Mountain Province announces 3Q

Oct 07, 2023

Mountain Province Diamonds announces operating and sales results for the third quarter ended September 30, 2023 (Q3 2023) from the Gahcho Kué Diamond Mine. Additionally, the Company provided details of its third quarter 2023 earnings.

According to the Operational Highlights for 3Q 2023, 877,617 ore tonnes treated, an 8% increase relative to Q3 2022, (Q3 2022: 816,201 tonnes treated). 1,326,160 carats recovered, 9% lower than the comparable quarter (Q3 2022: 1,451,455 carats). Average grade of 1.51 carats per tonne, a 15% decrease relative to Q3 2022 (1.78 carats per tonne). 887,695 ore tonnes mined, a 34% decrease relative to last year’s comparable quarter (Q3 2022: 1,345,654 ore tonnes mined).

Mountain Province Diamonds said, during the 3Q 2023, Sales Highlights registers 478,653 carats were sold for total proceeds of $60.3 million (US$45.3 million), resulting in an average price of $126 per carat (US$95 per carat). These results compare to Q3 2022 where 805,227 carats were sold for total proceeds of $110.6 million (US$83.3 million), resulting in an average value of $137 per carat (US$103 per carat).

The relative reduction in volume sold in Q3 2023 reflects the Company’s decision to strategically stock a sub-set of the lower value goods available for sale in order to defend its prices in the rough market. We expect to sell the goods stocked in the Company’s planned December sale.

The diamond market is experiencing very low levels of demand since returning from the August holiday period. Macro-economic concerns and delays to post-covid restocking of diamond jewellery in China have motivated diamond polishers to adopt conservative rough diamond buying and reduce polished inventories. This includes a temporary measure tabled by the Indian cutting and jewellery trade to voluntarily reduce rough imports into the country.

Mark Wall, the Company’s President, and Chief Executive Officer, commented, “Following the mid-June 5-day plant shut-down, plant stability has increased greatly allowing for improved throughput relative to performance earlier in 2023. We continue to monitor this improvement closely in order to ensure this level of performance is maintained going forward.

During quarter 3 we saw the devastating wildfires in British Columbia and the Northwest Territories in Canada.  The decision by the Northwest Territories to evacuate many remote communities, in addition to the territorial capital Yellowknife, created labor pressure on site as workers needed to support their families in evacuation, or were unable to return to work.

Despite these challenges, the team at site maintained operations and production during this period, although we did see a reduction in equipment utilization numbers due to workforce constraints, particularly in the mining area. Additionally, delays to mining the higher-grade ore in the 5034 pit persisted during the quarter, caused by the previously reported safety issues related to the interactive nature of the mining of the Tuzo and 5034 pits simultaneously. Access is being re-established to the 5034 pit bottom to recommence mining in that area.

On the rough diamond market, there has been much reported in various news outlets, including the import restrictions in India, which have further impacted the market during a weak period. The Company took the decision to withhold some of the sales during quarter 3 to defend its prices in the rough market. We continue to watch the diamond market closely to assess market conditions. In these very challenging markets we have decided, to pause all discretionary spending to focus on maximizing cash generation and repaying the debt.

As reported last quarter our 2023 guidance remains unchanged. Production is trending to the lower end of the range and production costs trending to the mid or upper end of the range.”


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