Stornoway Diamond Corporation  announcing its  financial and operating results for the quarter ended March 31, 2018 (Q1 FY 2018), reported a net loss of C$ 11.0 million (C$ 0.01 per share on a basic and fully diluted basis), compared to net loss of C$ 1.2 million for the three months ended March 31, 2017 (C$ Nil per share basic and C$ 0.01 fully diluted). Adjusted net loss  for the quarter  stood at C$ 14.0 million as compared to C$ 2.5 million in the corresponding period of 2017.

During the reporting period,  the Corporation completed three tender sales. A total of  399,135 carats were sold for gross proceeds of C$ 56.6 million at an average price of C$ 142 per carat or US$ 112 per carat.

Revenue recognised for this quarter was C$ 55.9 million derived from the sale of 271,518 carats of run of mine production in two tender sales at an average price of C$135 per carat or US$ 106 per carat;  and the sale of 42,663 carats of incidental production in one out-of-tender-contract sale at an average price of C$ 24 per carat or US$ 19 per carat.

Revenue from the third tender sale of the year, of  127,616 carats of run of mine production sold at an average price of C$ 156 per carat or US$ 123 per carat, and will be accounted for in the second quarter reporting.

“During the quarter, a 37 carat Type II-a, D colour, internally flawless stone was recovered and sold in the third tender sale for C$1.7 million (C$45,000 per carat), or US$1.3 million (US$ 36,000 per carat), the highest price achieved for an individual stone from the Renard mine to date,” Stornoway added.

The Corporation  processed 562,520 tonnes of ore at a grade of 51 carats per hundred tonnes (cpht)   recovering 285,851 carats of diamonds. “Grade and carat recoveries 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. “In response, full year production guidance has been reduced to between 1.35 and 1.40 million carats from 1.6 million carats, while full year guidance for carats sold has been reduced to between 1.20 and 1.25 million carats from 1.6 million carats.”

Stornoway reported an adjusted EBITDA of C$ 7.4 million for Q1 2018, or 19% of adjusted revenues, compared to C$ 21.3 million, or 44% of revenues, for the corresponding quarter of 2017.

“At quarter-end, cash, cash equivalents and short-term investments stood at C$ 51.6 million and available liquidity  to the Corporation, including available credit facilities, stood at C$ 71.9 million,” Stornoway stated.

 Matt Manson, President and CEO, commented: “Our first quarter results reflect the transitional nature of our business, as we move from open pit to underground mining. During this transition, carat production is being negatively impacted by the processing of the lower grade ore currently available to us in our stockpiles and in the first underground stopes. This has prompted us to reduce our full year production and sales guidance. At the same time, however, we have been encouraged by strong pricing in the diamond market, with first quarter prices trending well ahead of those achieved in 2017, and our operating and capital expenditures are within plan. We are also encouraged by the progress of our underground mining and the initial results from our ore-waste sorting, which is giving some very early indications of improved diamond recoveries and exceeding our expectations in terms of the volume and quality of the material sorted.”

Manson added that by the end of the second quarter the Renard Mine will have fully transitioned to underground mining supported by ore sorting, and major capital expenditures will have conclsuded.