Mountain Province Diamonds Announces Third Quarter and Nine Months Ended September 30, 2020 Results

Mountain Province Diamonds Announces Third Quarter and Nine Months Ended September 30, 2020 Results

PR Newswire

TORONTO and NEW YORK, Nov. 4, 2020

TSX and OTCQX: MPVD

TORONTO and NEW YORK, Nov. 4, 2020 /PRNewswire/ -- Mountain Province Diamonds Inc. ("Mountain Province", or the "Company") (TSX: MPVD) (OTCQX: MPVD) today announces its financial and operating results for the third quarter ("Q3 2020") and nine months ended September 30, 2020. All figures are expressed in Canadian dollars unless otherwise noted.

Operational Highlights for Third Quarter 2020 ("Q3 2020")

Financial Highlights for Third Quarter 2020 ("Q3 2020")

1Cash costs of production, including capitalized stripping costs, and Adjusted EBITDA are non-IFRS measures with no standardized meaning prescribed under IFRS.  See the Non-IFRS Measures section of the Company's September 30, 2020 MD&A for explanation and reconciliation.

Operational Highlights for the nine months ended September 30, 2020

Financial Highlights for the nine months ended September 30, 2020

2Cash costs of production, including capitalized stripping costs, and Adjusted EBITDA are non-IFRS measures with no standardized meaning prescribed under IFRS.  See the Non-IFRS Measures section of the Company's September 30, 2020 MD&A for explanation and reconciliation.

Market Highlights

During the most recent quarter, the Company re-started its traditional sales process in Antwerp, the results of which were communicated in the press release of September 21, 2020.

In Q3 2020, the Company sold 956,000 carats at an average realized value of $50 per carat (US$37) for total proceeds of $47.3 million (US$35.3 million), which comprised of sales to Dunebridge Worldwide Ltd and the Company's first traditional sale since the start of the COVID-19 pandemic.

Year to date and as of September 30, 2020, the Company generated revenue of $146.8 million (US$109.5 million) at an average realised value of $62 per carat (US$46) compared to $211.3 million in 2019 (US$159.1 million) at an average realized value of $84 per carat (US$63). It is important to note that the sales data since the start of the pandemic do not include the sale of any fancies and special diamonds.

Stuart Brown, the Company's President and Chief Executive Officer, commented: 

"After a sustained period of negative news with respect to the diamond industry and dealing with the impact of the COVID-19 pandemic, we are pleased to see that the market for rough diamonds is starting to show some positive momentum.  In the third quarter we have seen prices recovering close to pre-COVID levels from the lows seen during the peak of the pandemic."

"Although demand for rough diamonds is not yet back to pre-COVID-19 levels, the low amount of supply coming into the market has helped raise industry confidence levels which has been a driving factor impacting demand and rough prices during the quarter."

"From an operational perspective, there is no doubt it has been a difficult year so far; we have had to implement numerous new procedures to mitigate the challenges posed by COVID-19. The mine operations team has adapted to the new protocols on site and production output has stabilized. COVID-19 guidelines and protocols at the mine will be in place for the foreseeable future until the situation with the virus has been resolved."

"With the successful implementation of mitigating actions at site, the start of the recovery in diamond pricing and the finalisation and extension of the short-term funding facility, we have a cautious level of confidence as we enter the final quarter of the year."

Gahcho Kué Mine Operations

The following table summarizes key operating statistics for the Gahcho Kué Mine in the three and nine months ended September 30, 2020 and 2019.  









Three months ended

Three months ended

Nine months ended

Nine months ended



September 30, 2020

September 30, 2019

September 30, 2020

September 30, 2019







GK operating data






Mining






*Ore tonnes mined

 kilo tonnes

890

1,004

2,447

2,356

*Waste tonnes mined

 kilo tonnes

8,991

10,738

23,627

29,779

*Total tonnes mined

 kilo tonnes

9,881

11,742

26,074

32,135

*Ore in stockpile

 kilo tonnes

165

274

165

274







Processing






*Ore tonnes processed

 kilo tonnes

821

891

2,510

2,644

*Average plant throughput

 tonnes per day

8,924

9,900

9,061

9,721

*Average plant grade

 carats per tonne

2.19

1.71

1.99

1.83

*Diamonds recovered

 000's carats

1,795

1,528

4,997

4,843

Approximate diamonds recovered - Mountain Province

000's carats

880

749

2,449

2,373

Cash costs of production per tonne of ore, net of capitalized stripping **

$

73

86

86

89

Cash costs of production per tonne of ore, including capitalized stripping**

$

95

90

100

103

Cash costs of production per carat recovered, net of capitalized stripping**

$

34

50

43

48

Cash costs of production per carat recovered, including capitalized stripping**

$

44

53

50

56







Sales






Approximate diamonds sold - Mountain Province***

000's carats

956

791

2,372

2,512

Average diamond sales price per carat

US

$                                       37

$                                       53

$                                    46

$                                    63


* at 100% interest in the Gahcho Kué Mine

**See Non-IFRS Measures section of the Company's September 30, 2020 MD&A for explanation and reconciliation

***Includes the sales directly to De Beers for fancies and specials acquired by De Beers through the production split bidding process

Financial Performance









Three months ended

Three months ended

Nine months ended

Nine months ended

(in thousands of Canadian dollars, except where otherwise noted)

September 30, 2020

September 30, 2019

September 30, 2020

September 30, 2019







Sales

$

47,337

54,832

146,787

211,302

Carats sold

 000's carats

956

791

2,372

2,512

Average price per carat sold

 $/carat

50

69

62

84

Cost of sales per carat*

 $/carat

73

77

72

75

(Loss) earnings from mine operations per carat

$

(23)

(8)

(10)

9

(Loss) earnings from mine operations

%

-47%

-11%

-16%

10%

Selling, general and administrative expenses

$

3,392

2,782

9,679

8,822

Operating (loss) income

$

(5,712)

(11,149)

(37,168)

5,252

Net loss for the period

$

(6,532)

(25,785)

(74,263)

(13,033)

Basic and diluted loss per share

$

(0.03)

(0.12)

(0.35)

(0.06)

* This cost of sales per carat includes the cost of acquiring 51% of the fancies and specials which have been sold, after having been won in a tendering process with De Beers Canada.

Conference Call

Full details of the financial and operating results for the quarter ended September 30, 2020 are described in Mountain Province's condensed consolidated interim financial statements with accompanying notes and related Management's Discussion and Analysis.  These documents and additional information on Mountain Province, including its' annual information form and US Form 40-F, are available on the Company's website at www.mountainprovince.com and on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.shtml.  Shareholders may contact Mountain Province at 161 Bay Street, PO Box 216, Toronto, ON, M5J 2S1, to request, free of charge, hard copies of the audited consolidated financial statements and related Management's Discussion and Analysis.

The Company will host an earnings conference call for analysts and investors on Thursday, November 5, 2020, at 11:00 a.m. Eastern Time.  The conference call can be accessed using the following details.  A replay of the call will also be available on the Company's website.

Title: Mountain Province Diamonds Inc. Q3 2020 Earnings Conference Call
Conference ID: 53381156
Date of call: 11/05/2020
Time of call: 11:00 Eastern Time
Expected Duration: 60 minutes

Webcast Link: https://produceredition.webcasts.com/starthere.jsp?ei=1387421&tp_key=675dd22682

Participant Toll-Free Dial-In Number:             (+1) 888 390 0546
Participant International Dial-In Number:       (+1) 416 764 8688

A replay of the webcast and audio call will be available on the Company's website.

****

About Mountain Province Diamonds Inc.

Mountain Province Diamonds is a 49% participant with De Beers Group in the Gahcho Kué diamond mine located in Canada's Northwest Territories. The Gahcho Kué Joint Venture property consists of several kimberlites that are actively being mined, developed, and explored for future development. The Company also controls 67,164 hectares of highly prospective mineral claims and leases immediately adjacent to the Gahcho Kué Joint Venture property that include an indicated mineral resource at the Kelvin kimberlite and inferred mineral resources for the Faraday kimberlites.

For further information on Mountain Province Diamonds and to receive news releases by email, visit the Company's website at www.mountainprovince.com.

Qualified Person

The disclosure in this news release of scientific and technical information regarding Mountain Province's mineral properties has been reviewed and approved by Keyvan Salehi, P.Eng., MBA, and Tom E. McCandless, Ph.D., P.Geo., both Qualified Persons as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects.

Caution Regarding Forward Looking Information
This news release contains certain "forward-looking statements" and "forward-looking information" under applicable Canadian and United States securities laws concerning the business, operations and financial performance and condition of Mountain Province Diamonds Inc.  Forward-looking statements and forward-looking information include, but are not limited to, statements with respect to estimated production and mine life of the project of Mountain Province; the realization of mineral reserve estimates; the timing and amount of estimated future production; costs of production; the future price of diamonds; the estimation of mineral reserves and resources; the ability to manage debt; capital expenditures; the ability to obtain permits for operations; liquidity; tax rates; and currency exchange rate fluctuations.  Except for statements of historical fact relating to Mountain Province, certain information contained herein constitutes forward-looking statements.  Forward-looking statements are frequently characterized by words such as "anticipates," "may," "can," "plans," "believes," "estimates," "expects," "projects," "targets," "intends," "likely," "will," "should," "to be", "potential" and other similar words, or statements that certain events or conditions "may", "should" or "will" occur.  Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements.  Many of these assumptions are based on factors and events that are not within the control of Mountain Province and there is no assurance they will prove to be correct.

Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include variations in ore grade or recovery rates, changes in market conditions, changes in project parameters, mine sequencing; production rates; cash flow; risks relating to the availability and timeliness of permitting and governmental approvals; supply of, and demand for, diamonds; fluctuating commodity prices and currency exchange rates, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes and other risks of the mining industry, failure of plant, equipment or processes to operate as anticipated.

These factors are discussed in greater detail in Mountain Province's most recent Annual Information Form and in the most recent MD&A filed on SEDAR, which also provide additional general assumptions in connection with these statements.  Mountain Province cautions that the foregoing list of important factors is not exhaustive.  Investors and others who base themselves on forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail.  Mountain Province believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this news release should not be unduly relied upon.  These statements speak only as of the date of this news release.

Although Mountain Province has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended.  There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.  Mountain Province undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change except as required by applicable securities laws.  The reader is cautioned not to place undue reliance on forward-looking statements.  Statements concerning mineral reserve and resource estimates may also be deemed to constitute forward-looking statements to the extent they involve estimates of the mineralization that will be encountered as the property is developed.

Further, Mountain Province may make changes to its business plans that could affect its results.  The principal assets of Mountain Province are administered pursuant to a joint venture under which Mountain Province is not the operator.  Mountain Province is exposed to actions taken or omissions made by the operator within its prerogative and/or determinations made by the joint venture under its terms.  Such actions or omissions may impact the future performance of Mountain Province.  Under its current note and revolving credit facilities Mountain Province is subject to certain limitations on its ability to pay dividends on common stock.  The declaration of dividends is at the discretion of Mountain Province's Board of Directors, subject to the limitations under the Company's debt facilities, and will depend on Mountain Province's financial results, cash requirements, future prospects, and other factors deemed relevant by the Board.

Contact: Stuart Brown, President, Chief Executive Officer, and Director, Phone: (416) 361-3562, E-mail: info@mountainprovince.com; Keyvan Salehi, Vice President, Corporate Development, Phone: (416) 361-3562, E-mail: info@mountainprovince.com

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