Mining

Mountain Province sees ‘positive momentum’ in battered diamond market

The record sale follows a near total closure in the diamond market in the spring due to the covid-19 pandemic and related travel restrictions.

About 75% of the company’s third-quarter revenues came from its sales agreement with Dunebridge Worldwide

The October sale – its second regular commercial sale since the beginning of the pandemic – brought in C$45.7 million from 559,528 carats sold at an average realized diamond price of $61 per carat.

That compares with third-quarter sales for the period ended Sept. 30, of 956,000 carats at an average realized price of $37 per carat. (In the third quarter of 2019, Mountain Province sold 791,000 carats at an average of $53 per carat.)

“After a sustained period of negative news with respect to the diamond industry and dealing with the impact of the covid-19 pandemic, we are pleased to see that the market for rough diamonds is starting to show some positive momentum,” said Stuart Brown, Mountain Province’s president and CEO, in a release.

“In the third quarter we have seen prices recovering close to pre-Covid levels from the lows seen during the peak of the pandemic. Although demand for rough diamonds is not yet back to pre-covid-19 levels, the low amount of supply coming into the market has helped raise industry confidence levels which has been a driving factor impacting demand and rough prices during the quarter.”

Mountain Province reported a net loss of C$6.5 million for the quarter on revenues of C$47.3 million, compared to a net loss of C$25.8 million in the same period of last year on revenues of C$54.8 million.

About 75% of the company’s third-quarter revenues came from its sales agreement with Dunebridge Worldwide, instituted in June. The company has now used $49.4 million of the $100-million agreement, which is good through the end of 2020, and applies only to stones under 10.8 carats.

Gahcho Kué is operated by Mountain Province’s 51% partner De Beers. For the quarter, 1.8 million carats were recovered at an average grade of 2.19 carats per tonne, up 17% from the 1.5 million carats recovered at a grade of 1.71 carats per tonne in last year’s comparable quarter. Total tonnes mined decreased by 16% to 9.9 million tonnes.

The mine is expected to produce 6.3-6.4 million carats (on a 100% basis) in 2020 at cash costs of C$100 to C$110 per tonne.

(A version of this article first appeared in the Canadian Mining Journal)

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