Stornoway reports fourth quarter and 2017 financial results

26 March 2018

Stornoway Diamond Corporation is pleased to report financial and operating results for the fourth quarter and year ended December 31, 2017. Earnings, operating expenses and capital expenses quoted reflect the recent adoption of a change in accounting policy regarding the capitalization of certain underground mine development costs.
Year Ended December 31, 2017 Highlights:

  • For the year ended December 31, 2017, Stornoway reported net loss of $114.6 million ($0.14 per share on a basic and fully diluted basis), compared to net income of $19.6 million in 2016 ($0.03 per share basic and fully diluted). Included in 2017 earnings is a non-cash impairment charge of $171.0 million, reflecting a lower diamond price environment than was originally forecast by the Corporation. Net income before impairment1 was $11.1 million for the fourth quarter and $15.0 million for the year.
  • During 2017, the Renard Diamond Mine attained commercial production, completed the processing ramp-up on schedule and accomplished two full quarters at or above plant nameplate operating capacity.
  • Mining in the Renard 2-3 and Renard 65 open pits in the fourth quarter comprised 827,181 tonnes, with 442,476 tonnes of ore extracted. For the full year, open pit mining stood at 4,475,854 tonnes (102% of plan), with 2,091,782 tonnes of ore extracted.
  • A total of 398,267 carats were recovered in the fourth quarter from the processing of 518,817 tonnes of ore at a grade of 77 carats per hundred tonnes (“cpht”). For the full year, a total of 1,642,934 carats were recovered from 1,956,436 tonnes of ore at 84 cpht (98%, 97% and 99% of plan respectively).
  • Diamond sales of 486,633 carats2 were completed in the fourth quarter with gross proceeds1,3 of $52.6 million at an average price of US$86 per carat ($108 per carat4). For the full year, Stornoway sold 1,701,561 carats for gross proceeds1,3 of $186.2 million at an average price of US$85 per carat ($109 per carat5).
  • In the fourth quarter, cash operating costs per tonne processed1,[6] were $42.10 per tonne ($54.85 per carat) and capital expenditures1,6 were $47.7 million. For the full year, cash operating costs per tonne processed1,6 were $45.02 per tonne ($53.60 per carat) and capital expenditures1,6 were $126.9 million.
  • In the fourth quarter, the Corporation reported adjusted EBITDA1,6 of $25.2 million, or 45.5% of revenues, and $85.0 million, or 43.3% of revenues, for the full year ended December 31, 2017.
  • At year end, cash, cash equivalents and short-term investments stood at $81.0 million and available liquidity1 to the Corporation, including available credit facilities, stood at $101.8 million.

(All quoted figures in CAD$, unless otherwise noted)

1 See “Non-IFRS Financial Measures” section
2 Including 32,989 carats that were sold in the third quarter for which revenue was realized in the fourth quarter.
3 Before stream and royalty
4 Based on an average $:US$ conversion rate of $1.26
5 Based on an average $:US$ conversion rate of $1.29
6 See “Change in Accounting Policy” section

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