Stornoway Diamond Corporation, which officially opened its Renard Diamond Mine on October 19, 2016 and formally declared the commencement of commercial production as of  January  1, 2017 (it had begun the ore processing from July 15, 2016), recently announced its financial and operating results for the 12 months ended December 31, 2016. 

The commencement of commercial production marks the end of the project’s initial capital expense period, the Corporation noted. At the end of 2016, total project cost had reached C$ 771.2 million, or 99% of budget. Part of the costs - C$ 2.8 million - have been deferred to 2017; “giving a final cost to complete estimate of C$ 774 million, C$ 37 million below the initial capital budget established in July 2014”, the Corporation stated.

Stornoway mined 2,074,827 tonnes of open pit ore in FY2016; and processed 399,162 tonnes. These figures marked increases over plan of 136% and 77% respectively. Moreover, 448,887 carats were recovered at an attributable grade of 112 carats per hundred tonnes (cpht), increases of 106% and 15% respectively over plan, the Corporation said.

At the first  sale of Renard Diamonds held in  November in Antwerp, a  total of 38,913 carats were sold, for proceeds of US$7.6 million (C$ 10.2 million) thus realising  an average price of US$ 195 per carat. This represented “un-budgeted pre-production revenue”, the Corporation said.

“For the three months ended December 31, 2016, the Corporation reported a net income of C$ 52.0 million or C$ 0.06 earnings per share basic and C$ 0.05 fully diluted, and for the year ended December 31, 2016, it reported net income of C$ 19.6 million or C$ 0.03 earnings per share basic and fully diluted,” Stornoway declared.

Matt Manson, President and CEO commented: “Stornoway’s FY2016 results confirm the final completion of the Renard Mine well below our original budget estimates and ahead of schedule. With the capital period now over and the attainment of commercial production, we are continuing our processing ramp-up and steadily increasing the volume of goods offered at our diamond sales.”

Noting that subsequent to the year end, two additional tenders have been completed, Manson added, “...while pricing continues to be impacted by Indian market conditions and our diamond recovery profile, we are seeing improvements in the market for the lower quality items and strong premiums in larger, higher quality goods.”

Stornoway plans to hold one additional sale during the current quarter.