VANCOUVER (miningweekly.com) – Quebec’s only diamond producer Stornoway Diamond Corp has produced its one-millionth carat from the Renard mine, alluding to a strong start to production in the current quarter.
Desjardins Capital Markets analyst Michael Parkin said the market is still focused on the company’s ability to resolve the challenges at the mill related to diamond breakages being above plan.
According to him, once at a steady state, the Renard mill is expected to have breakage on only about 10% of the stones, which is a normal level in the industry.
In a note to clients Tuesday, the analyst point to a positive emerging trend regarding the diamonds sold in the second sale of 2017, which showed a breakage level of 35%. The third sale showed that stones with breakage were lower than 30%, and by the fourth sale, this was tracking around 27%.
“Resolving these issues is never a simple step-change; rather, it involves an iterative process, with many tweaks made to the process circuit. We remain confident that management should be able to show further significant improvement on the level of breakage. We are also seeing a recovery in the rough diamond price index, which should help support the stock price,” Parkin stated.
Construction at Renard started on July 10, 2014, while processing of ore commenced on July 15, 2016 – two months ahead of schedule. Stornoway declared commercial production on January 1 this year.
“The one-million carat threshold comes, coincidentally, at the same time that the first polished diamonds from the mine have become available for sale in Montreal,” president and CEO Matt Manson commented.