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Strong US Dollar Pushes Mountain Province to Loss

May 7, 2020 9:38 AM   By Rapaport News
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RAPAPORT... Mountain Province reported a loss in the first quarter as the stronger US dollar led to an increase in the miner’s debts.

The company posted a net loss of CAD 41 million ($29.1 million), compared with a profit of CAD 2.5 million ($1.8 million) in the same period of 2019. The appreciation of the US currency against its Canadian counterpart had a negative impact of CAD 30.8 million ($21.9 million) on this amount, as Mountain Province repays debts in US dollars despite earning money in the Canadian currency.

Revenue from the miner’s Gahcho Kué deposit in Canada rose 7% to $49.2 million for the three months ending March 31, as sales of rough grew 2.4% to 659,318 carats. The average selling price rose 6% to $75 per carat, as the company sold a higher-quality mix of products than in the previous year, it said.

In total, the mine produced 1.7 million carats, up 4.4% compared with the previous year. This gave Mountain Province access to 811,009 carats, as it owns 49% of the site, while De Beers holds the remaining 51%.

The COVID-19 pandemic hit Mountain Province’s output toward the end of the quarter, it said. The company withdrew its forecast for 2020 due to the uncertainty.

“The rapid spread of the COVID-19 pandemic toward the end of the quarter impacted our ability to operate normally, and required significant changes to our procedures, which has had an impact on our production capabilities,” said Mountain Province CEO Stuart Brown.

The company is waiting to find out when the Belgian and Indian markets will reopen before issuing its new sale schedule, but noted that it had already received enquiries from customers regarding sale dates.

Mountain Province plans to issue updated guidance for the year in June.

Image: The Gahcho Kué mine. (Mountain Province)
Tags: COVID-19, De Beers, Gahcho Kué, mountain province, Rapaport News, stuart brown
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