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Mountain Province Loss Widens in 2020

Mar 29, 2021 5:22 AM   By Rapaport News
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RAPAPORT... Mountain Province Diamonds fell further into the red in 2020 as the pandemic continues to impact sales and operations at its Gahcho Kué mine in Canada.

The company, which owns 49% of the mine, with De Beers holding the rest, reported a loss of CAD 263.4 million ($208.9 million) for the year. Mountain Province noted a loss of CAD 128.8 million ($102.1 million) in 2019 and has yet to post a profit since Gahcho Kué launched in 2017, according to Rapaport records. Sales fell 18% to $171 million in 2020.

“2020 was a challenging year for the company and [the] Gahcho Kué Mine, with pandemic-related personnel shortages and an inability to trade in the rough markets due to global lockdowns driving our underperformance,” said Stuart Brown, CEO of Mountain Province.

Total production fell 4% to 6.5 million carats as travel restrictions limited access to the remote mining site in Canada’s Northwest Territories. New health and safety procedures also curbed operations.

Plans to make up for lost production suffered a setback when a new wave of infections forced the mine to close for three weeks in February. All workers and contractors at the site are now receiving vaccinations, the company noted. Mountain Province and De Beers Canada will publish a revised mine plan for 2021 in the second quarter, Brown added.

Sales in the fourth quarter grew 25% year on year to $61.7 million, with the average price up 2% to $65 per carat. The company’s loss widened by 63% to CAD 189.2 million ($150.1 million) during the three-month period. Mountain Province was confident the recent upsurge in rough demand would continue, with prices now at pre-Covid-19 levels, it noted.

Image: A hauling truck at the Gahcho Kué mine. (Mountain Province)
Tags: Canada, COVID-19, De Beers, diamonds, Gahcho Kue, Jewelry, mountain province, northwest territories, Rapaport News
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