Stornoway reports better-than-expected 2016 output, confirms 2017 guidance

VANCOUVER (miningweekly.com) – Gem miner Stornoway Diamond Corporation has reported significantly better-than-expected production results for 2016 on the back of completing construction of the Renard mine ahead of schedule and below budget.

The Longueuil, Quebec-based company on Monday reported that the 448 887 ct of diamonds produced since operations started last year was more than double that expected in the 2016 mine plan, boosted in part by a 15% higher-than-planned grade of 112 ct/t. The resource reflected better-than-expected geology at the top of the Renard 2 and Renard 3 orebodies.

“Our ability to bring the project into production early resulted in significantly higher carat production than planned for the year, and an earlier-than-expected first sale that gave us unbudgeted preproduction revenue,” president and CEO Matt Manson stated.

The Renard operation, which declared commercial production on January 1, also mined 2.07-million tonnes of openpit ore and processed 399 162 t, increases of 136% and 77%, respectively, over plan. The mine is expected to reach full nameplate capacity of 6 000 t/d, based on 73% plant utilisation, by the end of the second quarter.

Stornoway sold 38 913 ct during its first two diamond sales for gross proceeds of C$7.6-million, representing unbudgeted preproduction revenue.

For 2017, Stornoway expects to produce 1.7-million carats and sell 1.8-million carats over ten tenders, at an average diamond price of between $100/ct and $132/ct.

The company’s price forecasting reflects higher-than-expected levels of diamond breakage in the process plant, which is influencing its initial diamond recovery profile. Manson advised that the source of this breakage is known and that a mitigation plan is under way to reduce it to acceptable levels.

Operating costs are expected to total C$59.68/t ore processed (C$66.49/ct sold) and sustaining and deferred capital cost of C$78.7-million.

The company had total financial liquidity of C$159-million as at December 31.