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Mountain Province Projects 3Q Improvement

Jul 20, 2020 5:57 AM   By Rapaport News
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RAPAPORT... Mountain Province anticipates the market for rough diamonds will start to improve toward the end of the third quarter when retailers prepare for holiday sales.

“While prices in the post Covid-19 period remain under pressure, the demand for rough diamonds is gradually opening up, with demand for certain categories being demonstrated,” CEO Stuart Brown said last week.

Covid-19 issues related to travel, self-imposed trading bans, and limited retail trading are expected in the short term, he noted, adding that the market was likely to pick up later in the third quarter, strengthening with the start of the major retail season toward the end of the year and into 2021. “We aim to resume our traditional sales methods in September,” Brown continued.

Full production at the Gahcho Kué mine in Canada dropped 11% year on year to 1.5 million carats in the second quarter. The company owns a 49% stake in the mine, with De Beers holding the rest. The companies have been forced to limit personnel at the operation due to coronavirus restrictions. 

The company sold a total of 757,360 carats of mostly smaller, lower-value rough during the quarter, for $25 million, or an average price of $33 per carat. Some $22.6 million was attributed to an agreement with shareholder Dunebridge Worldwide, which allows the miner to sell at current market prices and receive a share of the profit when Dunebridge resells the stones. Mountain Province sold an additional $2.4 million privately.

The miner plans to continue operating at a reduced capacity until “there is a solution to the [coronavirus] crisis,” it noted. Therefore, the company reduced Gahcho Kué’s guidance for the year to 6.3 million carats to 6.4 million carats, compared with the 6.75 million carats to 6.95 million carats it had originally forecast.

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