Purcel on the Covid situationAccording to his calculations we will lose 130,000 caats per week of non production which transalates into appr. a loss of 13, 000,000 in revenue but will still incur most of the expenses. Not a good situation.
The diamond and specialty minerals stocks box score on Tuesday was a positive 111-93-96 as the TSX Venture Exchange fell six points to 1,071. Dermot Desmond and Stuart Brown's Mountain Province Diamonds Inc. (MPVD) gained two cents to 64 cents on 162,000 shares.
Poor Mountain Province just cannot catch a break. The company and its majority co-venturer, De Beers Canada, are having to contend with an outbreak of COVID-19 at their Gahcho Kue mine, 250 kilometres northeast of Yellowknife, just as prices and demand for rough diamonds were improving. All it takes for the Northwest Territories government to declare an outbreak is for a single probable case to appear in a remote camp, but Gahcho Kue is well beyond that limited threshold, with two confirmed and six presumptive cases, says Mr. Brown, president and chief executive officer.
As a result, production-related work has been halted, with only essentials such as water management, power generation, food services and healthcare activities continuing. Mr. Brown says that it is unknown how long production will be halted, but if all goes well and infections do not spread further, the currently positive employees could be deemed recovered in a few weeks.
Mountain Province has not yet set its 2021 guidance, but Gahcho Kue managed to produce 6.5 million carats of diamonds last year despite the added burdens imposed by the COVID crisis. (The mine managed just 6.8 million carats in 2019, a pre-COVID year in which most everything had gone according to plan.) Those numbers suggest that a production delay would cost Gahcho Kue about 130,000 carats per week without a reduction in most of the operating costs needed to sustain the mine.