Rough production fall 4% YoY at Mountain Province

6,518,261 carats of diamond recovered during FY 2020

3,329,289 carats sold at an average value of US$51 per carat 

Mountain Province Diamonds announces production and sales results for the fourth quarter ended December 31, 2020 from the Gahcho Kué Diamond Mine. 9,796,823 total tonnes mined during the quarter, a 12% decrease on comparable period of Q4 2019 had recorded for 11,089,408. 35,870,474 total tonnes mined during FY 2020, a 17% decrease from comparable period of FY 2019 which had registered 43,224,827. 

1,521,617 carats recovered during the quarter at an average grade of 2.07 carats per tonne, 23% lower than comparable quarter (Q4 2019: 1,977,438 carats at 2.11). 6,518,261 carats recovered during FY 2020 at an average grade of 2.01 carats per tonne, 4% slightly lower than comparable period (FY 2019: 6,820,631 carats at 1.90).

According to Mountain Province Diamonds Q4 and FY 2020 diamond sales report, Q4 2020 diamond sales totaled 957,120 carats sold at an average value of $84 per carat (US$65 per carat) for total proceeds of $80.2 million (US$61.7 million) in comparison to 771,799 carats sold at an average value of $84 per carat (US$64 per carat) for total proceeds of $65.0 million (US$49.2 million) in Q4 2019. 

During FY 2020, 3,329,289 carats were sold at an average value of $68 per carat (US$51 per carat) for total proceeds of $227.0 million (US$171.3 million) in comparison to 3,284,520 carats sold at an average value of $84 per carat (US$63 per carat) for total proceeds of $276.3 million (US$208.2 million) in FY 2019. Sentiment in the rough diamond market was more positive towards the end of 2020 and has remained so as the market prepares for the first selling cycle of 2021. 

The Company's medium- to long-term outlook for rough diamonds remains positive. The major producers reported lower levels of sales through 2020 which, together with the stronger retail selling season, will help normalize inventory levels in the cutting centers.  

In addition, the recent closure of the high-volume Argyle diamond mine will help to establish more balanced supply and demand equilibrium in the diamond market. 

Importantly, consumer confidence and retail spending over the consumer season was particularly strong in Greater China while US sales were reasonably strong despite difficult Covid-19 conditions throughout the period.  Together these two markets account for approximately 65% by value of global retail sales of diamond jewelry.

Stuart Brown, the Company's President and Chief Executive Officer, commented, “Under very difficult circumstances, all driven by Covid-19, the Gahcho Kué Mine has performed well in being able to maintain production albeit at a reduced level and came very close to the revised guidance in tonnes mined and treated and exceeded the revised guidance target for carats recovered. The carat recovery was particularly pleasing under the circumstances and will place us in a good position for sales in the first quarter of 2021.

The diamond market came under unprecedented pressure from early March to early September and although this pressure remains, we did see a strong recovery with respect to rough diamond demand in the last quarter of the year.  The two sales during the last quarter saw significant price recovery across all categories of diamonds sold.

Early diamond jewelry retail sales reports are encouraging, and we expect to see steady demand for rough diamonds in the first quarter of 2021. There will no doubt still be challenges ahead but we are certainly more positive in our outlook as we start 2021 compared to the middle of 2020. 

With respect to production targets for 2021 we remain focused on maintaining the health and safety of all our employees and contractors as we continue to manage the impacts of Covid-19 at site.  We are finalizing all the metrics and will update the market when we have more certainty on the steady state performance of the mine as we hopefully exit the impact of Covid-19 during the coming year.  We look forward to keeping all stakeholders updated throughout 2021.”