Stornoway Prices Continue to Fall

RAPAPORT… Rough prices slumped for Stornoway Diamond Corporation in
the second quarter, as market weakness dented demand for the miner’s range of
goods.



The average price of the company’s sales slid 18% to $76 per
carat in the three months ending June 30, compared with $93 per carat a year
ago, it said in a statement Wednesday. Sales value grew 57% to CAD 47 million ($36
million), driven by an 89% jump in volume to 460,832 carats.


“The rough-diamond market continues to be challenging, with
further decreases in pricing observed during the second-quarter sales,” said
Stornoway CEO Patrick Godin.


The average price was 9% lower than for the first quarter,
the miner reported. Prices of higher-quality and special stones declined during
the period due to an oversupply of rough, as well as high inventories in the
midstream, it explained. Smaller and lower-quality goods remained at the low price
levels Stornoway had observed since the fourth quarter of 2018, it added.


Production at its Renard mine in Canada amounted to 463,136
carats for the quarter, compared with the 223,351 carats it reported a year ago.


Last month, the company called on investors to purchase
Renard after operational difficulties and weakness in the small-diamond market
had led to persistent losses. Panmure Gordon analyst Kieron Hodgson has
forecast a 5% drop in global rough prices this year, predicting that major
mining companies would withdraw goods from their sales in response to the lower
demand.



Image: Rough diamonds. (Stornoway Diamond Corporation)