Stornoway Loss Deepens Amid Slow Market

RAPAPORT… Stornoway Diamond Corporation fell deeper into the red in
the first quarter, as rough prices softened, it said
Monday.



The miner recorded a net loss of CAD 48.4 million ($36
million) for the three months ending March 31, in comparison to a loss of CAD
11 million ($8.2 million) during the same period last year.


“A continued downward pressure on the market price for rough
diamonds has inhibited the [company’s] ability to generate positive free cash
flow in 2019,” Stornoway said.


The Canada-based miner plans to suspend open-pit operations
at its Renard mine in order to save CAD 18 million to CAD 20 million ($13.4
million to $14.9 million) during the course of the year. It will continue to
mine from two underground ore bodies at Renard.


Revenue dropped 4.7% year on year to CAD 53.3 million ($39.6
million) for January to March. The company sold 429,506 carats at
two tenders during the period, a 37% increase over the same period a year ago. The average price
slid 26% to $83 per carat.


A higher ore grade at Renard lifted production by 56%
year on year to 444,562 carats, Stornoway noted. However,
output dropped 8% compared with the previous quarter as the miner suffered
mechanical issues with its equipment due to the extreme cold in January and
February.

Image: The Renard underground mine. (Stornoway Diamond Corporation)