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Breakage Continues to Affect Renard Output
Jul 16, 2017 6:06 AM
By Rapaport News
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RAPAPORT... Stornoway Diamond Corporation reported an increase in prices of rough diamonds from its flagship Renard mine in Canada in the second quarter, but raised concerns over diamond breakage.
The company sold 350,159 carats in two tender sales during the quarter, raising $30.4 million (CAD 40.9 million) at an average price of $87 per carat compared to $81 per carat achieved in the first quarter.
“This is despite the ongoing issue of diamond breakage, which is impacting our production’s quality and size profile,” said CEO Matt Manson.
Diamond breakage has a significant impact on the average price as it reduces the proportion of larger diamonds available for sale, and causes volatility in the proportion of small diamonds in the sales mix.
Small diamonds continue to achieve substantially lower pricing than before India experienced a liquidity crunch in late 2016. Nevertheless, the average price for Renard diamonds, after accounting for size distribution and quality variations, has increased by 19% in real terms since the first sale was completed in November 2016, the company reported.
However, production at the mine was below expectations due primarily to the processing of lower-grade ore. The company mined 417,362 carats during the quarter, versus 486,591 carats previously planned.
Now in commercial production, the Renard mine is expected to produce an average of 1.6 million carats per year over an initial 14-year mine life, representing some 2% of global supply.
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Tags:
diamond breakage, Matt Manson, Rapaport News, renard, stornoway, Stornoway Diamond Corporation
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