from stockwatch 2022-11-10 17:47 ET - Market Summary
by Will Purcell
The diamond and specialty minerals stocks box score on Thursday was an enthusiastic 128-59-123 as the TSX Venture Exchange rose 17 points to 594 while polished diamond prices fell 0.2 per cent.
Dermot Desmond and Mark Wall's Mountain Province Diamonds Inc. (MPVD) said earlier this week that its third quarter revenue of $110.1-million was its highest in history and a 12-per-cent increase over what it earned in the previous quarter. The $97.8-million the company earned in that second quarter had been its second-best revenue quarter -- and is now its third best -- since mining began at Gahcho Kue in the fall of 2016.
On the other hand, Mountain Province had cheered its second quarter earnings before interest taxes, depreciation and amortization (EBITDA) -- $55.1-million -- as "record quarterly adjusted" performance, but its latest quarter's EBITDA of $54.1-million has been downgraded to "robust." Also downgraded is Mountain Province's bottom line: The company had earned $22.6-million in the second quarter but recorded a $7.2-million loss in the latest three-month period.
Not to worry: The company says the latest quarter included an unrealized foreign exchange loss of $26.3-million that resulted from the translation of the company's debt, denominated in U.S. dollars, into Canadian currency. When the Canadian dollar slides, the debt grows. That was also the case in the second quarter, although the unrealized loss was just $11.7-million.
Never mind that although revenue was up, operating costs were up more, nibbling away at the fringes of everything but the company's enthusiasm. "The third quarter was incredibly positive for the company on many levels," gushed Mr. Wall, president and chief executive officer, although the only levels to which he pointed were the company's recent refinancing and the performance of the miners at Gahcho Kue.
Mountain Province's stock staged a healthy recovery from the 45 cents at which it traded in mid-July, amid growing refinancing worries, getting to 79 cents late last month on word of the refinancing and an early peek at the third quarter operational performance of the mine. Unfortunately, investors are shrugging off any enthusiasm for the record revenue. Mountain Province lost three cents on the news yesterday but added two back today, closing at 68 cents on 362,000 shares.