Stornoway Diamond Corp. of Montreal released its Q2 2019 report and repeated its plea for a partner or buyer for the money losing Renard mine 350 km north of Chibougamau.
The company began the hunt for a buyer or investor this spring, but no indications of interest were received by the July 15, 2019, deadline. Instead, the deadline has been extended to the middle of September and Stornoway arranged bridge financing to keep the mine open during this time.
For Q2 2019, Stornoway recorded a net loss of $346.3 million, due primarily to a non-cash impairment charge of $442.7 million. The impairment was driven by the sagging prices for rough diamonds that forced the company to write down the value of property, plant, equipment, right of use assets and deferred transaction costs.
Revenues during the three months ended June 30, 2019, were $189.4 million made up of cash sales revenues of $40.7 million and non cash revenues of $148.7 million. Cash operating costs per carat recovered was $63.8, compared to $147.7 in Q2 2018. Cash and cash equivalents stood at $21.3 million, excluding $5.1 million of restricted deposits related to debt service and reserve account.
Said Stornoway in its Q2 news release: “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 price conditions.”