Stornoway Diamond Suspends Open Pit Operations
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(Kitco News) - Citing mechanical issues and a poor rough diamond market, Stornoway Diamond (TSE: SWY) announced today that it would suspend open pit operations at its Renard 65 site.
The Quebec-based diamond miner made the announcement in its first-quarter production and sales results.
Stornoway Diamonds is trading close to its 52-week low of 10.5 cents as of 12:15 p.m. ET. Its 52-week range is 9 cents to 59 cents.
In the first quarter, Stornoway sold 429K carats, up nearly a third from the previous quarter, for total gross proceeds of C$47M.
"Sales in the first quarter were significantly higher than the previous quarter on the good production results of the last three months of 2018, which was the first full quarter with fully ramped-up underground operations," said Patrick Godin, President and CEO of Stornoway, in a news release.
"The average pricing obtained increased as well, primarily due to improvements in the quality of the goods and the mix sold."
"The rough diamond market, however, did not show notable improvement from the fourth quarter. Processing results were down sequentially on mechanical issues at the plant experienced in January and February, but March showed modest outperformance versus budgeted daily rate, and we are confident that this rate can be maintained looking forward and believe that the small underperformance relative to budget in the first two months will be caught up over the balance of 2019.
"We have taken the decision to temporarily halt production from the Renard 65 open pit, as current Renard 65 ore stockpiles are sufficient to maintain its planned contribution to the process plant’s feed into the second quarter of 2020. As such, no effect on revenue in 2019 is to be expected. Surface equipment operators were trained and have begun transitioning to our underground operations."