Press Release
TORONTO and NEW YORK, May 8, 2019 – Mountain Province Diamonds Inc. (“Mountain Province”, or the “Company”) (TSX and NASDAQ: MPVD) today announces its financial and operating results for the quarter ended March 31, 2019 (or “Q1”). All figures are expressed in Canadian dollars unless otherwise noted.
The Company is also pleased to announce that as a result of plant enhancement modifications, it has increased its 2019 guidance from 3.1 – 3.2 million tonnes treated to 3.2 – 3.3 million tonnes.
Operational Highlights for First Quarter 2019
Financial Highlights for First Quarter 2019
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 March 31, 2019 MD&A for explanation and reconciliation
Market Highlights for First Quarter 2019
The rough diamond market is showing signs of stabilising during the quarter, with lower rough supplies predicted for 2019 and cutting centre inventories expected to return to more normal levels.
Reid Mackie, the Company’s Vice President of Diamond Marketing, commented: “We have seen stability return, both in terms of diamond demand and prices achieved which resulted in our first quarter sales outperforming our expectations. Most of our diamond categories experienced modest but consecutive price increases and healthy demand from customers resulted in all lots offered being sold.
2019 Revised Guidance
The Company is pleased to revise its 2019 outlook for production as a result of ongoing plant enhancements, this has enabled higher throughput for tonnes treated. The previous 2019 operational outlook consisted of approximately 3.1 million to 3.2 million tonnes treated. The total ore tonnes treated has been revised to 3.2 million to 3.3 million tonnes due to the increased plant performance. The Company maintains its total carat production range of 6.6 million and 6.9 million carats, as previously announced (100% basis) with recovered grades of between 2.12 and 2.16 carats per tonne. The Company also maintains its cost guidance of $110 – $120 per tonne or $50 – $54 per carat recovered for fiscal year 2019.
Q1 2019 Summary
Q1 2019 mining results were in line with the Company’s expectations with over 9.5 million tonnes of material mined, 16% higher than the same period last year.
The average grade for the first quarter has been lower than the average for 2018, but in line with the expected outcome for Q1. The lower grade during the quarter was partly driven by adverse weather conditions preventing access to planned higher grade ore areas as well as mine plan sequencing where lower grade ore was mined from the South West Corridor and parts of the Hearne pit. In addition to this, the plant enhancements and the change to the bottom screen sizes has resulted in higher throughput in the plant. The changes have resulted in the recovery of coarser size frequency distribution and is expected to translate into an increased average value per carat recovered. The plant enhancements will continue to be implemented and monitored as the year progresses.
The plant treated 870,949 tonnes, or approximately 9,677 tonnes per day, 11% higher than the same period last year, and recovered just under 1.6 million carats. The Gahcho Kué Mine remains on track to achieve it’s 2019 production guidance of 6.6 – 6.9 million carats.
The total ore tonnes mined were slightly less than planned for in Q1, due to extended excessive cold weather periods which prevented access to certain parts of the orebody. The ore stockpile has been utilized to accommodate higher throughput in the plant. The shortfall of ore tonnes mined year to date will be caught up during the summer months.
Stuart Brown, the Company’s President and Chief Executive Officer, commented: “We are pleased with the Q1 operational and financial results for the Gahcho Kué Mine, given the mining area which consisted of lower grade ore. Production figures are slightly ahead of expectations and costs are at the lower end of our guidance for 2019. The 2019 target of 3.3 – 3.45 million carats (our 49% share of the full production) recovered, remains unchanged. We are encouraged by the early results of the plant changes implemented and look forward to updating the market on the progress of this initiative in the coming months.”
Gahcho Kué Mine Operations
The following table summarizes key operating statistics for the Gahcho Kué Mine in the three months ended March 31, 2019 and 2018.
Three months ended |
Three months ended |
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March 31, 2019 |
March 31, 2018 |
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GK operating data |
|||||
Mining |
|||||
*Ore tonnes mined |
kilo tonnes |
605 |
741 |
||
*Waste tonnes mined |
kilo tonnes |
8,923 |
7,461 |
||
*Total tonnes mined |
kilo tonnes |
9,528 |
8,202 |
||
*Ore in stockpile |
kilo tonnes |
295 |
796 |
||
Processing |
|||||
*Ore tonnes treated |
kilo tonnes |
871 |
786 |
||
*Average plant throughput |
tonnes per day |
9,467 |
8,733 |
||
*Average diamond recovery |
carats per tonne |
1.82 |
2.09 |
||
*Diamonds recovered |
000’s carats |
1,585 |
1,641 |
||
Approximate diamonds recovered – Mountain Province |
000’s carats |
777 |
804 |
||
Cash costs of production per tonne, net of capitalized stripping ** |
$ |
94 |
75 |
||
Cash costs of production per tonne of ore, including capitalized stripping** |
$ |
111 |
76 |
||
Cash costs of production per carat recovered, net of capitalized stripping** |
$ |
52 |
36 |
||
Cash costs of production per carat recovered, including capitalized stripping** |
$ |
61 |
37 |
||
Sales |
|||||
Approximate diamonds sold – Mountain Province*** |
000’s carats |
644 |
527 |
||
Average diamond sales price per carat |
US |
$ |
71 |
$ |
99 |
* at 100% interest in the Gahcho Kué Mine |
**See Non-IFRS Measures section of the Company’s March 31, 2019 MD&A for explanation and reconciliation |
***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) |
March 31, 2019 |
March 31, 2018 |
|
Sales |
$ |
60,696 |
66,565 |
Carats sold |
000’s carats |
644 |
527 |
Average price per carat sold |
$/carat |
94 |
126 |
Cost of sales per carat* |
$/carat |
78 |
80 |
Earnings from mine operations per carat |
$ |
16 |
46 |
Earnings from mine operations |
% |
17% |
37% |
Selling, general and administrative expenses |
$ |
2,899 |
3,589 |
Operating income |
$ |
3,639 |
20,105 |
Net income for the period |
$ |
2,497 |
67 |
Basic and diluted earnings per share |
$ |
0.01 |
0.00 |
* 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
Full details of the financial and operating results for the quarter ended March 31, 2019 are described in Mountain Province’s condensed consolidated interim financial statements with accompanying notes and related Management’s Discussion and Analysis. These documents and additional information on Mountain Province, including its annual information form and US Form 40-F, are available on the Company’s website at www.mountainprovince.com and on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.shtml. Shareholders may contact Mountain Province at 161 Bay Street, PO Box 216, Toronto, ON, M5J 2S1, to request, free of charge, hard copies of the audited consolidated financial statements and related Management’s Discussion and Analysis.
The Company will host an earnings conference call for analysts and investors on Thursday, May 9, 2019, at 11:00 a.m. Eastern Time. The conference call can be accessed using the following details. A replay of the call will also be available on the Company’s website.
Title: Mountain Province Diamonds Inc Q1 Earnings Conference Call
Conference ID: 7179307
Date of call: 05/09/2019
Time of call: 11:00 Eastern Time
Expected Duration: 60 minutes
Webcast Link: https://edge.media-server.com/m6/p/dtcvb9mr
Participant Toll-Free Dial-In Number:
(866) 300-0510
Participant International Dial-In Number:
(636) 812-6656
A replay of the webcast and audio call will be available on the Company’s website
Replay: |
|
Toll-Free Dial-In: |
(855) 859-2056 |
International Dial-In: |
(404) 537-3406 |
Passcode: |
7179307 |
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