Q3 Loss Forces Mountain Province to Cuts Costs
November 13, 23
(IDEX Online) - Mountain Province (MPD) says it will cut costs, suspend the underground expansion of its Gahcho Kue mine in Northwest Territories, Canada, as it announced a Q3 net loss of CAN$13.4m (US$9.7m).
The company blamed a downturn during the quarter, with major diamond producers significantly cutting their sales and Indian manufacturers adopting a voluntary two-month ban on rough purchases until mid-December.
Mark Wall, president and CEO, said MPD had performed "reasonably well" during H1, compared to its peers, as it battled low Chinese demand, the rise of lab growns, and the continued supply of Russian diamonds.
In its third quarter results the company said: "Given the challenging state of the current rough diamond market, the company agreed with its joint venture partner, De Beers, 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."
The Toronto-based miner, a 49 per cent joint venture partner with De Beers, also said that Dr. Tom McCandless, its Vice President of Exploration, would move from full-time position to a consultancy role.
During Q3 MPD said 478,653 carats were sold (down 18 per cent compared with Q3 2022) for total proceeds of CAN $60.3m (US$45.3m), a drop of 38 per cent. The average price per carat was CAN$126 per carat ($95), down by 25 per cent.
MPD said: "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."
Pic shows Gahcho Kue mine.