Stornoway Diamond Corporation (TSX:SWY) is pleased to announce that it has arranged a non-brokered sale of $20,000,000 in unsecured convertible debentures to Agnico-Eagle Mines Limited ($10 million) and Lorito Holdings Limited ($10 million), a Lundin Family Trust. The debentures mature two years after their date of issue and interest is payable under the debentures quarterly at 12% per annum. Stornoway will issue two series of debentures, $10 million in Series A Debentures that provide Stornoway may repay principal on the maturity date in cash or common shares of Stornoway ("Shares") at Stornoway's election and $10 million in Series B Debentures that provide Stornoway must repay principal on the maturity date in cash or Shares at the holder's election. If principal is paid in Shares, the Shares will be issued at a deemed price of the lower of $1.25 and 95% of the five day volume weighted average price of the shares ending three trading days before the payment date. Stornoway will have no right of prepayment.
Interest payments may be paid in cash or in Shares, at Stornoway's election. If interest is paid in Shares, the Shares will be issued at a deemed price of 95% of the five day volume weighted average price of the shares ending three trading days before the payment date.
The proceeds of the debenture financing, together with funds Stornoway has on hand, will be used to repay all amounts owing under the bridge loan that was used to finance the acquisition by Stornoway of Ashton Mining of Canada Inc.
In addition, Stornoway is pleased to announce that Matt Manson has been appointed to its Board of Directors and as President of Stornoway. Mr. Manson is currently President and CEO of Contact Diamond Corporation and Ashton Mining of Canada Inc., two wholly-owned subsidiaries of Stornoway . Between 1999 and 2005 he was employed by Aber Diamond Corporation as Vice President Marketing and subsequently Vice President Technical Services & Control. Mr. Manson has over 13 years of experience in diamond exploration, development and production.
Stornoway Diamond Corporation
Stornoway Diamond Corporation is one of Canada's leading diamond exploration and development companies. The Company and its affiliates have been responsible for discovering over 150 kimberlites and six new Canadian diamond districts. Stornoway's management and technical team has a proven track record in wealth creation for shareholders and direct operating experience in each segment of the diamond "pipeline" from exploration to marketing.
On behalf of the Board
STORNOWAY DIAMOND CORPORATION
/s/ "Eira Thomas"
Eira Thomas
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