Mountain Province Diamonds Announces Second Quarter and Half Year 2021 Results

4 August 2021

TSX and OTCQX: MPVD

TORONTO and NEW YORK, Aug. 4, 2021 /CNW/ - Mountain Province Diamonds Inc. ("Mountain Province", the "Company") (TSX: MPVD) (OTCQX: MPVD) today its financial and operating results for the second quarter ("Q2 2021") and first half 2021 ("H1 2021") ended June 30, 2021. All figures are expressed in Canadian dollars unless otherwise noted.

Operational Highlights for Second Quarter 2021 ("Q2 2021")

  • 811,000 tonnes treated, a 3% increase from the 786,000 tonnes treated in Q2 2020.
  • 1,764,000 carats recovered at an average grade of 2.18 carats per tonne, a 14% increase compared to the 1,547,000 carats recovered at 1.97 carats per tonne of Q2 2020.
  • 8,749,000 total tonnes mined, a 28% increase from 6,836,000 total tonnes mined in Q2 2020.

Financial Highlights for Second Quarter 2021 ("Q2 2021")

  • Revenue from 719,000 carats sold at $64.7 million (US$52.6 million) at an average realised value of $90 per carat (US$73) compared to $34 million from 757,000 carats sold in Q2 2020 (US$25 million) at an average realized value of $45 per carat (US$33). Including the $10.4 million (US$8.6 million) of upside profit related to the Dunebridge diamonds which were sold by Dunebridge to third parties, total revenue for the quarter was $75.1 million (US$61.2 million).
  • Adjusted EBITDA1 of $37.9 million compared to ($23.9) million in Q2 2020.
  • Earnings from mine operations $32.8 million compared to a loss from mine operations of $35.8 million in Q2 2020.
  • Cash costs of production, including capitalized stripping costs1 of $97 per tonne treated (2020: $125 per tonne) and $45 per carat recovered (2020: $63 per carat).
  • Net income at June 30, 2021 was $22.5 million or $0.11 earnings per share (2020: net loss $26.8 million or $0.13 loss per share). Included in the determination of the net income at June 30, 2021 are unrealized foreign exchange gains of $5.2 million, on the translation of the Company's USD-denominated long-term debt. The unrealized foreign exchange gains are a result of the strengthening of the Canadian dollar versus US dollar.

1Cash costs of production, including capitalized stripping costs, and Adjusted EBITDA are non-IFRS measures with no standardized meaning prescribed under IFRS.  See the Non-IFRS Measures section of the Company's June 30, 2021 MD&A for explanation and reconciliation.

Operational Highlights for H1 2021

  • 14.3 million total tonnes mined in H1 2020, an 11% decrease from the 16.2 million total tonnes mined in H1 2020.
  • 1,437,000 tonnes of ore treated in H1 2020; a 15% decrease compared to the 1,689,000 tonnes treated in H1 2020.
  • 3,156,000 carats recovered at an average grade of 2.20 carats per tonne, 1% lower than the 3,202,000 carats,1.90 carats per tonne, recovered in H1 2020.

Financial Highlights for H1 2020

  • Total sales revenue of $119 million (US$95.3 million) at an average realised value of $90 per carat (US$72) compared to $99.5 million in 2020 (US$74.2 million) at an average realized value of $70 per carat (US$52).
  • Half year Adjusted EBITDA2 of $57.1 million compared to ($1.1) million in H1 2020.
  • Earnings from mine operations of $46.5 million (2020: loss from mine operations $22.1 million).
  • Cash costs of production, including capitalized stripping costs2, of $115 per tonne treated (2020: $103 per tonne) and $53 per carat recovered (2020: $54 per carat).
  • Net income for half year 2021 at June 30, 2021 was $29.8 million or $0.14 earnings per share (2020: net loss $67.7 million or $0.32 loss per share). Included in the determination of the net loss for the half year at June 30, 2021 are unrealized foreign exchange gains of $10.3 million, on the translation of the Company's USD-denominated long-term debt. The unrealized foreign exchange losses are a result of the weakening of the Canadian dollar versus US dollar.
  • Capital expenditures in H1 2021 were $18.5 million, $10.1 million of which were deferred stripping costs, with the remaining $8.4 million accounting for sustaining capital expenditures related to mine operations.
  • Quarter end cash position of $34.5 million (December 31, 2020: $35.2 million) and a net working capital of $73.5 million (December 31, 2020: $52.8 million).

2Cash costs of production, including capitalized stripping costs, and Adjusted EBITDA are non-IFRS measures with no standardized meaning prescribed under IFRS.  See the Non-IFRS Measures section of the Company's June 30, 2021 MD&A for explanation and reconciliation.

Market Highlights for Q2 & H1 2021

In Q2 2021, 718,549 carats were sold at an average value of $90 per carat (US$73 per carat) for total proceeds of $64.7 million (US$52.6 million) in comparison to 602,773 carats sold at an average value of $90 per carat (US$71 per carat) for total proceeds of $54.2 million (US$42.7 million) in Q1 2021.

During H1 2021, 1,321,317 carats were sold at an average value of $90 per carat (US$72 per carat) for total proceeds of $119.0 million (US$95.3 million) in comparison to 1,416,677 carats sold at an average value of $70 per carat (US$52 per carat) for total proceeds of $99.5 million (US$74.2 million) in H1 2020.

The positive market environment which began at the start of the year continued through the second quarter. The global economy began to recover as many countries started to lift COVID-19 restrictions. This positive trend is expected to continue through the second half of 2021 as consumer confidence and spending levels continue to recover. Reinforcing this expectation is the fact that the US and China continue to promote consumer spending as part of their post-COVID-19 recovery plans, and major producers continue to adopt a price over volume approach to release of rough goods, supporting the industry's recovery.

Stuart Brown, the Company's President and Chief Executive Officer, commented:

"Gahcho Kué has rebounded well from a difficult start to the year, with production on-track to meet our guidance. The return to expected levels of production, combined with the strong market recovery we've seen in the first half of the year bodes well for our revenue and cash generation into the second half of the year. Our primary aims will now shift to finalising the new life of mine plan and our debt management where we will focus on repaying the short-term debt and begin to plan for refinancing the long-term debt.

On the rough diamond market front, we are seeing strong participation at our sales, this is helping to drive increases in diamond prices across the size spectrum. We expect this strong market environment to persist as the world continues emerges from the effects of the Covid-19 pandemic, and consumer spending at the retail level returns to pre-pandemic levels. Encouragingly, some advanced economies appear to be exceeding pre-pandemic levels."

Gahcho Kué Mine Operations

The following table summarizes key operating statistics for the Gahcho Kué Mine in the three and six months ended June 30, 2021 and 2020.

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