Weak Market Sends Mountain Province into Red

Mountain Province reported a loss in the third quarter as it was unable to offload a large portion of its inventory, and diamond prices remained weak.

The company had a net loss of CAD 13.4 million ($9.8 million) for the three months ending September 30, compared with a loss of CAD 7.2 million ($5.3 million) a year earlier, it said last week. The decline resulted from Mountain Province’s need to retain a large portion of its inventory to sell later. This was because of the Indian manufacturing sector’s two-month pause on buying rough, as well as the desire to avoid selling while prices are so weak, the company explained. However, the company did sell a portion of its goods directly to De Beers, its joint-venture partner, which owns 51% of the Gahcho Kué mine in Canada.

“For most of 2023, the diamond market has been under pressure as a result of various factors,” said Mountain Province CEO Mark Wall. “In the third quarter, the market deteriorated further. The major diamond producers have reacted by significantly cutting their sales and the India diamond industry announced a two-month import moratorium to run from October 15 to December 15. For our part, the company took the decision to withhold some of our lower-value goods during the third quarter. We have also agreed with De Beers to pause all discretionary spend and reduce costs wherever prudent. We continue to monitor the market closely.”

Earnings from mine operations slid 94% to CAD 2.7 million ($2 million) as revenue dropped 46% year on year to $45.3 million. Sales volume slipped 41% to 478,653 carats, while the average price fell 9% to $95 per carat. Production at the deposit decreased 9% to 1.3 million carats.

Profit for the first nine months of the year fell 19% to CAD 32.1 million ($23.4 million), while revenue dipped 18% to $184.9 million. Sales volume slipped 5% to 1.8 million carats, with the average price dropping 13% to $103 per carat.