PURCELL Dermot Desmond and Stuart Brown's Mountain Province Diamonds Inc. (MPVD) lost three cents to 43 cents on 37,000 shares. Mountain Province managed a five-cent gain on 146,000 shares Monday on word that it has wrapped up its first Antwerp-based tender of rough diamonds in seven months. The company sold 210,661 carats mined at its 49-per-cent-owned Gahcho Kue mine in Canada's North for $8.9-million (U.S.), averaging $42 (U.S.) per carat. The size of the tender was modest, as the company typically averages about 350,000 carats in each of the 10 sales it holds each year.
The average value is also disappointing compared with Mountain Province's average during 2018 and 2019, where sales ran about $74 (U.S.) per carat in 2018 and $63 (U.S.) per carat last year, but Mr. Brown president and chief executive officer, is quick to point out that the latest batch of gems did not contain any specials or high-value fancy gems. Those gems, although though not large in quantity at Gahcho Kue, can boost the average value achieved by a significant amount.
Indeed, Mr. Brown and his crew say that the latest sale price represented just a 1-per-cent discount to what had been achieved in the February sale for a similar mix of diamonds. Perhaps, but Mountain Province sold nearly 660,000 carats in its January and February sales, achieving an average price of $75 (U.S.) per carat, one of the best quarterly results in the past 18 months.
Mountain Province is also selling rough diamonds to Mr. Desmond's Dunebridge Worldwide Ltd. Dunebridge purchased $22.6-million (U.S.) of rough in the second quarter for just $33 (U.S.) per carat, but the company could get more when Dunebridge sells the gems later, if the market improves, under an equal sharing agreement that would see Dunebridge first get to deduct a substantial sum for its efforts. That agreement called for Dunebridge to buy up to $50-million (U.S.) worth of rough, and those sales have continued into the third quarter.
Mr. Brown was clearly pleased with the reopening of Mountain Province's traditional sales channel. He deemed the first auction in seven months to be an encouraging start, given that the market had been at a standstill since March. Nevertheless, Mountain Province still appears likely to complete its planned sales to Dunebridge to keep the cash coming in while the diamond markets "continue to gradually open for business."