Stornoway Diamond Corporation and Societe generale de financement du Quebec ("SGF") have launched a feasibility study at the Renard Diamond Project in North-Central Quebec, Stornoway announced.

The study underway builds on a preliminary assessment of the Renard project, whose results were released in March 2010 and indicated that the stock at Renard had a net value of C$885 million before taxes. These findings also indicated that a mine built at the Renard Project site could supply 5,000 tons of diamonds a day over the course of 25 years, and put the Indicated and Inferred Mineral Resources at 23 million carats and 13.3 million carats.

Stornoway President and CEO Matt Manson called the Renard feasibility study a "significant milestone" en route on the way to establishing the first diamond mine in Quebec, stressing that the company sought a "robust, low-risk project with high margins and a substantial mine life."

Manson noted that the feasibility program would also provide for an expanded mining team based in Quebec that would be directed by Patrick Godin, newly appointed Chief Operation Officer at Stornoway.

The Renard Diamond Project is a 50:50 joint venture between Stornoway Diamond Corporation and SGF subsidiary SOQUEM. SGF President and General Manager Pierre Shedleur said that the Renard feasibility study and an accompanying environmental assessment on a proposed power line to the area demonstrated the conviction at SGF that the Renard Project had economic potential, and like Manson expressed hope that Renard could become the first diamond mine in the province.

The two-year Renard feasibility study is expected to cost a total $28.3 million, some 13% of which has been spent since January 2010. The feasibility program schedule, described by Stornoway as "aggressive," is intended to lay the groundwork to start construction on a diamond mine in 2012 that would be producing by the end of 2013.

Under the feasibility study, the Renard mine plan would combine an open pit and underground diamond mining and would use low-cost methods. Besides the design of the diamond mine itself, other aspects of the study include designs for the processing plant; process security; metallurgical testing; studies on site infrastructure; management of kimberlite and waste rock post-processing; and both geotechnical and hydro-geological studies.

Independent of the feasibility study on the Renard Project itself, Stornoway and SOQUEM plan to fund an environment assessment for a proposed power line to the Renard site. Hydro-Quebec will be responsible for executing the study. A power line would reduce operating costs of any mine constructed at Renard and extend mine life, as well as mitigating the environmental impact of an operating diamond mine.

Also due to begin soon is an Environmental and Social Impact Assessment (ESIA) that will examine the possible effects of a working diamond mine on the area's wildlife, hydrology, ecology, and archeology.