Stornoway Reports C$35.9 million Q2 Net Loss

Stornoway Diamond Corporation (TSX:SWY) has released its financial and operating results for the quarter ended June 30, 2018. During the period the company reported a net loss of C$35.9 million.

Canadian diamond exploration and production company, Stornoway owns a 100 percent interest in the Renard Mine, Québec’s first diamond mine.

As quoted from the press release:

QUARTER ENDED JUNE 30, 2018 HIGHLIGHTS:

• For the three months ended June 30, 2018, Stornoway reported a net loss of C$35.9 million (C$0.04 per share on a basic and fully diluted basis). Adjusted net loss1 for the quarter was C$31.3 million.
• During the quarter, two tender sales totalling 201,283 carats were completed for gross proceeds of C$28.6 million at an average price of US$109 per carat (C$142 per carat). Revenue recognized was C$56.9 million, derived from the sale of 328,899 carats of run of mine production in three tender sales at an average achieved price1 of US$115 per carat (C$147 per carat), and the sale of 41,979 carats of incidental production in one out of tender contract sale at an average price of US$19 per carat (C$25 per carat).
• Diamond processing comprised 223,351 carats recovered from 562,060 tonnes of ore at a grade of 40 carats per hundred tonnes (“cpht”). Grade and carat recoveries reflect the processing of lower grade production ore and ore stockpiles as the Renard mine transitions from open pit to underground mining.
• Underground mining during the quarter comprised 366,550 tonnes, with 296,637 tonnes of ore extracted. Ramp up of the underground mine production during the quarter was impeded by equipment availability and drawpoint management. Subsequent to the quarter end, mining rates at or above the design capacity of 6,000 tonnes per day have been successfully achieved.
• Commissioning of the ore sorting plant, which commenced in March, was completed during the quarter and is now fully operational. Waste rejected represents between 15 percent  and 30 percent of material sorted, with 1-2% kimberlite content in the reject stream.
• Cash operating costs per tonne processed1 were C$58.69 per tonne ($147.69 per carat) and capital expenditures1 were C$19.9 million.
• For the second quarter of FY2018, Stornoway reported adjusted EBITDA1 of C$(6.4) million, or (13.1) percent of Adjusted Revenues1, which includes an C$10.9 million write-down of cash costs to bring inventory to its net realizable value.
• At quarter end, cash and cash equivalents stood at C$31.6 million and Available Liquidity, including available credit facilities, stood at C$46.5 million.

“Our second quarter results reflect the continuing transition to underground mining at Renard, and the accompanying lower carat recoveries and sales during the first half of the year. Ramp-up of the underground mine has been slower than expected, but by the end of July, subsequent to the quarter-end, we had established sufficient drawpoints, equipment availability and manpower levels to achieve mining rates at or above our underground design capacity,” said Matt Manson, president and CEO.

Click here to read the full announcement