VANCOUVER (miningweekly.com) – Stornoway Diamond Corp has reached commercial production at its Renard mine, in Quebec, achieving the milestone well ahead of plan and comfortably within the revised lower C$775-million budget set out in February, the company said Thursday.

Under the terms of Stornoway’s financing agreements, the TSX-listed company will formally declare commercial production on January 1, 2017 – the first day of the month following the achievement of an average processing rate of 60% of plant nameplate capacity over a 30-day period.

This was achieved on December 3 – a near six-month improvement on the initial project’s execution schedule – with an average processing rate of 4 120 t/d over the previous 30-day period, compared with a nameplate capacity of 6 000 t/d.

The company expects to continue the ramp-up of the process plant to full production over the next two quarters.

Stornoway has three diamond sales scheduled for the first quarter of 2017. Observers expect the company to be able to sell down its small-stone inventory during the first half of 2017, as softness in that portion of the market is expected to be temporary and mainly impacted by the sudden decision in India related to currency-note restrictions, which limited buyers’ ability to pay.

In the first decade of operation under the new plan, Renard output would average 1.8-million carats a year, with schedules of 1.9-million carats produced and 1.4-million carats sold to the end of 2017, which showed increases of 24% and 57%, respectively, compared with the previous plan.

Stornoway managed to clip the project’s initial capital cost by C$250-million to C$775-million within a 14-year life-of-mine (LoM).

In 2018, the operation was expected to kick production up a notch, lifting the processing rate by 1 000 t/d to 7 000 t/d, or 2.5-million tonnes a year.

Renard would have LoM operating costs of C$56.20/t, or C$84.37/ct, providing net revenue of C$4.56-billion that would yield a real-terms cash operating margin of C$2.7-billion or 59%, or C$120/ct after allowing for royalties, taxes and the Renard diamond streaming agreement.