Weak Demand Drives Down Mountain Province Revenue

Mountain Province’s sales fell in the second quarter as prices for its rough dropped amid weak demand and a protracted slowdown in the market. 

Sales slid 5% year on year to CAD 56.8 million ($41.5 million) for the period that ended June 30, the Canada-based miner said last week. The decline came as a 39% dip in the average price to CAD 102 ($74) per carat outweighed a 55% rise in sales volume to 557,361 carats. 

“The diamond market continues to be softer than anticipated,” said Mountain Province CEO Mark Wall. “At a macro level, the return of demand in China has not materialized so far, and the market is now expecting a more protracted U-shaped recovery in diamond demand.” 

Output for the three months from April to June slipped 2% to 1.3 million carats, with the company processing lower-grade ore from the Gahcho Kué mine. A 29% increase in the total ore tonnes processed partly balanced the 24% decrease in grade. Mountain Province’s 49% share of production was 646,153 carats. De Beers owns the remaining 51% of the joint venture. 

“The good performance of the [processing] plant was offset by a lower grade in the quarter,” Wall explained. “Lower grade had been expected as per the mine plan…however…we have also seen a lower-than-expected grade at the deep portions of the pits continue through the quarter. The team has been working on identifying and isolating the small area of grade underperformance and…this will improve as we move through the year.” 

Mountain Province will report its full second-quarter results on August 7.  

Image: A truck hauling ore at the Gahcho Kué mine. (Mountain Province)