Stornoway Diamond Corporation notes that sales at its Renard mine lagged during the first quarter. According to the Canadian company, this was due to a high rate of diamond breakage.
“Achieved pricing in our first tender sales reflects the higher-than-normal levels of diamond breakage that we have been experiencing during the first months of processing ramp-up,” says Matt Manson, Stornoway’s CEO. “Pricing has also been impacted by better-than-expected liberation of small diamonds and the market effects of Indian demonetization … Nevertheless, we are seeing positive trends in both the quality of our diamond production and in rough market pricing.”
Since the mine’s launch in October, sales have yielded an average price of $83 per carat. However, the corporation’s projected average price for the full year remains $100 to $132 per carat.
An initial Antwerp tender in November yielded a surprisingly high average price of $195 per carat from the sale of 38,913 carats. This was due to a liquidity crunch in India, which forced the company to withdraw its smaller goods.
Subsequently, the company sold all of its lower-value goods during the first quarter, resulting in a lower average price. Along with four contract sales between January and March, the three tenders brought Stornoway’s total sales to $54.5 million for 498,039 carats.
Now, the company has introduced measures to limit diamond breakage and reduce the proportion of small diamonds recovered. Stornoway expects that this change will lift its average selling price.
