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Renard underground move weighs on Stornoway results

Quebec’s only diamond miner Stornoway Diamond Corp (TSX:SWY) has reported a wider year-on-year loss in 2018 because of lower production and sales from its flagship Renard mine.
Renard underground move weighs on Stornoway results Renard underground move weighs on Stornoway results Renard underground move weighs on Stornoway results Renard underground move weighs on Stornoway results Renard underground move weighs on Stornoway results

Stornoway reports the transition to underground mining at Renard proved challenging

Staff Reporter

The company reported a headline net loss of US$100 million (C$133.8 million) compared with the 2017 adjusted loss of C$4.9 million.

The net loss for the year was $329.4 million or 39c per share, compared to a net loss in 2017 of $114.2 million or 14c per share.

Stornoway booked a non-cash impairment of $83.2 million on the carrying value of the Renard property, plant and equipment because of persistently low rough prices, a deferred income tax expense of $77.4 million and $227.1 million for the cost of goods sold.

CEO Patrick Godin said the transition from openpit to underground mining proved challenging, but the team overcame the issues with a full project ramp-up by August.

"The low diamond pricing environment in which Renard began operating persisted in 2018. 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," he said.

Stornoway reported lower tonnage through the plant, recovered carats and carats sold in 2018 of 2.3Mt (compared to 2Mt in 2017), 1.3Mct (compared to 1.6Mct in 2017) and 1.2Mct (1.7Mct in2017), respectively.

Cash cost for the year also came in markedly higher at $57.10 or $100.40/ct. In 2017 the cost per tonne was $42.10 and $54.90/ct recovered.

Excluding reserves, the Renard mine ended 2018 with an indicated resource of 3.7Mct in 8.7Mt grading 42.3 carats per hundred tonnes. It also has 13Mct held in 23.4Mt at 55.8cpht inferred, with significant exploration upside.