In the third quarter, Stornoway Diamond Corporation recorded a loss of $15.5 million due to a derivatives loss within its expenses category. This is compared to a $10.3 million net income during the three months ended October 31, 2015.
According to a company press release, this is due in large part to a change of $25.0 million in other expenses. Other expenses of $12.4 million are due to derivative loss, resulting from changes to fair value and foreign amortization of financing fees.
Despite this, On November 14, Stornoway saw its first sale of diamonds from the recently opened Renard mine, located in Quebec. This came a whopping two months earlier than anticipated.
Matt Manson, president and CEO, commented: “The current quarter reflects the wind-down of mine construction activities at Renard and the commencement of our production ramp-up. Our final forecast for mine capital cost continues in line with our previously reduced estimate of $775 million, and we remain on track for commercial production by year-end. Open pit mining and ore stockpiling continues comfortably ahead of plan, and the development of our underground mine ramp has largely caught-up the delays caused by water infiltration earlier in the year. As reported on October 6, our first diamond sale will commence today, November 14, in Antwerp, Belgium, which is earlier than previously planned. Based on the characteristics of our early diamond production and the rate of our ramp-up, we are on track to exceed our guidance for FY2016 carat production, albeit at a lower than expected initial diamond price owing to a higher than expected proportion of small diamonds in the early product mix. Proceeds from this diamond sale will represent un-budgeted pre-production revenue, and will supplement further our already strong balance sheet position.”