Mountain Province production up 28% in 4Q
Mountain Province Diamonds announces production and sales results for the fourth quarter (4Q) ended December 31, 2019 from the Gahcho Kué Diamond Mine (GK Mine). The Company also releases the details for its Q4 2019 earnings conference call and webcast. All figures are expressed in Canadian dollars unless otherwise noted.
According to the Q4 and FY 2019 details, 11,089,408 total tonnes mined during the quarter, a 2% decrease on comparable period (Q4 2018: 11,365,990). 43,224,827 total tonnes mined during FY 2019, a 4% increase from comparable period (FY 2018: 41,444,057).
890,886 ore tonnes mined during the quarter, a 33% increase on comparable period (Q4 2018: 670,707). 3,247,324 ore tonnes mined during FY 2019, a 12% increase from comparable period (FY 2018: 2,908,184).
936,903 ore tonnes treated during the quarter, a 25% increase on comparable period (Q4 2018: 751,448). 3,580,551 ore tonnes treated during FY 2019, a 12% increase from comparable period (FY 2018: 3,194,360).
1,977,438 carats recovered during the quarter at an average grade of 2.11 carats per tonne, 28% higher than comparable quarter (Q4 2018: 1,545,786 carats at 2.06). 6,820,631 carats recovered during FY 2019 at an average grade of 1.90 carats per tonne, 2% slightly lower than comparable period (FY 2018: 6,936,894).
At Q4 and FY 2019 Diamond Sales front the announced details says, in Q4 2019, 771,799 carats were sold at an average value of $84 per carat (US$64 per carat) for total proceeds of $65.0 million (US$49.2 million) in comparison to 822,548 carats sold at an average value of $86 per carat (US$65 per carat) for total proceeds of $70.5 million (US$53.6 million) in Q4 2018.
During FY 2019, 3,284,520 carats were sold at an average value of $84 per carat (US$63 per carat) for total proceeds of $276.3 million (US$208.2 million) in comparison to 3,252,491 carats sold at an average value of $96 per carat (US$74 per carat) for total proceeds of $311 million (US$240 million) in FY 2018.
Sentiment in the rough diamond market became slightly more optimistic towards the end of 2019 and has remained relatively positive as the market prepares for the first selling cycle of 2020.
The Company's medium to long term outlook for rough diamonds, remains positive. The major producers reported lower levels of sales through 2019 which, together with the stronger retail selling season, will help normalise inventory levels in the cutting centers.
In addition, anticipated mine closures over the next 12-18 months will help to establish a more balanced supply and demand equilibrium in the diamond market. Importantly, consumer confidence and spending remain strong, particularly in the US and Greater China which together account for approximately 65% by value of global retail sales of diamond jewelry.
Q4 and FY 2019 Summary:
Q4 and FY 2019 production results were better than the Company's expectations, with recovered carats for FY 2019 coming in higher than the revised guidance of 6.7 – 6.8 million carats, attributable to the strong operational performance in Q4 2019.
The plant treated 936,903 tonnes and recovered 1.98 million carats in Q4 2019, 25% and 28% higher than was achieved in Q4 2018 respectively. During FY 2019, the plant treated a record 3.58 million tonnes of ore, 12% higher than was achieved in FY 2018, demonstrating that the plant modifications of the past 12 months have been successful and the plant throughput capacity has significantly increased.
Stuart Brown, the Company's President and Chief Executive Officer, commented: “Mountain Province enjoyed an exceptional year of production in FY 2019, achieving all its operational metrics. The highlight being exceeding plant throughput by 12%, compared to FY 2018 the improvements were a direct result of the plant modifications over the past 12 months. The effort and hard work by everyone involved in this project is to be commended.
The diamond market however was somewhat difficult in 2019 with prices declining further in some categories. Nonetheless positive signs started to surface late in 2019 and strengthening early in 2020. Retailers across all sectors of the luxury market have been reporting stronger than expected holiday season sales with very strong growth in online sales also boosting diamond retail sales.
Following the successful plant changes which have created more capacity and opportunity, I believe Mountain Province is well positioned for the next decade. Gahcho Kué has a long mine life, and as demonstrated in 2019 with the discovery of the Wilson Kimberlite a strong potential for additional discoveries in our highly prospective land package. I look forward to keeping all our stakeholders updated throughout 2020.”
