news
Mountain Province loses $40.96-million in Q1
2020-05-06 14:30 PT - News Release
Mr. Stuart Brown reports
MOUNTAIN PROVINCE DIAMONDS ANNOUNCES FIRST QUARTER 2020 RESULTS
Mountain Province Diamonds Inc. has released its financial and operating results for the quarter ended March 31, 2020 (Q1). All figures are expressed in Canadian dollars unless otherwise noted.
Operational Highlights for First Quarter 2020
- -- 903,000 tonnes treated, a 4% increase on comparable quarter (Q1 2019: 871,000 tonnes).
- -- 1,655,000 carats recovered at an average grade of 1.83 carats per tonne, slightly higher than the same period last year (Q1 2019: 1,585,000 carats and 1.82 carats per tonne).
- -- 9,357,000 total tonnes mined, a 2% decrease on comparable period (Q1 2019: 9,528,000).
Financial Highlights for First Quarter 2020
- -- Revenue from 659,000 carats sold at $65.4 million (US$49.2 million) compared to $60.7 million from 644,000 carats sold in Q1 2019 (US$45.8 million) at an average realised value of $99 per carat (US$75) 2019: $94 per carat, (US$71).
- -- Adjusted EBITDA1 of $22.8 million compared to $19.7 million in Q1 2019, mainly due to the rough diamond market improving prior to the COVID-19 pandemic and the sale of a different mix of goods in Q1 2020 compared to Q1 2019.
- -- Earnings from mine operations $13.6 million compared to $10.2 million in Q1 2019.
- -- Cash costs of production, including capitalized stripping costs1 of $84 per tonne treated (2019: $111 per tonne) and $46 per carat recovered (2019: $61 per carat). The cost improvements in Q1 2020 compared to the same period last year are mainly attributable to volumes of ore treated and stockpile management, lower fuel charges and lower maintenance costs.
- -- Net loss at March 31, 2020 was $41.0 million or $0.19 loss per share (2019: net income $2.5 million or $0.01 earnings per share). Included in the determination of net loss at March 31, 2020 are unrealized foreign exchange losses of $30.8 million, on the translation of the Company's USD-denominated long-term debt. The unrealized foreign exchange losses are a result of the weakening of the Canadian dollar versus US dollar.
- -- Capital expenditure in the first quarter of 2020 was $5.3 million, $1.7 million of which was waste stripping and the remaining $3.6 million was sustaining capital related to mine operations.
- -- Cash position of $31.9 million (December 31, 2019: $34.8 million) and net working capital of $103.3 million (December 31, 2019: $99.4 million). The winter road season was successful with all required spares and consumables delivered to site.
1Cash costs of production, including capitalized stripping costs, and Adjusted EBITDA are non-IFRS measures with no standardized meaning prescribed under IFRS. See the Non-IFRS Measures section of the Company's March 31, 2020 MD&A for explanation and reconciliation.
Market Highlights for First Quarter 2020
In Q1 2020, 659,000 carats were sold at an average value of $99 per carat (US$75 per carat) for total proceeds of $65.4 million (US$49.2 million) in comparison to 644,000 carats sold at an average value of $94 per carat (US$71 per carat) for total proceeds of $60.7 million (US$45.8 million) in Q1 2019.
Stuart Brown, the Company's President and Chief Executive Officer, commented:
"2020 started positively with production figures in line with our expectations and slightly ahead of the equivalent period last year. Our sales for Q1 2020 were also modestly ahead of expectations with higher values per carat realized in some categories. The rapid spread of the COVID-19 pandemic toward the end of the quarter impacted our ability to operate normally and required significant changes to our procedures which has had an impact on our production capabilities. We are in the final stages of completing our full year 2020 production outlook and will be providing new guidance in June."
"With respect to the market for rough diamonds, like all producers, we are awaiting more clarity on the easing of restrictions around the globe, especially in Belgium, Dubai and India before finalising and committing to a formal sale later in the second quarter. We note that in Europe, an easing of restrictions has commenced, and India is starting a gradual re-opening of some businesses. We have also received enquiries from our customers about when we will restart formal sales which is positive."
"We are in advanced discussions with our lenders and the federal government and all interested parties as we explore all options to either amend existing credit facilities in place or potentially secure new facilities for ongoing operational expenses. We will provide an update to the market as soon as we have clarity on these. The Company has also enrolled in all eligible programs offered by both the federal and provincial governments in response to the COVID-19 pandemic where applicable."
"Through these difficult times we are very grateful for all of the support from our stakeholders, which include our bankers, Scotiabank and Nedbank, and our joint venture partner De Beers Canada Inc."
Gahcho Kue Mine Operations
The following table summarizes key operating statistics for the Gahcho Kue Mine in the three months ended March 31, 2020 and 2019.
Three months ended Three months ended March 31, 2020 March 31, 2019 GK operating data Mining *Ore tonnes mined (kilo tonnes) 1,030 605 *Waste tonnes mined (kilo tonnes) 8,327 8,923 *Total tonnes mined (kilo tonnes) 9,357 9,528 *Ore in stockpile (kilo tonnes) 355 295 Processing *Ore tonnes processed (kilo tonnes) 903 871 *Average plant throughput (tonnes per day) 9,505 9,467 *Average diamond recovery (carats per tonne) 1.83 1.82 *Diamonds recovered (thousand carats) 1,655 1,585 Approximate diamonds recovered -- Mountain Province (thousand carats) 811 777 Cash costs of production per tonne of ore, net of capitalized stripping** ($) 80 94 Cash costs of production per tonne of ore, including capitalized stripping** ($) 84 111 Cash costs of production per carat recovered, net of capitalized stripping** ($) 43 52 Cash costs of production per carat recovered, including capitalized stripping** ($) 46 61 Sales Approximate diamonds sold -- Mountain Province*** (thousdand carats) 659 644 Average diamond sales price per carat (U.S. $) 75 71
* at 100% interest in the Gahcho Kue Mine
** See Non-IFRS Measures section of the Company's March 31, 2020 MD&A for explanation and reconciliation
***Includes the sales directly to De Beers for fancies and specials acquired by De Beers through the production split bidding process
Financial Performance (in thousands of Canadian dollars, except where otherwise noted) Three months ended Three months ended March 31, 2020 March 31, 2019 Sales $ 65,430 $ 60,696 Carats sold (thousand carats) 659 644 Average price per carat sold ($/carat) 99 94 Cost of sales per carat* ($/carat) 79 78 Earnings from mine operations per carat ($) 21 16 Earnings from mine operations (%) 21% 17% Selling, general and administrative expenses 3,637 2,899 Operating income 7,502 3,639 Net (loss) income for the period (40,969) 2,497 Basic and diluted (loss) earnings per share ($) (0.19) 0.01
* This cost of sales per carat includes the cost of acquiring 51% of the fancies and specials which have been sold, after having been won in a tendering process with De Beers Canada.
Conference Call
Full details of the financial and operating results for the quarter ended March 31, 2020 are described in Mountain Province's condensed consolidated interim financial statements with accompanying notes and related Management's Discussion and Analysis. These documents and additional information on Mountain Province, including its' annual information form and US Form 40-F, are available on the Company's website at www.mountainprovince.com and on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.shtml. Shareholders may contact Mountain Province at 161 Bay Street, PO Box 216, Toronto, ON, M5J 2S1, to request, free of charge, hard copies of the audited consolidated financial statements and related Management's Discussion and Analysis.
The Company will host an earnings conference call for analysts and investors on Thursday, May 7, 2020, at 11:00 a.m. Eastern Time. The conference call can be accessed using the following details. A replay of the call will also be available on the Company's website.
Title: Mountain Province Diamonds Inc Q1 2020 Earnings Conference Call
Conference ID: 44590867
Date of call: 05/07/2020
Time of call: 11:00 Eastern Time
Expected Duration: 60 minutes
Webcast: https://produceredition.webcasts.com/starthere.jsp?ei=1313234&tp_key=608e69878a
Participant Toll-Free Dial-In Number: (+1) 888 390 0546
Participant International Dial-In Number:(+1) 416 764 8688
A replay of the webcast and audio call will be available on the Company's website.
About the Company
Mountain Province Diamonds is a 49% participant with De Beers Canada Inc. in the Gahcho Kue diamond mine located in Canada's Northwest Territories. The Gahcho Kue Joint Venture property consists of several kimberlites that are actively being mined, developed, and explored for future development. The Company also controls 67,164 hectares of highly prospective mineral claims and leases immediately adjacent to the Gahcho Kue Joint Venture property that include an indicated mineral resource at the Kelvin kimberlite and inferred mineral resources for the Faraday kimberlites.
Qualified Person
The disclosure in this news release of scientific and technical information regarding Mountain Province's mineral properties has been reviewed and approved by Keyvan Salehi, P.Eng., MBA, and Tom E. McCandless, Ph.D., P.Geo., both Qualified Persons as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects.
We seek Safe Harbor.