Jump in Rough Demand Supports Mountain Province Revenue

Sales at Mountain Province rose in the third quarter, as the miner sold more rough than a year earlier and saw “largely stable” prices for its goods.

Revenue climbed 15% year on year to $50.8 million for the three months that ended September 30, the company reported last week. Sales volume from its Gahcho Kué mine in Canada jumped 42% to 679,599 carats, outweighing a 19% drop in the average price to $75 per carat.

However, prices at the company’s two tenders remained relatively consistent, it reported.

“The rough-diamond market during the third quarter was unsettled by continued price decreases announced by leading polished-diamond price indices,” explained Reid Mackie, Mountain Province’s vice president of diamond sales and marketing. “This was compounded by reports of delayed polished-buying by downstream retailers and precipitated sales of polished stock by the industry midstream. Many rough producers addressed this by canceling or delaying their rough-diamond sales during the third quarter. For Mountain Province, which held its usual two scheduled sales during the quarter, prices achieved were largely stable.”

Production from Gahcho Kué — of which the company owns 49%, with De Beers holding the remaining 51% — slipped 10% to 1.2 million carats. Mountain Province’s portion came to 582,077 carats.

The company recovered fewer carats than usual per metric ton, a change it had anticipated due to the lower-grade ore it was processing from the deposit’s Tuzo region. In addition, unexpectedly high rainfall made it difficult to reach the lower portions of the site’s high-grade Hearne section, the miner said.

Despite the drop in output, the company has maintained its production forecast for the full year and believes it will deliver in the middle to upper range of its 4.2 million- to 4.7 million-carat outlook.

Image: Haul trucks with ore at the Gahcho Kué mine. (Mountain Province)