Stornoway’s Sales for First Fully Operational Quarter Amount to C$ 48.5 Mn

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Stornoway Diamonds Corporation which officially declared commencement of commercial production from its Renard Diamond Mine effective from January 1, 2017, yesterday announced results for First Quarter FY 2017 (quarter ended March 31, 2017).

The Corporation reported that 385,151 carats of diamonds were recovered during the quarter from the processing of 419,233 tonnes of ore, at an attributable grade of 92 cpht, compared to a plan of 369,307 carats at 91 cpht.

In the period, Stornoway sold 459,126 carats of diamond for proceeds of C$ 48.5 million. The Company declared an adjusted EBITDA of C$ 15.0 million, or 35.9% of sales.

“Total diamond sales since the project began now stand at 498,039 carats at an average price of US$ 83 per carat (C$ 110 per carat), reflecting higher than expected efficiencies in the recovery of small diamonds and higher than expected diamond breakage experienced during processing ramp-up,” Stornoway said.

Cash operating costs per tonne processed amounted to C$ 57.86 per tonne (C$62.99 per carat) and capital expenditures stood at C$ 17.1 million, and both were “well within plan”, the Corporation indicated.

“Mining in the Renard 2-3 and Renard 65 open pits comprised 1,245,021 tonnes, or 112% of plan, with 625,576 tonnes of ore extracted,” Stornoway stated. “Underground mine development comprised 1,459 meters, or 113% of plan,” it added.

The Corporation reported a net loss of C$ 3.0 million or C$ Nil per share on a basic basis and a loss of C$ 0.01 per share on a fully diluted basis.

Total liquidity from various sources amounted to C$ 153 million at end of the period.

“This quarter represents the first full operating period for the Renard Mine,” commented Matt Manson, Stornoway’s President and CEO, expressing overall satisfaction at the Corporation’s progress. “Mining rates, development progress in the underground mine, and carat production all continue to exceed plan. Mining costs and capital expenditures are tracking within budget. Achieved pricing in our first tender sales reflects the higher than normal levels of diamond breakage that we have been experiencing during the first months of processing ramp up.”

Referring to pricing and sales he added: “Pricing has also been impacted by a better than expected liberation of small diamonds and the market effects of Indian demonetisation. Nevertheless, we are seeing positive trends in both the quality of our diamond production and in rough market pricing. We are particularly encouraged by the market’s reception for Quebec’s first diamond production. Yields of polished from the rough are reported as high, with good performance during manufacturing. Achieved pricing in the tender sales has been progressively higher compared to our reserve pricing as the market gains an understanding of the production, and tender participation has been strong. This trend has continued into the first sale of the second quarter, which was completed in April. As our production ramp-up continues, our focus remains the quality of our diamond recovery profile and the continued growth of our diamond sales.”

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