News Bureau

 
May 14, 2019

Stornoway carries net loss in Q1

Stornoway Diamond Corporation reports for the three months ended March 31, 2019; the Corporation reported a net loss of $48.4 million. Adjusted net loss for the first quarter (Q1) was $51.0 million per share basic and fully diluted.

For the first quarter, the Corporation reported adjusted EBITDA of $13.4 million, or 25.2% of revenues, which includes an $8.9 million write-down of cash costs to bring inventory to its net realizable value. For the first quarter of 2018, adjusted EBITDA was $24.7 million, or 44.2% of revenues.

During the quarter, two tender sales totalling 429,506 carats were completed for gross proceeds of $47.3 million at an average price of US$83 per carat ($110 per carat3). Revenue recognized during the quarter was $53.3 million. In terms of total carats sold, gross proceeds and pricing, this represents increases of 38%, 47% and 8% over the fourth quarter of 2018, respectively. First quarter diamond sales represent diamonds recovered during the fourth quarter of 2018.

First quarter diamond production was 444,562 carats produced from the processing of 582,613 tonnes of ore at an average grade of 76 carats per hundred tonnes. Carats recoveries decreased by 8% compared to the fourth quarter of 2018, principally due to mechanical issues at the front end of the process plant related to very cold weather in January and February.

In March, the process plant surpassed its budgeted daily rate with an average of 7,209 tonnes processed per day. In the month of April with an average of 7,734 tonnes per day were processed. Q1 2019 cash operating costs per tonne processed1 were $57.14 per tonne ($74.88 per carat) and capital expenditures1 were $17.0 million.

Patrick Godin, President and CEO, commented: “The first quarter saw significant improvements in sales, attributable to the increases in grade recovered during the fourth quarter of 2018. Average pricing also showed a slight increase, due to higher quality of goods and the mix sold. The market, however, did not show notable improvements from the fourth quarter.

In terms of processing, January and February were challenging months due to very cold weather, but March saw outperformance over the budgeted average daily processing rate, and we are pleased to report that the month of April saw an average of 7,734 tonnes per day processed, the highest single monthly performance ever achieved at Renard.

Underground development of the next mining horizon in Renard 2 is progressing according to plan, and the initiation of underground production in Renard 3 took place in late April, over two months in advance of target.”