Stornoway Diamond Corporation reported third quarter sales of 184,620 carats represented run-of-mine production recovered between April and June 2018.
Gross proceeds were $24.7 million at an average price of US$103 per carat.
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 carat), and 43,748 carats of -7 DTC sieve size diamonds were sold at an average price of US$17 per carat ($22 per carat).
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 carat). 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.
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.“
“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,” he added.