Industria
Mountain Province Diamonds Announces Third Quarter and Nine Months Ended September 30, 2023 Results
Given the challenging state of the current rough diamond market, the Company agreed with its joint venture partner, De Beers (the "Joint Venture Partner"), to pause all discretionary spending and cut costs where appropriate to focus on maximizing cash generation. Growth related expenditure at the Gahcho Kué mine will be suspended, with the option to resume when the Company and its JV Partner deem appropriate. This includes pausing spending and further work on the Gahcho Kué underground expansion. As a part of this spending reduction Dr. Tom McCandless , Vice President of Exploration will transition from a full time role to continuing to provide support on an as needs basis via a consulting arrangement.
As previously reported, during Q3 2023, 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 certain categories of the lower valued goods in order to defend its prices in the rough diamond market. In addition, recognising the overall lack of confidence in the rough diamond market, and a direct result of the Indian import ban, the Company took the unprecedented decision, subsequent to the quarter end, to sell a portion of its production to the Company's JV Partner De Beers, thereby removing it temporarily from the diamond market. The Company intends to recommence its tender sales in mid-December following the end of the Indian import moratorium.
Year to date 2023, 1,799,985 carats have been sold at an average price of $138 per carat ( US$103 per carat) for total proceeds of $248 .9 million ( US$184.9 million ) in comparison to 1,898,557 carats sold at an average price of $154 per carat ( US$119 per carat) for total proceeds of $292.9 million ( US$226.0 million ) during the same period in 2022.
The diamond market is experiencing 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 coupled with continued erosion to polished prices downstream have motivated diamond polishers to temporarily halt rough diamond buying and reduce polished inventories. This includes a temporary measure tabled by the Indian cutting and jewellery trade to voluntarily reduce rough diamond imports into the country.
The following table summarizes key operating statistics for the Gahcho Kué Mine in the three and nine months ended September 30, 2023 and 2022.
The Company will host its quarterly conference call on Friday, November 10 , 2023 at 11:00am EST .
Conference ID: 47510442
Date of call: 11/10/2023
Time of call: 11:00 Eastern Time
Expected Duration: 60 minutes
Webcast Link:
https://app.webinar.net/K9ARjDR2YOp
Participant Toll-Free Dial-In Number: (+1) 888-390-0546
Participant International Dial-In Number: (+1) 416-764-8688
A replay of the webcast and audio call will be available on the Company's website.
This news release refers to the terms "Cash costs of production per tonne of ore processed" and "Cash costs of production per carat recovered", both including and net of capitalized stripping costs and "Adjusted Earnings Before Interest, Taxes Depreciation and Amortization (Adjusted EBITDA)" and "Adjusted EBITDA Margin". Each of these is a non-IFRS performance measure and is referenced in order to provide investors with information about the measures used by management to monitor performance. These measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. They do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers.
Cash costs of production per tonne of ore processed and cash costs of production per carat recovered are used by management to analyze the actual cash costs associated with processing the ore, and for each recovered carat. Differences from production costs reported within cost of sales are attributed to the amount of production cost included in ore stockpile and rough diamond inventories.
Adjusted EBITDA is used by management to analyze the operational cash flows of the Company, as compared to the net income for accounting purposes. It is also a measure which is defined in the Notes documents. Adjusted EBITDA margin is used by management to analyze the operational margin % on cash flows of the Company.
The following table provides a reconciliation of the Adjusted EBITDA and Adjusted EBITDA margin with the net income on the condensed consolidated interim statements of comprehensive (loss) income:
The following table provides a reconciliation of the cash costs of production per tonne of ore processed and per carat recovered and the production costs reported within cost of sales on the condensed consolidated interim statements of comprehensive (loss) income:
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is a 49% participant with De Beers Canada in the Gahcho Kué diamond mine located in Canada's Northwest Territories . The Gahcho Kué Joint Venture property consists of several kimberlites that are actively being mined, developed, and explored for future development. The Company also controls more than 113,000 hectares of highly prospective mineral claims and leases that surround the Gahcho Kué Joint Venture property that include an indicated mineral resource for the Kelvin kimberlite and inferred mineral resources for the Faraday kimberlites.
For further information on Mountain Province Diamonds and to receive news releases by email, visit the Company's website at www.mountainprovince.com.
The disclosure in this news release of scientific and technical information regarding Mountain Province's mineral properties has been reviewed and approved by Matthew MacPhail , P.Eng., MBA, an employee of Mountain Province Diamonds and Qualified Person as defined by National Instrument 43-101
Mark Wall , President and CEO, 161 Bay Street, Suite 1410, Toronto , Ontario M5J 2S1, Phone: (416) 361-3562, E-mail: info@mountainprovince.com; Matthew MacPhail, Chief Technical and Sustainability Officer, 161 Bay Street, Suite 1410, Toronto , Ontario M5J 2S1, Phone: (416) 361-3562, E-mail: info@mountainprovince.com
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