Mountain Province’s diamond output up despite virus disruptions

Gahcho Kué, co-owned by Mountain Province Diamonds and De Beers Canada, is located at Kennady Lake, about 280 km northeast of Yellowknife. (Image courtesy of De Beers Canada.)

Canada’s Mountain Province Diamonds (TSX: MPVD), which holds a 49% stake in the remote Gahcho Kué mine, saw production at the operation jump by 30% during the third quarter from the previous three months as crews adjust to covid-19 protocols.

The company churned out a total of 9.88 million tonnes of ore and waste material in the three months to September 30, compared to the 6.84 million tonnes mined during the second quarter of the year.

The figure, however, is about 16% lower than the 11.7 million tonnes the Northwest Territories diamond mine produced in the same period last year.

Gahcho Kué produced 1.79 million carats during the third quarter of 2020, a 17% increase over the 1.53 million carats in Q3 2019

“We are pleased with the latest quarterly production figures considering the impacts of covid-19 on operations over the past few months,” President and CEO Stuart Brown said in a statement.

“We have dramatically improved our mining operations from the previous quarter (Q2 2020) (…) and we expect this trend to continue into the next quarter.”

Total carats and grades were also higher in Q3, primarily as a result of mining from the 5,034 pit where grades are higher than other parts of the ore body, Brown noted.

A total of 821,049 tonnes of ore averaging 2.19 carats of diamonds per metric tonnes were processed during the third quarter, compared to 890,325 tonnes at 1.72 c/t diamonds during the third quarter of 2019.

That resulted in Gahcho Kué producing 1.79 million carats of diamonds during the third quarter of 2020, a 17% increase over the 1.53 million carats in Q3 2019.

Mountain Province resumed diamond sales from the mine in September, fetching $89 million from its first commercial event since before the onset of the covid-19 pandemic.

“Overall, things are starting to trend in the right direction for the company considering the ongoing challenges of covid-19,” Brown said.

Gahcho Kué, which opened in late 2016, is 51% owned by De Beers, the world’s largest diamond producer by value.

Uneven recovery

The International Monetary Fund warned this week the world economy faces an uneven recovery until the virus is tamed. Chinese consumers are starting to spend again, while in Europe, the luxury sector is back near pre-pandemic levels despite a surge in covid-19 cases.

De Beers latest sale seemed to indicate conditions in the diamond market are looking up. The Anglo American unit sold about $467 million of rough diamonds in its eighth sales cycle of 2020. That compares to $334 million it fetched in the seventh cycle and the $297 million it sold in the same cycle last year.

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