streetwire from stockwatch Dermot Desmond and Patrick Evans's Mountain Province Diamonds Inc. (MPV) fell 58 cents to $5.88 on 4.67 million shares. The company and its co-venturer, De Beers Canada, have completed commissioning at their Gahcho Kue mine, 250 kilometres northeast of Yellowknife. (Mountain Province holds a 49-per-cent interest in the project.) This is ahead of schedule according to Mr. Evans, president and chief executive officer of Mountain Province, who says that Gahcho Kue remains on track to achieve commercial production during the first quarter of 2017.
Mr. Evans says that the Gahcho Kue processing plant has been recovering diamonds since the end of June and the partners have already recovered two special gems. One weighed 12.1 carats, the other 24.65 carats, and while the diamonds are unlikely to turn shareholders of Lucara Diamond Corp. (LUC: $4.18) green with envy, the stones were worthy of appearance on Mountain Province's website. Recovering diamonds of that size and perhaps larger, but with nearly flawless colour and clarity, will be key to Gahcho Kue producing the average diamond prices that Mr. Evans has suggested are possible. (The modelled value was $118 (U.S.) per carat at last report, but Mr. Evans and Mountain Province have mused about achieving a value topping $170 (U.S.) per carat -- assuming that the top-quality gems appear in the same proportions as they did during the bulk sampling at Gahcho Kue.)
Mr. Evans says that Mountain Province should get its first parcel of diamonds from Gahcho Kue this summer. The company has retained the marketing rights to its share of the diamonds and the first split of the ramp-up production is expected to take place in about six weeks. More will follow and Mr. Evans says that Mountain Province plans to hold its first sale of Gahcho Kue gems before the end of the year.
Gahcho Kue hosts a reserve of 35.4 million tonnes averaging 1.57 carats per tonne and the mine is expected to run at a rate of nearly three million tonnes per year for 12 years, producing about 4.5 million carats per year. That is enough for Mr. Evans to tout Gahcho Kue as the "world's largest new diamond mine," perhaps oblivious -- but most likely not -- to the fact that each of the world's new diamond mines will be its largest new mine until the next new mine comes along.
Gahcho Kue's diamonds will come from three main pipes: 5034, Hearne and Tuzo, with Tuzo having the potential to add millions of carats and several years more to the life of the mine. As well, Mr. Evans has been reminding investors that there is a fourth pipe at Gahcho Kue. The Tesla kimberlite was small and it had a modest grade of just 0.4 carat per tonne, but its diamonds were potentially the most valuable of all the Gahcho Kue pipes. It is unclear if De Beers and Mountain Province are contemplating more work at Tesla, but there is no rush, especially if they plan to mine the Tuzo Deeps first.