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Diamond Breakage Dents Renard Prices

Opening sales achieve $83 per carat, but optimism remains.
May 10, 2017 5:52 AM   By Rapaport News
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RAPAPORT... Prices at Stornoway Diamond Corporation’s Renard mine in Canada lagged during the first quarter due to a high rate of diamond breakage, the company said.

Sales since the mine’s launch yielded an average price of $83 per carat, Stornoway reported in its maiden quarterly revenue statement Wednesday, noting that its projected average price for the full year remained $100 to $132 per carat.

Production at the asset in Quebec started in October, with the miner declaring commercial production on January 1. An initial tender in Antwerp in November yielded a surprisingly high average price of $195 per carat from the sale of 38,913 carats, as a liquidity crunch in India forced the company to withdraw smaller goods from the event.

The company subsequently sold all of these lower-value goods during the first quarter, resulting in a lower average price than in the November sale. These three tenders and four contract sales between January and March brought total sales to $35.4 million (CAD 54.5 million) for 498,039 carats.

“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,” said Stornoway CEO Matt Manson.

“Pricing has also been impacted by better-than-expected liberation of small diamonds and the market effects of Indian demonetization,” he went on. “Nevertheless, we are seeing positive trends in both the quality of our diamond production and in rough market pricing.”

Renard’s initial production has received a positive response from the market, with reportedly high yields of polished diamonds coming from the rough, Manson added.

The company has introduced measures to limit diamond breakage and reduce the proportion of small diamonds recovered — a change that it expects will lift the average selling price.
Tags: Canada, mines, mining, Rapaport News, renard, Renard mine, stornoway, Stornoway Diamond Corporation
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