Stornoway Diamond Corporation announcing production and sales results of the Renard Diamond Mine for the second quarter ended June 30, 2018, said it had sold a total of 201,283 carats in the course of two tender sales for gross proceeds of C$ 28.6 million at an average price of C$ 142 per carat, or US$ 109 per carat.

Apart from the sale of run of mine production, the Corporation also sold an additional 41,979 carats of diamonds smaller than the -7 DTC sieve size “in an out of tender contract sale” for gross proceeds amounting to C$ 1.0 million at an average price of US$ 18.50 per carat (C$25 per carat). This lot included recoveries of small diamond “incidentals” between March and May 2018 and represent the “excess  of that expected from the Renard Mineral Resource”.

“The sale of such incidentals represents incremental revenue above that provided for in Stornoway’s FY2018 segmented sales guidance,” the Corporation stated.

The Renard Mine produced 223,351 carats from the processing of 562,060 tonnes of ore at an average grade of 40 carats per hundred tonnes (cpht) in the relevant period. “Grade and carat recoveries during the quarter reflect the processing of lower grade production ore and ore stockpiles as the Renard Mine transitions from open pit to underground mining,” the Corporation explained.

Open pit mining at Renard 2 was completed in March and at Renard 3 in April. “Ore processed during the quarter was sourced primarily from the underground mine, from low grade stockpiles, and from the Renard 65 open pit,” Stornoway said. “Carat production during the second quarter was consistent with the revised guidance for the Renard Mine issued on May 15, 2018.”

While open pit mining at Renard concluded in April, the ramp-up of the underground mine production “progressed steadily” during the quarter. Stornoway reported that mined underground tonnes averaged 3,864 tonnes per day (tpd) in June.

Matt Manson, President and CEO of Stornoway commented: “Our second quarter production and sales report reflects the ongoing transition from open pit to underground mining and the introduction of ore-waste sorting. By the end of the quarter this transition was essentially complete, albeit with a slower than expected underground ramp-up because of lengthening lead times on mobile mining equipment.”

He added: “We have been particularly encouraged by the performance of the new ore sorting plant. Initial diamond results are encouraging, and given the volume and quality of the waste that is being rejected we see the potential for processing capacity in our plant beyond its current name-plate rating. Exploiting this potential new capacity will involve the development of a modified mine plan to support the accelerated mining required, and permitting.”  

Manson also noted that the end of the second quarter also saw the end of the principal construction capital spending at Renard. “The second half of the year is expected to see lower capital spending, higher processing rates and higher grades and carat recoveries,” he said. 

At quarter end, cash and cash equivalents stood at C$ 31.6 million and Available Liquidity to the Corporation, including available credit facilities, stood at C$ 46.5 million (on a preliminary and unaudited basis). “These amounts exclude C$15.9 million representing restricted deposits related to debt service reserve accounts,” the Corporation clarified.        

Pic Cap: Renard Underground

Pic Courtesy:  Stornoway Diamond Corporation