Stornoway Diamond Reports Quarterly and 2015 Fiscal Year Results

Stornoway Diamond Corp. (TSX:SWY) announced its results for the three months ended April 30, 2015 as well as for the full 2015 fiscal year.

Financial highlights for the quarter include:

Stornoway ended the quarter with cash, cash equivalents and short-term investments of $363.6 million, compared with $321.6 million at the end of the previous quarter. Stornoway’s current cash resources are sufficient to cover planned mine development expenses, financing and corporate costs during calendar 2015. The second and third payment deposits under the stream agreement of US$80 and US$90 million are expected to be received in September 2015 and March 2016, respectively, following which Stornoway expects to draw on a $100 million senior secured loan in late 2016 to complete mine development at Renard.

Mine development capital expenditures incurred during the quarter were $48.9 million($183.8 million for the year ending April 30, 2015), with total capital expenditures of $293.4 million having been committed against the total project cost estimate of $811 million(including contingencies and capital escalation allowances) as at April 30, 2015.

Net loss for the three and twelve months ended April 30, 2015 totaled $8.5 million and $0.6 million respectively, and include other income (expenses) of $(7.7) million and $8.7 million, respectively. Net losses were impacted by several items not reflective of Stornoway’s underlying operating performance, including changes in the fair value of a derivative and unrealized gains and losses from foreign exchange. Operating expenses for the three and twelve months ended April 30, 2015 totaled $2.4 million and $10.7 million, respectively. Net loss of $0.6 million in the Current Year declined by $11.7 million from loss in the Comparative Year of $12.3 million.

The 2015 Q4 financials again reflect the impact of the recent devaluation of the Canadian dollar. While this can be expected to create volatility in our earnings statements going forward (due to a fair value calculation on a portion of our carried debt) a lower Canadian dollar serves to create a significant foreign exchange gain on our funded and committed cash balance (both actual and unrealized) and increases the future potential operating margins of the project. These are both highly positive factors in the outlook for the Corporation.

Matt Manson, president and CEO of Stornoway, commented:

During the fiscal year just ended, Stornoway successfully completed a C$946 million project financing transaction for the Renard Diamond Project and commenced its construction. The Stornoway team has achieved a good start over the project’s first 10 months, with both cost and schedule tracking within plan. We have benefited from a favourable construction and labour market, and from having all funding, authorizations and the project’s access infrastructure in-hand up-front. Over the previous three quarters we have also seen a strengthening of our balance sheet as the depreciating Canadian dollar serves to create a foreign exchange gain on the US dollar denominated portions of our funded and committed financing sources compared to our original funding plan. As we ramp up construction, we have prioritized employment and contracting amongst the Crees of the Eeyou Istchee, including the Cree Nation of Mistissini, and the communities of Chibougamau and Chapais, and maintained a commendable environmental, health and safety record. These achievements are consistent with our stated commitments, and will remain our focus as we prepare for the transition to mine operations starting in late 2016. Our objective at Renard is an efficient and profitable operation, socially and environmentally responsible, delivering high quality Quebec diamonds for sale starting in a little over 18 months’ time.

Click here to read the full Stornoway Diamond Corp. (TSX:SWY) press release.