TSX: MPVD
TORONTO, Nov. 6, 2024 /PRNewswire/ – Mountain Province Diamonds Inc. (“Mountain Province”, the “Company”) (TSX: MPVD) today announces financial results for the third quarter ended September 30, 2024 (“the Quarter” or “Q3 2024”) from the Gahcho Kué Diamond Mine (“GK Mine”). All figures are expressed in Canadian Dollars unless otherwise noted.
Q3 2024 Key Takeaways
679,599 carats were sold for total proceeds of $69.4 million (US$50.8 million) at an average price of $102 per carat (US$75).
Adjusted EBITDA1 of $17.3 million.
Loss from mine operations of $11.0 million.
Net loss of $19.0 million or $0.09 basic and diluted loss per share.
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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. |
Mark Wall, the Company’s President, and Chief Executive Officer, commented:
“The first nine months of 2024 has produced positive operational results in a period of challenging diamond prices, resulting in an adjusted EBITDA for the period of some $91 million.
Year to date in 2024 we have processed approximately 14% more tonnes than during the same period in 2023, while at the same time the ore grade went down by around 17%, which was driven by planned lower grade in Q3 and unplanned lower grade in March and early Q2 of 2024 as previously reported. The processed grade is currently performing in line with, or better than plan which when coupled with improved throughput has led to carat production trending to the upper end of our 2024 production guidance.
On costs we are well advanced in more expensive pit-bottom mining in both the Hearne and 5034 open pits. The focus on operational efficiency and costs remains front of mind, with the cost per tonne treated, including capitalized stripping, down 21% for the first nine months of 2024 when compared to the same period in 2023.
While the diamond market has been disappointing during the period I am optimistic that the price environment will recover during 2025, which is a period of planned production similar to 2024, followed by a very strong 2026 production year, as reported in our recent NI 43-101 Technical Report update. 2025 will be a period of continued cost and operational efficiency focus as well as an assessment of the company’s financing requirements in different diamond price environments.”
Reid Mackie, VP Sales & Marketing, commented:
“The Company continues to successfully navigate a challenging market. In Q3 2024 our sales achieved 100% sell-through with no unsold stock held at the end of September and a higher average selling price than the three preceding quarters. This positions the Company well to benefit from any improvements to rough diamond demand following the solid results anticipated from the all-important US holiday season retail sales.”
Financial Highlights for Q3 2024
Revenue from 679,599 carats sold at $69.4 million (US$50.8 million) at an average realised value of $102 per carat (US$75) compared to $60.3 million from 478,653 carats sold in Q3 2023 (US$45.3 million) at an average realized value of $126 per carat (US$95).
Adjusted EBITDA1 of $17.3 million compared to $25.1 million in Q3 2023.
Loss from mine operations of $11.0 million compared to income from mine operations of $2.7 million in Q3 2023.
Cash costs of production, including capitalized stripping costs1 of $125 per tonne treated (2023: $118 per tonne) and $101 per carat recovered (2023: $78 per carat).
Net loss of $19.0 million or $0.09 loss per share (2023: Net loss of $13.4 million or $0.06 loss per share). Included in the determination of net loss are foreign exchange gains of $3.0 million, the majority of which is an unrealized income arising on the translation of the Company’s US Dollar denominated long term debt, because of the strengthening of the Canadian Dollar versus US Dollar.
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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 the Non-IFRS Measures section of the Company’s September 30, 2024 MD&A for explanation and reconciliation. |
Operational Highlights for Q3 2024(all figures reported on a 100% basis unless otherwise stated)
961,371 ore tonnes treated, 10% higher than Q3 2023 (877,617 tonnes treated)
1,187,912 carats recovered, 10% lower than Q3 2023 (1,326,610 carats recovered)
Average grade of 1.24 carats per tonne treated, 18% lower than Q3 2023 (1.51 carats per tonne)
923,814 ore tonnes mined, 4% higher than Q3 2023 (887,617 ore tonnes mined)
Sales Highlights for Q3 2024
As previously released, during the third quarter, 679,599 carats were sold for total proceeds of $69.4 million (US$50.8 million), resulting in an average price of $102 per carat (US$75 per carat). These results compare to Q3 2023 where 478,653 carats were sold for total proceeds of $60.3 million (US$45.3 million) at an average price per carat of $126 per carat (US$95 per carat).
Financial Highlights for the nine months ended September 30, 2024
Total sales revenue of $215.7 million (US$158.4 million) at an average realised value of $99 per carat (US$73) compared to $248.9 million in 2023 (US$184.9 million) at an average realized value of $138 per carat (US$103).
Adjusted EBITDA2 of $91.3 million (2023: $123.3 million).
Earnings from mine operations of $31.4 million for the nine months ended September 30, 2024, compared to $76.8 million for the nine months ended September 30, 2023
Cash costs of production, including capitalized stripping costs2, of $112 per tonne treated (2023: $142 per tonne) and $81 per carat recovered (2023: $85 per carat).
Net loss of $18.6 million or $0.09 basic and diluted loss per share (for the nine months ended September 30, 2023: net income $32.1 million or $0.15 basic and diluted earnings per share). Included in the determination of the net loss for the nine months ended September 30, 2024, are foreign exchange losses of $6.2 million, the majority of which is an unrealized loss on the translation of the Company’s US Dollar denominated long term debt arising because of the weakening of the Canadian Dollar versus US Dollar.
Capital expenditures $54.9 million, $47.7 million of which were deferred stripping costs, with the remaining $7.2 million for sustaining capital expenditures related to mine operations.
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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 September 30, 2024 MD&A for explanation and reconciliation. |
Operational Highlights for the nine months ended September 30, 2024(all figures reported on a 100% basis unless otherwise stated)
24,400,000 total tonnes mined in the nine months ended September 30, 2024, 11% lower than 27,316,000 total tonnes mined for the nine months ended September 30, 2023.
2,733,000 tonnes of ore treated in the nine months ended September 30, 2024, 14% higher than 2,395,000 tonnes treated for the nine months ended September 30, 2023.
3,771,000 carats recovered at an average grade of 1.38 carats per tonne in the nine months ended September 30, 2024, 5% lower than 3,985,000 carats, (1.66 carats per tonne) recovered for the nine months ended September 30, 2023.
Gahcho Kué Mine Operations
The following table summarizes key operating statistics for the Gahcho Kué Mine in the three and nine months ended September 30, 2024, and 2023.
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September 30, 2024 |
September 30, 2023 |
September 30, 2024 |
September 30, 2023 |
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GK operating data |
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Mining |
|||||
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*Ore tonnes mined |
kilo tonnes |
924 |
888 |
3,842 |
1,912 |
|
*Waste tonnes mined |
kilo tonnes |
7,679 |
8,258 |
20,558 |
25,404 |
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*Total tonnes mined |
kilo tonnes |
8,603 |
9,146 |
24,400 |
27,316 |
|
*Ore in stockpile |
kilo tonnes |
3,426 |
1,276 |
3,426 |
1,276 |
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Processing |
|||||
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*Ore tonnes processed |
kilo tonnes |
961 |
878 |
2,733 |
2,395 |
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*Average plant throughput |
tonnes per day |
10,446 |
9,756 |
9,974 |
8,773 |
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*Average diamond recovery |
carats per tonne |
1.24 |
1.51 |
1.38 |
1.66 |
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*Diamonds recovered |
000’s carats |
1,187 |
1,326 |
3,771 |
3,985 |
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Approximate diamonds recovered – Mountain Province |
000’s carats |
582 |
650 |
1,848 |
1,953 |
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Cash costs of production per tonne of ore, net of capitalized stripping ** |
$ |
90 |
81 |
77 |
93 |
|
Cash costs of production per tonne of ore, including capitalized stripping** |
$ |
125 |
118 |
112 |
142 |
|
Cash costs of production per carat recovered, net of capitalized stripping** |
$ |
73 |
54 |
56 |
56 |
|
Cash costs of production per carat recovered, including capitalized stripping** |
$ |
101 |
78 |
81 |
85 |
|
Sales |
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Approximate diamonds sold – Mountain Province*** |
000’s carats |
680 |
479 |
2,175 |
1,800 |
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Average diamond sales price per carat |
US |
$ 75 |
$ 95 |
$ 73 |
$ 103 |
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* at 100% interest in the Gahcho Kué Mine |
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**See Non-IFRS Measures section of the Company’s September 30, 2024 MD&A for explanation and reconciliation |
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***Includes the sales directly to De Beers for fancies and specials acquired by De Beers through the production split bidding process |
Financial Performance
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(in thousands of Canadian dollars, except where otherwise noted) |
September 30, 2024 |
September 30, 2023 |
September 30, 2024 |
September 30, 2023 |
|
|
Sales |
$ |
69,413 |
60,277 |
215,669 |
248,852 |
|
Carats sold |
000’s carats |
680 |
479 |
2,175 |
1,800 |
|
Average price per carat sold |
$/carat |
102 |
126 |
99 |
138 |
|
Cost of sales per carat* |
$/carat |
118 |
120 |
85 |
96 |
|
(Loss) earnings from mine operations per carat |
$ |
(16) |
6 |
14 |
42 |
|
(Loss) earnings from mine operations |
% |
(16 %) |
5 % |
14 % |
31 % |
|
Selling, general and administrative expenses |
$ |
2,795 |
3,250 |
9,105 |
10,480 |
|
Operating (loss) income |
$ |
(14,393) |
(1,125) |
21,438 |
60,317 |
|
Net (loss) income for the period |
$ |
(18,988) |
(13,421) |
(18,648) |
32,121 |
|
Basic(loss) earnings per share |
$ |
(0.09) |
(0.06) |
(0.09) |
0.15 |
|
Diluted (loss) earnings per share |
$ |
(0.09) |
(0.06) |
(0.09) |
0.15 |
|
* This cost of sales per carat includes the cost of acquiring 51% of the fancies and specials which have been sold, after having been won in a tendering process with De Beers Canada. |
Conference Call
The Company will host its quarterly conference call on Thursday, November 7th, 2024, at 11:00AM Eastern Time.
Title: Mountain Province Diamonds Inc. Q2 2024 Earnings Conference CallDate of call: 11/07/2024Time of call: 11:00AM Eastern Time
Expected Duration: 60 minutes
Webcast Link:
https://app.webinar.net/LX9ZQJL6ARV
North American Toll-Free Number: (+1) 888-510-2154
Participant Local/International Number: (+1) 437-900-0527
A replay of the webcast and audio call will be available on the Company’s website.
Reconciliation of Non-IFRS measures
This news release refers to the terms “Cash costs of production per tonne of ore processed” and “Cash costs of production per carat recovered,” both including and net of capitalized stripping costs and “Adjusted Earnings Before Interest, Taxes Depreciation and Amortization (Adjusted EBITDA)” and “Adjusted EBITDA Margin.” Each of these is a non-IFRS performance measure and is referenced to provide investors with information about the measures used by management to monitor performance. These measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. They do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers.
Cash costs of production per tonne of ore processed and cash costs of production per carat recovered are used by management to analyze the actual cash costs associated with processing the ore, and for each recovered carat. Differences from production costs reported within cost of sales are attributed to the amount of production cost included in ore stockpile and rough diamond inventories.
Adjusted EBITDA is used by management to analyze the operational cash flows of the Company, as compared to the net income for accounting purposes. It is also a measure which is defined in the Notes documents. Adjusted EBITDA margin is used by management to analyze the operational margin % on cash flows of the Company.
The following table provides a reconciliation of the Adjusted EBITDA and Adjusted EBITDA margin with the net (loss) income on the consolidated statements of comprehensive (loss) income:
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September 30, 2024 |
September 30, 2023 |
September 30, 2024 |
September 30, 2023 |
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|
Net (loss) income for the period |
$ (18,988) |
$ (13,421) |
$ (18,648) |
$ 32,121 |
|
|
Add/deduct: |
|||||
|
Non-cash depreciation and depletion |
20,200 |
15,826 |
56,574 |
51,784 |
|
|
Loss on sale of equipment |
– |
– |
527 |
– |
|
|
Net realizable value adjustment included in production costs |
10,765 |
9,706 |
10,765 |
9,706 |
|
|
Share-based payment expense |
216 |
429 |
586 |
1,135 |
|
|
Fair value gain of warrants |
(178) |
(2,265) |
(2,034) |
(2,974) |
|
|
Gain on lease |
– |
– |
(46) |
– |
|
|
Finance expenses |
10,837 |
8,990 |
31,885 |
27,292 |
|
|
Derivative (gains) losses |
(891) |
1,094 |
3,911 |
223 |
|
|
Deferred income taxes |
(1,795) |
(1,310) |
1,290 |
2,590 |
|
|
Current income taxes |
150 |
150 |
450 |
1,050 |
|
|
Unrealized foreign exchange (gains) losses |
(3,042) |
5,909 |
6,008 |
400 |
|
|
Adjusted earnings before interest, taxes, depreciation and depletion (Adjusted EBITDA) |
$ 17,274 |
$ 25,108 |
$ 91,268 |
$ 123,327 |
|
|
Sales |
69,413 |
60,277 |
215,669 |
248,852 |
|
|
Adjusted EBITDA margin |
25 % |
42 % |
42 % |
50 % |
The following table provides a reconciliation of the cash costs of production per tonne of ore processed and per carat recovered and the production costs reported within cost of sales on the consolidated statements of comprehensive (loss) income:
|
Cash operating cost per tonne ore processed and per carat recovered |
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(in thousands of Canadian dollars, except where otherwise noted) |
September 30, 2024 |
September 30, 2023 |
September 30, 2024 |
September 30, 2023 |
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|
Cost of sales production costs |
$ |
55,018 |
37,233 |
114,754 |
104,968 |
|
|
Timing differences due to inventory and other non-cash adjustments |
$ |
(12,504) |
(2,224) |
(12,074) |
4,224 |
|
|
Cash cost of production of ore processed, net of capitalized stripping |
$ |
42,514 |
35,009 |
102,680 |
109,192 |
|
|
Cash costs of production of ore processed, including capitalized stripping |
$ |
58,945 |
50,743 |
149,999 |
166,206 |
|
|
Tonnes processed |
kilo tonnes |
471 |
431 |
1,339 |
1,174 |
|
|
Carats recovered |
000’s carats |
582 |
650 |
1,848 |
1,953 |
|
|
Cash costs of production per tonne of ore, net of capitalized stripping |
$ |
90 |
81 |
77 |
93 |
|
|
Cash costs of production per tonne of ore, including capitalized stripping |
$ |
125 |
118 |
112 |
142 |
|
|
Cash costs of production per carat recovered, net of capitalized stripping |
$ |
73 |
54 |
56 |
56 |
|
|
Cash costs of production per carat recovered, including capitalized stripping |
$ |
101 |
78 |
81 |
85 |
|
****
About Mountain Province Diamonds Inc.
Mountain Province Diamonds is a 49% participant with De Beers Canada in the Gahcho Kué diamond mine located in Canada’s Northwest Territories. The Gahcho Kué Joint Venture property consists of several kimberlites that are actively being mined, developed, and explored for future development. The Company also controls more than 113,000 hectares of highly prospective mineral claims and leases surrounding the Gahcho Kué Mine that include an Indicated mineral resource for the Kelvin kimberlite and Inferred mineral resources for the Faraday kimberlites. Kelvin is estimated to contain 13.62 million carats (Mct) in 8.50 million tonnes (Mt) at a grade of 1.60 carats/tonne and value of US$63/carat, at February 2019. Faraday 2 is estimated to contain 5.45Mct in 2.07Mt at a grade of 2.63 carats/tonne and value of US$140/ct, at February 2019. Faraday 1-3 is estimated to contain 1.90Mct in 1.87Mt at a grade of 1.04 carats/tonne and value of US$75/carat, at February 2019. All resource estimations are based on a 1mm diamond size bottom cut-off.
Qualified Person
The disclosure in this news release of scientific and technical information regarding Mountain Province’s mineral properties has been reviewed and approved by Dan Johnson, P.Eng., a director of Mountain Province Diamonds and Qualified Persons as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects.
Caution Regarding Forward Looking Information
This news release contains certain “forward-looking statements” and “forward-looking information” under applicable Canadian and United States securities laws concerning the business, operations and financial performance and condition of Mountain Province Diamonds Inc. Forward-looking statements and forward-looking information include, but are not limited to, statements with respect to operational hazards, including possible disruption due to pandemic such as COVID-19, its impact on travel, self-isolation protocols and business and operations, estimated production and mine life of the project of Mountain Province; the realization of mineral reserve estimates; the timing and amount of estimated future production; costs of production; the future price of diamonds; the estimation of mineral reserves and resources; the ability to manage debt; capital expenditures; the ability to obtain permits for operations; liquidity; tax rates; and currency exchange rate fluctuations. Except for statements of historical fact relating to Mountain Province, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as “anticipates,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” “targets,” “intends,” “likely,” “will,” “should,” “to be”, “potential” and other similar words, or statements that certain events or conditions “may”, “should” or “will” occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are based on several assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Many of these assumptions are based on factors and events that are not within the control of Mountain Province and there is no assurance they will prove to be correct.
Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include the development of operation hazards which could arise in relation to COVID-19, including, but not limited to protocols which may be adopted to reduce the spread of COVID-19 and any impact of such protocols on Mountain Province’s business and operations, variations in ore grade or recovery rates, changes in market conditions, changes in project parameters, mine sequencing; production rates; cash flow; risks relating to the availability and timeliness of permitting and governmental approvals; supply of, and demand for, diamonds; fluctuating commodity prices and currency exchange rates, the possibility of project cost overruns or unanticipated costs and expenses, labor disputes and other risks of the mining industry, failure of plant, equipment or processes to operate as anticipated.
These factors are discussed in greater detail in Mountain Province’s most recent Annual Information Form and in the most recent MD&A filed on SEDAR, which also provide additional general assumptions in connection with these statements. Mountain Province cautions that the foregoing list of crucial factors is not exhaustive. Investors and others who base themselves on forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. Mountain Province believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon. These statements speak only as of the date of this news release.
Although Mountain Province has attempted to identify crucial factors that could cause actual actions, events, or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events, or results not to be anticipated, estimated, or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Mountain Province undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements. Statements concerning mineral reserve and resource estimates may also be deemed to constitute forward-looking statements to the extent they involve estimates of the mineralization that will be encountered as the property is developed.
Further, Mountain Province may make changes to its business plans that could affect its results. The principal assets of Mountain Province are administered pursuant to a joint venture under which Mountain Province is not the operator. Mountain Province is exposed to actions taken or omissions made by the operator within its prerogative and/or determinations made by the joint venture under its terms. Such actions or omissions may impact the future performance of Mountain Province. Under its current note and revolving credit facilities Mountain Province is subject to certain limitations on its ability to pay dividends on common stock. The declaration of dividends is at the discretion of Mountain Province’s Board of Directors, subject to the limitations under the Company’s debt facilities, and will depend on Mountain Province’s financial results, cash requirements, prospects, and other factors deemed relevant by the Board
SOURCE Mountain Province Diamonds Inc.
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