Despite ongoing diamond breakage, Stornoway reports higher prices for its gems

VANCOUVER (miningweekly.com) – Quebec-based miner Stornoway Diamond Corp has reported higher prices for rough diamonds produced at its flagship Renard mine, the Francophone province’s first diamond mine.

For the three months ended June 30, Stornoway earned revenues of C$42.6-million, as rising rough diamond prices at Renard boosted the top line, the miner said on Monday.

The company held two tenders during the period, which fetched an average of $87/ct, compared with $81/ct in the previous quarter. Proceeds from the sale of 350 159 ct came to C$40.9-million.

The quarter marked the second quarter in which Stornoway recorded diamond revenues, after Renard reached commercial production on January 1. The average run-of-mine pricing for Renard diamonds, after accounting for size distribution and quality variations, has increased by 19% in real terms since the first sale was completed in November 2016.

While the rough market has strengthened modestly during this period, the size of the increase reflects the growing acceptance of the Renard diamond production by Stornoway’s tender sale clientele.

“We are particularly encouraged by the steady increase in pricing for Renard diamonds as the market familiarises itself with our production,” said CEO Matt Manson.

However, he noted that “pricing continues to be impacted by high levels of diamond breakage, and our work to date on this issue has shown that reducing the proportion of hard, country rock waste in the ore feed will have a meaningful impact on our recoveries.”

Stornoway expects the Renard mine to produce about 1.6-million carats a year over an initial 14-year mine life, representing some 2% of global supply.