The current crisis being faced by the diamond industry, with high midstream inventory impacting demand and prices of rough, have taken its toll in a somewhat unexpected manner on two Canada-based junior mining companies, which now face delisting from stock exchanges.

Stornoway Diamonds and Mountain Province Diamonds have recently reported that they received notices from the exchanges on which they are traded warning about possible delisting for their failure to meet certain minimum requirements.

Stornoway Diamonds said in a statement last week that it had received a notification from the Toronto Stock Exchange (TSX) that the latter would be reviewing the eligibility of the Corporation’s securities for continued listing on the TSX. The notification gives the Company a period of 120 days to ensure compliance with all TSX requirements set out in part VII of the Manual on or before December 20, 2019, failing which its shares will be delisted.

It may be recalled that the Corporation had already availed of a bridge loan financing facility earlier this year while it was looking for a buyer / investor. The original deadline of July 15 to complete the process and repay the loan had already been extended till September 15. However, while announcing its quarterly results recently, Stornoway had reported continued losses and said that the chances of meeting the deadline for a buyer / investor seemed remote.

This announcement came about ten days after Mountain Province Diamonds announced the receipt of a notification from Nasdaq stating that it was no longer in compliance with the minimum bid price requirement set forth in Nasdaq Rules for continued listing. According to the announcement, if a company’s minimum bid price falls below US$ 1.00 per share for 30 consecutive business days, it was liable for delisting.

While Stornoway’s notice period to ensure it meets all legal requirements ends on December 20, 2019, Mountain Province has been given till February 10, 2020 to ensure it meets with Nasdaq requirements.

Both companies said that the notices would not affect business operations directly. Stornoway owns and operates the Renard mine, which is the first diamond mine in Quebec, while Mountain Province has a 49% stake in the Gahcho Kué mine in NWT with De Beers holding the rest, and also completely owns the Kennady North project.

Pic caption: The Renard mine in Quebec owned by Stornoway

Pic courtesy: Stornoway