2Q production at Stornoway reaches 223,351 carats
Stornoway Diamond provides production and sales results, all with CAD$ term unless otherwise noted,
at the Renard Diamond Mine for the 2Q 2018 says, 201,283 carats sold in two tender sales for gross proceeds, 1: of $28.6 million, 2: at an average price of US$109 per carat ($142 per carat ). 2Q diamond production was 223,351 carats produced from the processing of 562,060 tonnes of ore at an average grade of 40 carats per hundred tonnes.
Matt Manson, President and CEO of Stornoway commented “Our second quarter production and sales report reflects the ongoing transition from open pit to underground mining and the introduction of ore-waste sorting. By the end of the quarter this transition was essentially complete, albeit with a slower than expected underground ramp-up because of lengthening lead times on mobile mining equipment. We have been particularly encouraged by the performance of the new ore sorting plant.
Initial diamond results are encouraging, and given the volume and quality of the waste that is being rejected we see the potential for processing capacity in our plant beyond its current name-plate rating. Exploiting this potential new capacity will involve the development of a modified mine plan to support the accelerated mining required, and permitting.”
Matt Manson continued: “The end of the second quarter also marks the end of the principal construction capital spending at Renard. The second half of the year is expected to see lower capital spending, higher processing rates and higher grades and carat recoveries. We are also seeing the rough diamond market continue to strengthen on the basis of strong market fundamentals and consumer demand.
On this basis, we are engaged with our lenders on the modification of certain debt instruments to better suit the working capital requirements of the business over the longer term. These discussions are ongoing and progressing well.”
By furnishing diamond sales details Stornoway says, The second quarter sales of 201,283 carats represented run-of-mine production recovered between February and March 2018. Gross proceeds1 were $28.6 million at an average price of US$109 per carat ($142 per carat). On a segmented basis, 147,008 carats of +7 DTC sieve size diamonds were sold at an average price of US$142 per carat ($185 per carat), and 54,275 carats of -7 DTC sieve size diamonds were sold at an average price of US$20 per carat ($26 per carat).
These results exclude sales from the third tender sale of the first quarter, being 127,616 carats sold at an average price of US$123 per carat ($156 per carat), which were recorded as revenues in the second quarter, as deliveries to clients were made at the beginning of the second quarter.
In addition to the sale of run of mine production, an additional 41,979 carats of diamonds smaller than the -7 DTC sieve size were sold in an out of tender contract sale for gross proceeds1 of $1.0 million at an average price of US$18.50 per carat ($25 per carat).
These represent recoveries of small diamond “incidentals” produced between March and May 2018 that are in excess of that expected from the Renard Mineral Resource. The sale of such incidentals represents incremental revenue above that provided for in Stornoway’s FY2018 segmented sales guidance.
