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Currency Decline Hits Mountain Province
Aug 12, 2018 8:40 AM
By Rapaport News
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RAPAPORT... Mountain Province recorded a net loss in the second quarter
as the weaker Canadian dollar inflated its debt levels.
The loss amounted to $4.8 million (CAD 6.3 million) for the
three months ending June 30, compared with a $5.8 million (CAD 7.6 million) profit
a year ago, it said last week. The depreciation of the Canadian currency against
the US dollar since late 2017 has had a detrimental impact on the profit
figures it reports, as its debts are in US dollars, while its income statements
are in the local coinage, it explained. The company’s share price fell 4%
Thursday after it released its results.
The loss was despite higher sales, with revenue from the Gahcho
Kué mine more than tripling to $75.4 million (CAD 99.1 million) from $21.1
million (CAD 27.6 million) last year. Mountain
Province began diamond recovery at the mine in late 2016, and reached
commercial production in March 2017. It began recording revenue in the second
quarter of 2017.
The miner sold 1.2 million carats at three tenders during the
second quarter of this year, all in Antwerp, at an average price of $86 per carat.
The company also paid shareholders its first dividend of
$0.03 (CAD 0.04) per share, noting positive performance at the asset, which is
located in Canada’s Northwest Territories.
The company will hold two tenders in the third quarter and
three in the fourth quarter. It expects to achieve production, on a 100% basis — which includes De Beers’s share of production — at the higher end
of its forecast of 6.3 million to 6.6 million carats for the year, it said.
Mountain Province owns 49% of the Gahcho Kué mine, with De
Beers holding the remaining 51%.
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Tags:
De Beers, Gahcho Kué, mountain province, Rapaport News
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