Stornoway experiences slowdown in second quarter

by carly_midgley | August 24, 2018 9:52 am

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As Stornoway Diamonds[2] makes the move to underground mining at its Québec-based Renard[3] operation, its carat recoveries and sales have softened accordingly. The company recovered 222,351 carats from 562,060 tonnes of ore in the second quarter of the year, compared to the 285,851 carats it recovered from 562,520 tonnes of ore in the first quarter.

Gross proceeds from two tender sales completed during the quarter totalled $28.6 million for 201,283 carats (an average price of $142 per carat). This is a decrease from the first-quarter results of $56.6 million generated across three tenders by selling 399,135 carats for the same average price.

However, quarterly revenue increased over the $42.6 million achieved during the same period in 2017. This year, it rose to $56.9 million from three tender sales (at which 328,899 carats of run-of-mine production were sold at an average price of $147 per carat) and one out-of-tender contract sale (which featured 41,979 carats of incidental production sold at an average of $25 per carat). Commissioning of the mine’s ore-sorting plant was also completed during the second quarter.

“Sales revenue during this period has been less than initially forecast, resulting in lower financial liquidity and cash flow than expected,” said Matt Manson, CEO of Stornoway Diamonds.

To resolve this, Manson says Stornoway is working with lenders and stakeholders to adapt its financing agreements and increase cash flow flexibility. Overall, however, he indicates the mine’s performance is as expected and should improve as 2018 continues.

“Our new ore-sorting plant is performing well, costs are in line with plan, and we expect better carat recoveries and larger sales in the second half of the year,” he said.

Source URL: https://www.jewellerybusiness.com/news/stornoway-experiences-slowdown-in-second-quarter/

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