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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.
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Tags:
Canadian miner, Rapaport News, renard, Renard mine, stornoway, Stornoway Diamond Corporation
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