic Tomesco in Montreal at tomesco@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net