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Diamond Market Dip Hits Stornoway
Nov 5, 2017 7:50 AM
By Rapaport News
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RAPAPORT... Stornoway Diamond Corporation recorded revenue of $39.2
million (CAD 50 million) in the third quarter as a decline in the rough-diamond
market impacted prices.
Prices at rough tenders dropped by 6% to 8% during August
and September, “which influenced the results of our final sales in the
quarter,” chief financial officer Orin Baranowsky said in a conference call Friday
transcribed by Seeking Alpha.
The company sold 405,643 carats for an average price of
$95 per carat during the period, which represented an improvement from the
previous quarter but was still below the $100 to $132 per carat it had
initially projected for its Renard mine in Quebec, Canada.
Stornoway launched production at Renard in October 2016
and held its first sale a month later, meaning that no comparative data was
available for its third-quarter earnings results.
One factor affecting the company’s sale prices was a high
rate of diamond breakages at the mine’s processing plant, which impacted the size
distribution, quality and grade of the rough recovered to date, the company
explained.
CEO Matt Manson said prices were likely to remain flat
for the rest of this year, given the slow market conditions. However, the company
expects an improvement in the coming year, as it has located the source of the
breakages in the processing plant and has approved a $17.2 million (CAD 22
million) investment to enhance the plant’s performance.
Development of an underground mine at Renard is also under way,
accounting for most of the company’s $17.8 million (CAD 22.7
million) in capital expenditures for the quarter. Full underground production is expected in
the second quarter of 2018.
Output from the existing open-pit mine amounted to
442,154 carats during the quarter, 5% higher than planned.
Stornoway also reported a net loss of $2.4 million (CAD
3.1 million) for the period, an improvement from its loss of $12.2 million (CAD
15.5 million) the previous year. In the first nine months of 2017, sales
reached $110.5 million (CAD 141 million), with a net loss of $2.9 million (CAD
3.7 million).
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Tags:
Canada, mining, Rapaport News, renard, stornoway, Stornoway Diamond Corporation
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