Stornoway tracks ahead of plan – maiden quarterly report

10th May 2017 By: Henry Lazenby - Creamer Media Deputy Editor: North America

Stornoway tracks ahead of plan – maiden quarterly report

Photo by: Stornoway Diamond Corp

VANCOUVER ( – Quebec’s sole diamond producer Stornoway Diamonds has issued its maiden first-quarter operating and financial results report, showing that mining rates, development progress in the underground mine, and carat production all continue to exceed plan.

The Longueuil, Quebec-based company, which declared commercial production at the flagship Renard diamond mine on January 1, recovered 385 151 ct of diamonds during the quarter from the processing of 419 233 t of ore, for an attributable grade of 92 carats per hundred tonnes (cpht), compared with a plan of 369 307 cts at 91 cpht.

Diamond sales of 459 126 ct were completed for proceeds of C$48.5-million. Adjusted earnings before interest, taxes, depreciation and amortisation were C$15-million, or 35.9% of sales, during the period.

Since the project started producing, diamond sales now stand at 498 039 ct at an average price of $83/ct, reflecting higher-than-expected efficiencies in the recovery of small diamonds and higher-than-expected diamond breakage experienced during processing ramp-up.

President and CEO Matt Manson commented that the achieved pricing in its first tender sales reflect the higher-than-normal levels of diamond breakage that the mill experienced during the first months of processing ramp up.

“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,” Manson stated.

Cash operating costs per tonne processed were C$57.86/t, or C$62.99/ct, and capital expenditures totalled C$17.1-million, both well within plan, the company said.

During the quarter, mining in the Renard 2-3 and Renard 65 openpits comprised 1.25-million tonnes, or 112% of plan, with 625 576 t of ore extracted. Underground mine development comprised 1 459 m, or 113% of plan.

For the period, Stornoway reported a net loss of C$3-million or nil per share on a basic basis and a loss of C$0.01 a share on a fully diluted basis.

As at the end of March, cash, cash equivalents and short-term investments stood at C$72.1-million. Available liquidity to the corporation, comprising cash and cash equivalents and available credit facilities, net of payables and receivables, stood at C$153-million.

For 2017, Stornoway expects to produce 1.7-million carats and sell 1.8-million carats over ten tenders, at an average diamond price of between $100/ct and $132/ct.