RapNet


Rapaport News

 

Mining

 

高级搜索
最新文章
视频
功能
新闻
挖掘
原石市场
抛光市场
制造
零售

Stornoway Diamond Fears for Its Future

Company unlikely to find buyer to save the business, it warns.
Aug 15, 2019 10:31 AM   By Rapaport News
Print 打印 Facebook Facebook Twitter Twitter 共享 Share


RAPAPORT... Stornoway Diamond Corporation has given a stern warning about its ability to remain in business, after failing to find a buyer for the company.

The miner had until July 15 to find an investor for its Renard operation as part of a bridge-loan agreement it signed. While lenders extended the deadline to September 16, the company has been unable to find an interested party, and feels it’s unlikely to do so, it said in a second-quarter earnings release on Wednesday. It is also unlikely that any deal would result in Stornoway shares having any recoverable value, the company cautioned.

The stock fell 9% Wednesday following the announcement, with shares trading at 0.025 cents on the Toronto Stock Exchange.

Stornoway warned that it does not have the required cash to continue operations for another year. 

“Management estimates that the working capital as at June 30, 2019, and forecasted cash flows, will not be sufficient to meet the corporation’s obligations, commitments and budgeted expenditures through June 30, 2020, in the current diamond-market conditions,” the company said. 

“Furthermore, there can be no assurance that the corporation’s common shares…will continue to trade on the Toronto Stock Exchange or on any other trading platform,” it added. 

The bank will consider the company to have defaulted on its CAD 11.7 million ($8.8 million) bridge loan if no one comes forward to acquire the business by the new deadline. The miner cannot rule out filing for protection from creditors, it cautioned. 

Stornoway, which launched commercial production at its Renard mine in Canada in January 2017, has incurred losses due to delays transitioning the deposit from open-pit to underground operations. It has also suffered from low-quality production resulting from bad weather, as well as prolonged weakness in the small-stone market.

Revenue more than tripled to CAD 189.4 million ($142.2 million) in the second quarter ending June 30, versus CAD 56.9 million ($42.7 million) a year ago, the company reported. Of the total, diamond sales amounted to CAD 47 million ($35.3 million) during the period, according to a July 10 press release.

However, its net loss deepened to CAD 346.3 million ($259.9 million), compared with a loss of CAD 35.9 million ($26.9 million) during the same period last year. The deterioration stemmed from a drop in diamond prices, which resulted in a devaluation of its assets. While sales volume jumped, the average value declined amid weak market conditions.

“Management is aware…of material uncertainties related to events and conditions that may cast significant doubt upon the corporation’s ability to continue as a going concern,” the company added.

Image: Workers in the underground portion of Renard. (Stronoway Diamond Corporation)
Print 打印 Facebook Facebook Twitter Twitter 共享 Share
Tags: Rapaport News, renard, Renard mine, stornoway, Stornoway Diamond Corporation, Toronto Stock Exchange
Similar Articles
AlrosaAlrosa Sales Slide in August
Sep 10, 2019
Alrosa’s sales fell 38% year on year to $18...
Lenders to Acquire Stornoway
James Avery Picks Non-Family Member as CEO
Comments: (0)  Add comment Add Comment
Arrange Comments Last to First



电洽: 1-702-893-9400
Member License Agreement   RapNet Trading Rules & Code of Conduct    私隐政策  
  
twitter twitter
关于 Rapaport
广告业务