Stornoway Diamonds Posts Q3 Loss of C$37.6 Million

- November 14th, 2018

Despite the multi-million dollar loss, Stornoway was able to ramp up underground production at its flagship asset, the Renard mine.

Shares of Canadian precious gem explorer Stornoway Diamond (TSX:SWY) fell more than 14 percent after the company released its financial and production results for the third quarter of 2018 on Wednesday (November 14).

Despite ramping up and achieving record production, the company reported a net loss of C$37.6 million.The Q3 loss is a stark contrast to the same time period last year, when the company reported a net income of C$2.3 million.

The Quebec-based diamond miner attributes the results to a C$22.4 million write down (a reduction in market value), which has impacted the diamond sector.

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Despite the multi-million dollar loss, Stornoway was able to ramp up underground production at its flagship asset, the Renard mine.

For Q3 2018, diamond output reached 329,306 carats produced from the processing of 597,761 tonnes of ore, with an average grade of 55 carats per hundred tonnes (cpht).

This increased grade of ore likely contributed to the growth in Stornoway’s production results. Also adding to the enhanced output is the new ore sorting circuit, which became fully operational in Q3 as well.

“Since attaining full design capacity in the underground mine in late August, we have achieved our best two months of the year in terms of diamond production, with 130,000 carats recovered in September at a grade of 64 cpht and then, subsequent to the quarter end, 161,000 carats in October at a grade of 74 cpht,” Matt Manson, president and CEO, said in the announcement.

Stornoway also completed two diamond tenders during the quarter, selling 184,620 carats worth of stones at roughly C$134 per carat, for a grand total of C$29.4 million.

“We continue to see weakness in the diamond market, particularly in smaller and lower quality items, and this has continued through into the fourth quarter,” added Manson. “However, the Renard mine is now meeting or exceeding expectations in terms of tonnes mined, tonnes processed and carat recoveries.”

Manson is confident the company will perform well and meet its outlook for the remainder of the year.

Shares of Stornoway were down 14.29 percent on Wednesday, trading at C$0.21.

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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.

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