The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
North of 60 Mining News - August 9, 2024
Mountain Province increased ore mining by 63% and ore treatment by 29% in Q2 2024, reflecting the impact of recent process optimizations.
Mountain Province Diamonds Inc. August 7 announced its second-quarter financial results for 2024 from its Gahcho Kué diamond mine in Northwest Territories, Canada, highlighting strong operational performance and significant cost efficiency improvements despite facing a persistently challenging diamond market.
Located about 280 kilometers northeast of Yellowknife, Northwest Territories, Gahcho Kué is an open-pit diamond mine owned and operated by a joint venture between De Beers Canada Inc. (51%) and Mountain Province Diamonds (49%).
In the second quarter, Mountain Province saw a significant boost in mining activities at Gahcho Kué, with 971,311 metric tons of ore mined, marking a 63% increase compared to the 595,990 metric tons mined during the same period in 2023. The company also treated 965,984 metric tons of ore, up 29% from the 750,241 metric tons treated during the second quarter of 2023.
Despite these increases, the mine recovered 1,318,680 carats of diamonds during this year's second quarter, around 2% lower than the 1,339,196 carats recovered during the same period in 2023, reflecting a lower average grade of 1.37 carats per metric ton treated, compared to 1.79 carats per metric ton last year.
From those recovered, Mountain Province sold its share, totaling 557,361 carats for total proceeds of C$56.8 million (US$41.5 million) at an average price of C$102 per carat (US$74).
This compares to 360,308 carats sold for C$59.9 million (US$44.6 million) at an average price of C$166 per carat (US$124) in Q2 2023, representing a 55% increase in carats sold but a 5% decrease in total proceeds due to a 39% drop in the average price per carat.
"The first half (H1) of 2024 has produced adjusted EBITDA (earnings before interest, taxes, amortization) of C$74 million, which was supported by the Q2 adjusted EBITDA of C$24 million," said Mountain Province Diamonds President and CEO Mark Wall. "These results came in the context of a softer diamond market and the grade challenges in Q2, as previously reported."
Although Mountain Province reported adjusted EBITDA of C$24 million (US$18.1 million) for Q2, the company reported earnings from mine operations of C$12 million (US$9.1 million), compared to C$26.9 million (US$20.3 million) in Q2 2023.
Despite the operational improvements, the company reported a net loss of C$6.5 million, compared to a net income of C$17.3 million for the same quarter last year. This loss includes foreign exchange losses of C$3 million, primarily due to the translation of the company's US Dollar-denominated long-term debt, impacted by the weakening of the Canadian dollar versus the US dollar.
Nevertheless, the optimization efforts have resulted in sustained operational success and profitability, as reflected by the company's overall performance in the first half of 2024.
Wall emphasized the significance of these improvements.
"The processing facility at Gahcho Kue continued to operate well. For H1 2024 the main metric of the processing plant 'OPU' (utilisation), was 81.5%, versus 72.6% for H1 of 2023," he said. "These results continue to come from the work undertaken through 2023 and into 2024 to improve the performance of the processing plant."
In addition to optimizations, Mountain Province has also demonstrated a strong focus on controlling costs.
"On costs, we have finished H1 2024 with C$105 per tonne treated, against our 2024 guidance of C$124 to C$136 on a full year basis, and C$72 per carat recovered, against our full year guidance of C$96 to C$107 per carat," noted Wall. "At all levels of the business, we will continue to focus on operational efficiency and cost control as we move into the second half of the year."
Looking ahead, Mountain Province remains focused on maintaining operational efficiency and cost control as it moves into the second half of 2024. The company anticipates achieving its full-year production guidance of 4.2 to 4.7 million carats at the JV level and 2.3 to 2.6 million carats from its share.
Additionally, Mountain Province continues to explore opportunities to enhance the performance of the Gahcho Kué mine and is considering future projects to further bolster its operational capabilities.
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