Osisko Gold Royalties Ltd. has signed a deal to acquire Stornoway Diamond Corp. with the help of the mining company’s secured creditors.
Under the terms of the agreement, Osisko and Stornoway secured creditors want to form an entity that will acquire the company and assume the debts and liabilities owing to the secured creditors as well as the obligations relating to the operation of the Renard mine.
Osisko will also keep receiving its 9.6 per cent revenue stream from diamonds at the Renard mine, but has agreed to reinvest its proceeds from the stream for one year from the date of closing of the proposed credit bid transaction.
In connection with the proposal, Stornoway was granted protection under the Companies’ Creditors Arrangement Act by a Quebec court.
Deloitte Restructuring Inc. was appointed as monitor to oversee the CCAA proceedings and report to the court.
Osisko and a group of the secured creditors have agreed to provide $20 million in working capital secured by Stornoway’s assets.
The money will provide the financing and liquidity required to ensure that the Renard mine continues to operate uninterrupted.
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