Stornoway reports wavering Q1 output, but strong sales as 37 ct gem boosts prices

VANCOUVER (miningweekly.com) – Quebec’s sole diamond mine owner and operator Stornoway Diamond Corp has reported higher prices during the first quarter ended March 31 for its diamonds produced from the Renard mine, which is increasingly showing a tendency to produce large diamonds.

A stronger diamond market in general and the sale of the most valuable diamond the Renard mine has produced to date, conspired to lift the average price per carat for the period to $112 from $85/ct in 2017.

Stornoway reported revenues of C$56.4-million from the sale of 399 135 ct of rough diamonds. Sales included a 37-carat, type IIa, D-colour, internally flawless rough stone that raked in $1.3-million, or $36 000 per carat.

“The first quarter saw a strong performance for Stornoway in sales and pricing, with successively higher prices at each of our three sales, reflecting an improved size and quality mix and a strong start to the year for the diamond market,” CEO Matt Manson said in a statement earlier this week.

The company cautioned, however, that it has not yet reached its average value per carat guidance for 2018 of $125/ct to $165/ct.

Stornoway reported total output of 285 851 ct during the first quarter, which was lower than expected because of processing lower-grade ore while going through its transition from mining the Renard 2-Renard 3 openpit, to underground mining, which will be completed during the current quarter.

Following the first quarter, Stornoway advised that it had recovered a 189 ct stone – its largest to date – and one of the largest ever found in Canada.The company advised that the diamond is not of the best quality, but nevertheless is significant for its size.

The largest gem quality diamond reported recovered in Canada to date was the 187.7 Foxfire diamond, recovered at the Diavik diamond mine, in 2015. In 2017, fragments of a Renard stone believed to have originally exceeded 200 ct in size were recovered, with the largest individual fragment weighing 77 ct.

For 2017, Stornoway reported a 2017 net loss of C$114.6-million, after booking an impairment charge on the Renard mine of C$171-million owing to producing lower-than-expected quality stones.

Stornoway’s TSX-listed equity showed a positive trend this week on the back of the good results, however, it is still down 13.64% since the start of the year. On Friday, the stock traded at C$0.57 a share.