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Renard Price Drop Leads to Stornoway Loss

Mar 28, 2018 5:15 AM   By Rapaport News
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RAPAPORT... Stornoway Diamond Corporation recorded a loss in 2017, as lower-than-expected rough prices forced it to devalue its Renard mine.

The miner reported a net loss of $88.8 million (CAD 114.6 million), versus a profit of $15.2 million (CAD 19.6 million) in 2016, it said Monday. The loss was primarily driven by a $132.6 million (CAD 171 million) “impairment charge” due to the Renard devaluation.

The weak rough-diamond market had a negative effect on prices, Stornoway said in January. In addition, the mine produced lower-quality stones than the company had expected. Also, stones were breaking up during processing, reducing their value. The miner only managed to correct the breakage problem later in the year.

Stornoway achieved an average selling price of $85 per carat in 2017, well below its initial prediction of $100 to $132 per carat. Prices have shown some improvement this year, with the January tender fetching $104 per carat due to an increase in the quality of diamonds available. The miner expects an average price of $125 to $165 per carat for 2018.
Tags: Canadian miner, Rapaport News, renard, Renard mine, stornoway, Stornoway Diamond Corporation
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