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Mountain Province Bounces Back as Demand Jumps

Aug 5, 2021 6:10 AM   By Rapaport News
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Mountain Province’s profit soared in the second quarter as consumer demand for diamonds returned and the health situation improved.

The miner reported a profit of CAD 22.5 million ($18 million) for the three months ending June 30, compared with a loss of CAD 26.8 million ($21.4 million) during the same period last year, the company said Wednesday. The figure is also above 2019’s second-quarter profit of CAD 10.3 million ($7.7 million).

“The positive market environment which began at the start of the year continued through the second quarter,” the company noted. “The global economy began to recover as many countries started to lift Covid-19 restrictions. This positive trend is expected to continue through the second half of 2021 as consumer confidence and spending levels continue to recover. Reinforcing this expectation is the fact that the US and China continue to promote consumer spending as part of their post-Covid-19 recovery plans.”

The appreciation of the Canadian dollar against its US counterpart has also helped the company, providing CAD 5.2 million ($4.2 million) in foreign-exchange gains on payment of its debt. Mountain Province repays debts in US dollars but earns money in Canadian currency.

Revenue from the miner’s Gahcho Kué deposit in Canada more than doubled year on year to $52.6 million. The average selling price jumped to $73 per carat, compared with $33 per carat the year before, outweighing a 5% drop in sales volume to 719,000 carats. Production for the period rose 14% to 1.8 million carats.

Profit for the first six months of the year came to CAD 29.8 million ($23.8 million), versus a loss of CAD 67.7 million ($54.1 million) in the first half of 2020. Revenue increased 28% to $95.3 million, while the average price climbed 38% to $72 per carat.

“Gahcho Kué has rebounded well from a difficult start to the year, with production on track to meet our guidance,” said Mountain Province CEO Stuart Brown. “On the rough-diamond market front, we are seeing strong participation at our sales. This is helping to drive increases in diamond prices across the size spectrum. We expect this strong market environment to persist as the world continues [to] emerge from the effects of the Covid-19 pandemic and consumer spending at the retail level returns to pre-pandemic levels. Encouragingly, some advanced economies appear to be exceeding pre-pandemic levels.”

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