Stornoway Diamond Corporation released its annual figures for the year ended December 31, 2018 yesterday, stating that its net loss had widened to C$ 329.4 million (2017: C$ 114.2 million) under the impact of what it described as a “lower diamond price environment than was originally forecasted by the Corporation”.

The Corporation said that in the 2018 results it had included (i) a non‐cash impairment charge of C$ 83.2 million, (ii) a deferred income tax expense of C$ 77.4 million and (iii) costs of goods sold of C$ 227.1 million, C$ 58.1 million of which is a write-down on inventory to bring it to its net realizable value.

Run-of-mine diamond sales of 253,929 carats were completed in the fourth quarter with gross proceeds of C$ 31 million at an average price of US$ 92 per carat (C$122 per carat). For the full year, Stornoway sold 1,038,967 run-of-mine carats for gross proceeds of C$ 141 million at an average price of US$ 105 per carat (C$136 per carat). The company sold an additional 164,322 carats of supplemental diamonds for gross proceeds of C$ 3.5 million at an average price of US$ 16 per carat (C$ 21 per carat).

The Company also reported that mining in the Renard 65 open pit in the fourth quarter comprised 581,763 tonnes, with 102,333 tonnes of ore extracted. For the full year, mining in the Renard 2-3 and Renard 65 open pits stood at 2,265,895 tonnes, with 623,065 tonnes of ore extracted.

A total of 485,616 carats were recovered in the fourth quarter from the processing of 605,960 tonnes of ore at a grade of 80 carats per hundred tonnes (“cpht”). For the full year, a total of 1,324,123 carats were recovered from 2,328,300 tonnes of ore at 57 cpht.

The Corporation reported adjusted EBITDA of C$ 2.9 million in the fourth quarter, or 8.9% of revenues, and C$ (7.9) million, or (5.4)% of revenues, for the full year ended December 31, 2018.

At year end, cash and cash equivalents stood at C$ 35.8 million.

Patrick Godin, President and CEO, commented: “2018, the second year of commercial production for Stornoway’s Renard Diamond Mine, was one of transition from open pit mining to primarily underground production. This transition proved to be challenging, but our team overcame the difficulties we faced, safely and successfully completing the ramp up of the underground mine in August.”

Godin added that the low diamond pricing environment in which Renard began operating persisted in 2018, and that this, along with the delays and initially lower than expected grades mined underground, prompted discussions with key stakeholders that led to the financing agreements announced in the fourth quarter.

“These transactions illustrate the strong support Stornoway has from its stakeholders, and is a strong testament to the quality of the Renard asset and our team. As the lowest cost diamond mine in Canada, Stornoway possesses unique leverage to take full advantage of an upswing in rough diamond prices. In 2019, we will be focused on efficiency, striving to maximize value generation in every aspect of our business. We will continue exploration and resource development on the Renard property, aiming to extend mine life and grasp strategic opportunities,” he concluded.