9 November 2023
TSX:MPVD and OTC: MPVDF
TORONTO, Nov. 9, 2023 /CNW/ - Mountain Province Diamonds Inc. ("Mountain Province", the "Company") (TSX: MPVD) (OTC: MPVDF) announces its financial and operating results for the third quarter ("Q3 2023") and nine months ended September 30, 2023. All figures are expressed in Canadian dollars unless otherwise noted.
Q3 2023 Key Highlights
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1Cash costs of production, including capitalized stripping costs, and adjusted EBITDA are non-IFRS measures with no standardized meaning prescribed under IFRS. See "Reconciliation of non-IFRS measures" at the end of the news release for explanation and reconciliation. |
Company to pause all discretionary spending and focus on cash generation
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.
Mark Wall, the Company's President and Chief Executive Officer, commented:
"For most of 2023 the diamond market has been under pressure as a result of various factors which include: a slowing market in the US; low Chinese demand; and the uncertainty in the diamond supply chain related to Lab Grown diamonds and continued supply of Russian diamonds following the invasion of Ukraine. Despite this, MPD performed reasonably well through H1 compared to our peers; largely as a result of our sales strategy and mix of goods outperforming the general market. In Q3 the market deteriorated further. The major diamond producers have reacted by significantly cutting their sales and the Indian diamond industry announced a two month import moratorium to run from October 15th to December 15th. The hope being that this pause in selling rough diamonds, together with December being the busiest time for diamond purchases, will reduce the excess supply in the sector and stabilise prices.
For our part, the Company took the decision to withhold some of our lower value goods during Quarter 3 and took the unprecedented step in October to sell some of our production directly to our joint venture partner, De Beers. In addition, and as stated in our October 6 press release, we have also agreed with De Beers to pause all discretionary spend and reduce costs wherever prudent. We continue to monitor the market closely, while focusing on the controllables, which are costs, production and operating efficiencies. We aim to maintain the optionality of growth opportunities for an improved price environment.
On the production front, Q3 saw continued strong performance from the process plant, with Overall Plant Utilization of 84%, above the design range of 80 – 82%. Continued strong performance from the plant, combined with a planned improved grade profile coming out of the 5034 and Hearne pits will be required to hit our carat production guidance for the year."
Operational Highlights for Q3 2023