Stornoway misses guidance in 'challenging' year

Quebec’s diamond miner, Stornoway, produced 1.32-million carats from the processing of 2.33-million tonnes of ore in the 2018 financial year, missing its guidance of recovering at least 1.35-million carats from the processing of 2.5-million tonnes of ore.

In its fourth-quarter and 2018 production and sales results announcement, the TSX-V-listed company said on Wednesday that lower tonnages were processed in the second half of November and December, owing to technical issues with the front-end of the process plant.

Carat recoveries in 2018 were affected by delays in the ramp-up of the Renard 2 underground mine, the processing of low grade stockpiles to curtail the shortfall in mined tonnes during the transition from openpit to underground operations and the mining of lower-than-expected grades at the margin of the orebody during the initial phase of the ramp-up. By the end of the third quarter, the ramp-up of underground production at Renard 2 was completed.

President and CEO Patrick Godin said that 2018 was a “challenging year” for Stornoway, with the ramp-up of underground production impacted by delays in equipment deliveries, a competitive labour market and the presence of more-than-expected low-grade mineralisation on the northern margin of the Renard 2 orebody.

However, production improved substantially in the second half of the year, with the miner producing 485 616 ct from 605 960 t in the final three months of the year – a 47% quarter-on-quarter improvement. The grade improved by 45% quarter-on-quarter to 80 carats per hundred tonnes.

“Our third and fourth quarter production results have demonstrated significant improvements in grade and carat recoveries as mining progressed towards the high-grade centre of the Renard 2 kimberlite. We expect these results to continue into 2019, as we continue mining Renard 2 from the 290 m level, and bring into production the higher-grade Renard 3 orebody from underground,” he commented.

For 2019, Stornoway expects to produce between 1.80-million and 2.10-million carats from the processing of between 2.40-million and 2.55-million tonnes of ore.

SALES
Meanwhile, the miner sold 1.04-million carats of run-of-mine (RoM) production for gross proceeds of C$141-million, at an average price of $105/ct. A further 165 322 ct of supplemental diamond production were sold for gross proceeds of C$3.5-million, at an average price of $16/ct.

In the fourth quarter, sales amounted to 253 929 ct of RoM production, netting C$31-million at an average price of $92/ct. In addition, 58 313 ct of supplemental smaller diamonds were sold for C$0.83-million for an average price of $14/ct.