Mountain Province Profit Surges in Strong Market

RAPAPORT… Mountain Province Diamonds moved back into the black in 2021, as it benefited from the strong rough market and soaring prices for goods at its Gahcho Kué mine in Canada.

Profit for the full year came to CAD 276.2 million ($219.6 million) Mountain Province reported Tuesday. That compares to a loss of CAD 263.4 million ($209.4 million) in 2020. Sales for the year rose 31% to $237 million.

The miner incurred an impairment charge of CAD 240.6 million ($191.3 million) in 2020 during the height of the Covid-19 pandemic, when prices and demand for rough were low. However, the improvement in market sentiment and prices has raised the value of the company’s property, plant and equipment, it noted. Earnings from mine operations came to $31.7 million.

Total production — which included Mountain Province’s 49% share and De Beers’ 51% portion — fell 4% to 6.2 million carats.

Sales in the fourth quarter grew 6% year on year to $67.6 million, with the average price up 25% to $84 per carat. Profit for the three months came to CAD 237.6 million ($188.9 million), compared to a loss of CAD 189.2 million ($150.4 million) the year before.

Despite the positive results, Mountain Province has lowered its production outlook for Gahcho Kué for 2022 amid rising fuel costs and a now-resolved outbreak of Covid-19 at the site. The company expects to recover 6.2 million to 6.4 million carats for the full year, versus the 6.3 million to 6.7 million it announced in January.

Image: The Gahcho Kué mine. (Mountain Province)