Stornoway Diamond Corporation announcing production and sales results of  the Renard Diamond Mine for the quarter ended September 30, 2018 (third quarter) said that it had sold 184,620 carats in two tender sales for gross proceeds  of C$ 24.7 million; realising an average price of C$ 134 per carat or US$ 103 per carat. Third quarter diamond sales represent diamonds recovered during the second quarter, the Corporation clarified.

“In addition to the sale of run of mine production (184,620 carats), an additional 21,367 carats of diamonds smaller than the -7 DTC sieve size were sold in an out-of-tender contract sale for gross proceeds of C$ 362,1502 at an average price of US$ 13 per carat (C$17 per carat),” Stornoway added. “These represent recoveries of small diamonds produced between June and July 2018 that are in excess of that expected from the Renard Mineral Resource.”

Production for the third quarter totalled 329,306 carats from the processing of 597,761 tonnes of ore at an average grade of 55 cpht. “Grade and carat recoveries improved by 39% and 47% respectively compared to the second quarter with the mining of higher grade ore,” Stornoway said.

The Corporation also announced that ramp-up of the underground mine to its design capacity of 6,000 tonnes per day was successfully achieved at the end of August.           

Matt Manson, President and CEO of Stornoway, commented: “The third quarter saw the underground mine at Renard attain its full design capacity after a challenging ramp-up period. In addition to higher mining rates, we are also seeing significant improvement in carat recoveries and grade as we open up mining panels in the main body of the Renard 2 kimberlite. Our carat recoveries have improved each month during the quarter and we expect this trend to continue into the fourth quarter.”

He added: “The new ore sorting circuit, operating since May, is performing well and yielding both lower levels of diamond breakage and higher levels of diamond liberation. Both bode well for future value recovery.”   

Commenting on the prices, Manson noted: “During the third quarter, we saw price weakness return to smaller and lower quality diamonds after more than a year of steady price gains. Underlying polished diamond demand remains strong in the US market, but is being impacted by currency weakness in the emerging markets amidst global trade concerns. This has put pressure on certain segments of the rough diamond trade. However, attendance at our Antwerp tenders remains strong, and we continue to achieve significantly higher pricing than during 2017 based on market strength in our larger and higher quality items.”

Importantly, the Corporation pointed out that the achieved average price of US$ 103 per carat for run of mine goods during the quarter represents a decrease of 7% compared to the second quarter. “This reflects a market price correction since July in smaller and lower quality items attributed to challenging trading conditions in India,” the Corporation noted. “Prices in the larger and higher quality items have remained firm during this period. Weaker pricing in the cheaper items is expected to continue through the remainder of 2018. Overall, Renard diamonds, on a like versus like basis, have improved in pricing by 18% to the end of September 2018 since the first sale in November 2016.”