from stockwatch 2024-05-09 14:25 ET - Market Summary
by Will Purcell
The diamond and specialty minerals stocks box score on Thursday was an upbeat 93-73-144 as the TSX Venture Exchange added five points to 595. Dermot Desmond and Mark Wall's Mountain Province Diamonds Inc. (MPVD), which had edged higher from an all-time low of 16 cents last week, getting as high as 22.5 cents on Monday, fell 1.5 cents to 20 cents on 214,000 shares Wednesday. The drop came in anticipation of the company's first quarter report, which arrived after the close. The jitters were unwarranted, as Mountain Province's stock regained two cents to 21.5 cents on 177,000 shares today on the news.
The news was that Mountain Province's 49-per-cent-owned Gahcho Kue mine in the Northwest Territories generated enough revenue to provide a modest $6.8-million first quarter profit. Mountain Province sold 938,000 carats at an average of $70 (U.S.) per carat in the period, down from the 961,000 carats it sold a year earlier when its diamonds fetched $99 (U.S.) per carat. (In the first quarter of 2022, when rough diamond prices were hitting an all-time high, Mountain Province's gems sold for $132 (U.S.) per carat.)
Mr. Wall, president and chief executive officer, conceded that the rough diamond market was softer than a year ago, but he cheered that Mountain Province "continued to show sustained profitability at current prices." He said that the earnings before interest, taxes, depreciation and amortization stood at $50-million, a not-so-discouraging drop from the $68-million the company recorded a year ago.
That could be the end of the good cheer for 2024, as Mountain Province and its majority co-venturer, De Beers Canada, have been expecting a significant drop in diamond production this year as Gahcho Kue shuffles its production pits and moves underground. There has been better news on that score of late, as the mine revises its plan to smooth out production. (As bad as 2024 had initially been projected to be, 2025 and 2026 were predicted to be banner years.)
The revision should be known before the end of June. Mr. Wall says that he and his crew look forward to sharing the plan, work that should "bring to light some net-positive pit design changes" that they believe should bring incremental carats into the forecast. (By tweaking the shape of the pits, the miners should be able to reach kimberlite extensions and fingers running off from the main pipes.)