VANCOUVER (miningweekly.com) – Quebec-focused diamond miner Stornoway Diamond Corp has reported a net loss of $15.5-million, or $0.02 a share, for the three months ended September 30.
Excluding one-time and noncash items, it would see adjusted earnings per share of about nil per share.
The company reported cash and short-term investments of C$150.9-million, reaffirming its solid cash position was enough to see Renard’s completion to commercial production by year-end. This does not include revenue from diamond sales or the C$48-million undrawn credit facility.
At completion of construction and commissioning, Stornoway currently forecasts excess funding in connection with its Renard project of about $149-million comprising cash, undrawn debt facilities, receivables and expected mine tax credits.
Stornoway also pinned the final project cost at C$775-million. Capital spending in the quarter totalled C$47.5-million, bringing the total spent to date to C$729.5-million and reflecting remaining spending of about C$45.5-million.
According to the company, construction is now effectively complete. Mining in the openpits reached 11.6-million tonnes, or 104%, of plan. The company reported underground development of 2 630 m, or 97% of plan. The underground ramp development was delayed by water issues earlier in the year, which set the company back compared with the development plan.
Stornoway had previously reported that it would make its first diamond sales on Monday in Antwerp, Belgium. Management has cautioned that its expected sales price was less than initial expectations owing to the greater proportion of smaller-sized stones so far. However, management is pleased with the production rates overall, having processed 91 010 t for production of 111 556 ct in the quarter.
The Renard diamond mine is located about 250 km north of the Cree community of Mistissini and 350 km north of Chibougamau in the James Bay region of north-central Quebec. On July 8, 2014, Stornoway announced the completion of a $946-million project financing transaction to fully fund the project to production.
According to an updated mine plan and mineral reserve estimate, Renard has the potential to become a significant producer of high-value rough diamonds over an initial 14-year mine life.
Probable mineral reserves stand at 22.3-million carats, while total indicated mineral resources, inclusive of the mineral reserve, stand at 30.2-million carats, with a further 13.35-million carats classified as inferred mineral resources, and 33-million carats to 71.1-million carats classified as nonresource exploration upside.
Renard’s average yearly diamond production is forecast at 1.8-million carats a year over the first ten years of mining, at an average valuation of $155/ct, based on March 2016 terms.
Construction at Renard commenced on July 10, 2014, while processing of ore commenced on July 15, 2016.