Mountain Province sales 603K Cts in 1Q

Realised an average price of US$71 per carat 

Jewellery Market Bureau: Mountain Province Diamonds announces financial results for the first quarter (1Q) ended March 31, 2021 from the Gahcho Kué Diamond Mine. All figures are expressed in Canadian dollars unless otherwise noted. Additionally, the Company is providing production and cost guidance for 2021. 

By highlights for First Quarter 2021, Mountain Province said, 603,000 carats sold, with total proceeds of $54.2 million (US$42.7 million) at an average realised value of $90 per carat (US$71). Adjusted EBITDA1 of $19.1 million, earnings from mine operations recorded of $13.7 million. 

Focussing on operational highlights for 1Q 2021 Mountain Province informs that unplanned 22-day operational stand-down in February due to measures taken to limit the spread of Covid-19 at Gahcho Kué. 1,392,128 carats recovered, 16% lower than the comparable Q1 2020 had recorded of 1,655,121 carats. Average grade of 2.23 carats per tonne shown a 22% increase relative to Q1 2020 that stood at 1.83 carats per tonne.

During the first quarter 602,773 carats were sold for total proceeds of $54.2 million (US$42.7 million) resulting in an average value of $90 per carat (US$71 per carat). This is a 6% increase relative to the average value per carat in Q4 2020 of $85 per carat (US$64 per carat), and a near-return to pre-pandemic pricing levels seen in Q1 2020 (US$75 per carat).  

The increase in average values and the positive product mix sold in Q1 reflected the growing confidence across the rough diamond markets. Overall, on a like for like basis, compared to Q1 2020 our current average diamond value is now ahead of Q1 2020. 

Stuart Brown, the Company's President and Chief Executive Officer, commented, "With a tough quarter behind us, our focus now shifts to making up the carat shortfall, and revenue over the remainder of 2021. Despite the unplanned 22-day operational stand-down in February, we expect the process plant to make up most of the lost production by increasing the plant throughput levels with the bottom screen change.  

This will have a positive effect on the average value of diamonds recovered. We expect this to drive the recovery of between 6.3 – 6.5 million carats, at or just below 2020's recovery of 6.5 million carats. The impact of the Covid-19 outbreak at the mine, and the subsequent shut down has meant that we have had to cancel our planned May diamond sale in Antwerp. The cancellation of the sale coincided with our usual high cash spend during the annual winter road supply exercise; this meant that we faced some short-term liquidity challenges. 

We are  now able to confirm, as per the earlier announcement today, that we have agreed terms with Dunebridge Worldwide Ltd. for a short-term loan of US$33 million that will address our near term liquidity needs and allows us the time to execute on this year's revised mine plan. This plan shows us largely making up the lost production, revenue and cash generation during 2021 and should allow us to repay this loan by the end of 2021. 

The diamond industry is bearing up well through the ongoing challenges of Covid-19, globally retailers continue to report increasing revenue as economic activity increases, in turn this is having a positive impact on polished and rough diamond prices.  

There will, no doubt, still be issues to deal with in the coming months such as the intense second wave in India, hopefully with all the work being done and support we will see a recovery in India and all participants in the industry will benefit from the continued desire for natural diamonds. We believe that the recovery across all sectors of the industry will continue for the remainder of 2021."