Stornoway Reports Fourth Quarter and 2018 Financial Results
Press Release
LONGUEUIL, Québec, March 28, 2019 — Stornoway Diamond Corporation (TSX-SWY; the “Corporation” or “Stornoway”) is pleased to report financial and operating results for the quarter and year ended December 31, 2018.
QUARTER AND YEAR ENDED DECEMBER 31, 2018 HIGHLIGHTS:
- For the year ended December 31, 2018, Stornoway reported Net loss $329.4 million ($ (0.39) per share on a basic and fully diluted basis), compared to Net loss of $114.2 million in 2017 ($ (0.14) per share basic and fully diluted). Included in 2018 results is (i) a non‐cash impairment charge of $83.2 million, (ii) a deferred income tax expense of $77.4 million and (iii) costs of goods sold of $227.1 million, $58.1 million of which is a write-down on inventory to bring it to its net realizable value, all reflecting lower diamond price environment than was originally forecasted by the Corporation. Adjusted Net Loss1 for the fourth quarter was $ 28.6 million and $ 133.8 million for the year.
- Mining in the Renard 65 open pit in the fourth quarter comprised 581,763 tonnes, with 102,333 tonnes of ore extracted. For the full year, mining in the Renard 2-3 and Renard 65 open pits stood at 2,265,895 tonnes, with 623,065 tonnes of ore extracted.
- A total of 485,616 carats were recovered in the fourth quarter from the processing of 605,960 tonnes of ore at a grade of 80 carats per hundred tonnes (“cpht”). For the full year, a total of 1,324,123 carats were recovered from 2,328,300 tonnes of ore at 57 cpht.
- Run-of-mine2 diamond sales of 253,929 carats were completed in the fourth quarter with gross proceeds3 of $31 million at an average price of US$92 per carat ($122 per carat4). For the full year, Stornoway sold 1,038,967 run-of-mine carats for gross proceeds3,4 of $141 million at an average price of US$105 per carat ($136 per carat5). The company sold an additional 164,322 carats of supplemental2 diamonds for gross proceeds3,4 of $3.5 million at an average price of US$16 per carat ($21 per carat5).
- In the fourth quarter, cash operating costs per tonne processed1 were $60.1 per tonne ($74.9 per carat recovered) and capital expenditures1 were $14.8 million. For the full year, cash operating costs per tonne processed1 were $57.1 per tonne ($100.4 per carat) and capital expenditures1 were $88.2 million.
- The Corporation reported adjusted EBITDA1 of $2.9 million in the fourth quarter, or 8.9% of revenues, and $(7.9) million, or (5.4)% of revenues, for the full year ended December 31, 2018.
- At year end, cash and cash equivalents stood at $35.8 million.
Patrick Godin, President and CEO, commented: “2018, the second year of commercial production for Stornoway’s Renard Diamond Mine, was one of transition from open pit mining to primarily underground production. This transition proved to be challenging, but our team overcame the difficulties we faced, safely and successfully completing the ramp up of the underground mine in 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. These transactions illustrate the strong support Stornoway has from its stakeholders, and is a strong testament to the quality of the Renard asset and our team. As the lowest cost diamond mine in Canada, Stornoway possesses unique leverage to take full advantage of an upswing in rough diamond prices. In 2019, we will be focused on efficiency, striving to maximize value generation in every aspect of our business. We will continue exploration and resource development on the Renard property, aiming to extend mine life and grasp strategic opportunities.”
IBF4
