Stornoway Diamond dealt another blow

Renard Diamond Mine. (Photo courtesy of Stornoway Diamond Corporation)

Stornoway Diamond Corporation (TSX-SWY) has officially been put on notice this week, facing a delisting review from the Toronto Stock Exchange.  

The beleaguered Canadian miner, originally co-founded by Eira Thomas, has been facing financial storms since late 2016, but its share price was holding at C20 cents in March, since declining nearly 90%.  

In April, Stornoway halted operations at Renard, which is the province of Quebec’s first diamond mine, and Stornoway’s primary asset.  

Stornoway has been exposed to the low quality end of the market, and those diamonds have been selling for much less, due to an unforeseen oversupply.  

Things were looking up in June, when Stornoway and its subsidiaries arranged bridge financing to keep the Renard mine operating while the company undertook a strategic review with the aim of restructuring its finances. 

But Stornoway since released grim financial results from the three months leading to June 30. The miner reported a net loss of over C$394 million, and said that management forecasts cash flows “will not be sufficient to meet the corporation’s obligations, commitments and budgeted expenditures through June 30, 2020 based upon current market diamond prices.”   

Stornoway is now being reviewed under the TSX’s remedial review process and has been granted 120 days to comply with all requirements for continued listing.

If Stornoway cannot demonstrate that it meets all TSX requirements on or before December 20, 2019, the Corporation’s securities will be delisted 30 days from that date.  

Friday afternoon, Stornoway’s stock was sitting at just over a penny.

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