Stornoway Reports Third Quarter 2018 Production and Sales Results

by pmnationtalk on October 11, 201825 Views

LONGUEUIL, Quebec, Oct. 11, 2018 — Stornoway Diamond Corporation (TSX-SWY; the “Corporation” or “Stornoway”) is pleased to provide production and sales results at the Renard Diamond Mine for the quarter ended September 30, 2018. Highlights are as follows:

  • 184,620 carats sold in two tender sales for gross proceeds1 of $24.7 million2 at an average price of US$103 per carat ($134 per carat2). Third quarter diamond sales represent diamonds recovered during the second quarter.
  • Third quarter diamond production was 329,306 carats produced from the processing of 597,761 tonnes of ore at an average grade of 55 cpht. Grade and carat recoveries improved by 39% and 47% respectively compared to the second quarter with the mining of higher grade ore.
  • Ramp-up of the underground mine to its design capacity of 6,000 tonnes per day was successfully achieved at the end of August.

Matt Manson, President and CEO of Stornoway, commented: “The third quarter saw the underground mine at Renard attain its full design capacity after a challenging ramp-up period. In addition to higher mining rates, we are also seeing significant improvement in carat recoveries and grade as we open up mining panels in the main body of the Renard 2 kimberlite. Our carat recoveries have improved each month during the quarter and we expect this trend to continue into the fourth quarter. The new ore sorting circuit, operating since May, is performing well and yielding both lower levels of diamond breakage and higher levels of diamond liberation. Both bode well for future value recovery.“ Matt Manson continued: “During the third quarter, we saw price weakness return to smaller and lower quality diamonds after more than a year of steady price gains. Underlying polished diamond demand remains strong in the US market, but is being impacted by currency weakness in the emerging markets amidst global trade concerns. This has put pressure on certain segments of the rough diamond trade. However, attendance at our Antwerp tenders remains strong, and we continue to achieve significantly higher pricing than during 2017 based on market strength in our larger and higher quality items.”

Third Quarter Diamond Sales Results

The third quarter sales of 184,620 carats represented run-of-mine production recovered between April and June 2018. Gross proceeds1 were $24.7 million2 at an average price of US$103 per carat ($134 per carat2). On a segmented basis, 140,872 carats of +7 DTC sieve size diamonds were sold at an average price of US$130 per carat ($169 per carat2), and 43,748 carats of -7 DTC sieve size diamonds were sold at an average price of US$17 per carat ($22 per carat2).

In addition to the sale of run of mine production, an additional 21,367 carats of diamonds smaller than the -7 DTC sieve size were sold in an out of tender contract sale for gross proceeds of $362,1502 at an average price of US$13 per carat ($17 per carat2). These represent recoveries of small diamonds produced between June and July 2018 that are in excess of that expected from the Renard Mineral Resource.

The achieved pricing of US$103 per carat for run of mine goods during the quarter represents a decrease of 7% compared to the second quarter. This reflects a market price correction since July in smaller and lower quality items attributed to challenging trading conditions in India. Prices in the larger and higher quality items have remained firm during this period. Weaker pricing in the cheaper items is expected to continue through the remainder of 2018. Overall, Renard diamonds, on a like versus like basis, have improved in pricing by 18% to the end of September 2018 since the first sale in November 2016.

A figure accompanying this announcement is available at:
http://www.globenewswire.com/NewsRoom/AttachmentNg/06dff569-ca40-4c3d-8789-85221e405975

Third Quarter Production Results

Third quarter mine production was 329,306 carats recovered from the processing of 597,761 tonnes of ore at an attributable grade of 55 carats per hundred tonnes (“cpht”). During the quarter, mill feed was derived from the Renard 2 underground mine (77%) and the Renard 65 open pit (23%). Processing rates in the quarter averaged 6,500 tonnes per day, compared to an annual plan of 7,000 tonnes per day. Mining and processing operations were affected by a forest fire in early July, which saw non-essential staff evacuated from the mine site, and production halted for approximately three days.

By the end of the quarter, the ramp-up of underground production at Renard 2 was completed, and a steady feed was achieved from the underground mining operations. Mining and processing rates in September averaged 7,310 and 6,820 tonnes of ore per day, respectively.

Fourth quarter production is expected to be sourced predominantly from the 290 meter level of the underground mine, complemented by Renard 65 open pit ore. The underground mine now has 20 drawpoints available for production, with additional drawpoints positioned progressively towards the center of the Renard 2 kimberlite becoming available during October through December.

Development of the main access ramp has progressed steadily during the course of the quarter, and is expected to reach the future 470 meter production level by the end of the year. Additional development work is ongoing in the Renard 3 kimberlite at the 290 meter level in support of its inclusion in the mining schedule in 2019.

ABOUT THE RENARD DIAMOND MINE

The Renard Diamond Mine is Quebec’s first producing diamond mine and Canada’s sixth. It is located approximately 250 km north of the Cree community of Mistissini and 350 km north of Chibougamau in the James Bay region of north-central Québec. Construction on the project commenced on July 10, 2014, and commercial production was declared on January 1, 2017. Average annual diamond production is forecast at 1.8 million carats per annum over the first 10 years of mining. Readers are referred to the technical report dated January 11, 2016, in respect of the September 2015 Mineral Resource estimate, and the technical report dated March 30, 2016, in respect of the March 2016 Updated Mine Plan and Mineral Reserve Estimate for further details and assumptions relating to the project.

QUALIFIED PERSON
Disclosure of a scientific or technical nature in this press release was prepared under the supervision of M. Patrick Godin, P.Eng. (Québec), Chief Operating Officer a “qualified person” under National Instrument (“NI”) 43-101.

ABOUT STORNOWAY DIAMOND CORPORATION

Stornoway is a leading Canadian diamond exploration and production company listed on the Toronto Stock Exchange under the symbol SWY and headquartered in Montreal. A growth oriented company, Stornoway owns a 100% interest in the world-class Renard Mine, Québec’s first diamond mine.

On behalf of the Board
STORNOWAY DIAMOND CORPORATION
/s/ “Matt Manson”
Matt Manson
President and Chief Executive Officer

For more information, please contact Matt Manson (President and CEO) at 416-304-1026 x2101
or Orin Baranowsky (CFO) at 416-304-1026 x2103 or Alexandre Burelle (Manager, Investor Relations and Business
Development) at 450-616-5555 x2264
or toll free at 1-877-331-2232
Pour plus d’information, veuillez contacter Alexandre Burelle (Directeur, Relations avec les investisseurs et
développement des affaires) au 450-616-5555 x2264, aburelle@stornowaydiamonds.com

** Website: www.stornowaydiamonds.com Email: info@stornowaydiamonds.com **
NT4

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