Stornoway Reports FY2018 Third Quarter Financial Results
Press Release
LONGUEUIL, Quebec, Nov. 14, 2018 — Stornoway Diamond Corporation (TSX-SWY; the “Corporation” or “Stornoway”) is pleased to report financial and operating results for the quarter ended September 30, 2018.
QUARTER ENDED SEPTEMBER 30, 2018 HIGHLIGHT S:
- For the three months ended September 30, 2018, Stornoway reported a net loss of $37.6 million ($0.05 per share on a basic and fully diluted basis). Adjusted net loss1 for the quarter was $31.7 million.
- During the quarter, two tender sales totalling 184,620 carats were completed for gross proceeds2 of $24.8 million3 at an average price of US$103 per carat ($134 per carat3). Revenue recognized was $29.4 million, derived from the sale of the above mentioned run of mine production and the sale of 21,367 carats of incidental production in one out of tender contract sale at an average price of US$13 per carat ($17 per carat1,[4]). 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 carats per hundred tonnes (“cpht”). Grade and carat recoveries during the quarter improved by 39% and 47% respectively compared to the second quarter with the mining of higher grade ore.
- Underground mining during the quarter comprised 571,405 tonnes, with 475,289 tonnes of ore extracted. Ramp up of the underground mine production was completed during the quarter and a steady feed was achieved from underground mining operations.
- 2018 carats produced and carats sold are expected within the low end of range for 2018 revised guidance on lower tonnes at higher average grades. Cash operating costs per tonne processed1 and per carat recovered1 are expected to be at the high end of the range, while capital expenditures1 are expected to be below guidance. Average diamond pricing achieved1 is expected to be within guidance.
- During the quarter, the new ore-sorting circuit at Renard was fully operational. Diamond recoveries since its introduction have exhibited lower levels of breakage than observed previously with comparable feed composition, and overall diamond liberation from ore has been improved.
- A program of Mineral Resource expansion and conversion was undertaken on the Renard 3 and Renard 4 kimberlites with a view to their acceleration in the Renard mine plan. Positive drilling and sampling results have been obtained.
- Cash operating costs per tonne processed1 were $57.15 per tonne ($103.74 per carat) and capital expenditures1 were $22.5 million.
- For the third quarter of FY2018, Stornoway reported adjusted EBITDA1 of $(11.8) million, or (47.2)% of Adjusted Revenues1, which includes an $13.9 million write-down of cash costs to bring inventory to its net realizable value.
- Subsequent to the quarter end, the corporation completed a series of financing transactions with lenders and key stakeholders that represent additional consideration and liquidity to the corporation of up to $129 million.
IBF4
