TSX and OTCQX: MPVD
TORONTO and NEW YORK, May 3,
2022 /PRNewswire/ -- - Mountain Province Diamonds Inc.
("Mountain Province", the
"Company") (TSX: MPVD) (OTC: MPVD) today announces strong financial
results for the first quarter ended March
31, 2022 ("the Quarter" or "Q1 2022") continuing the strong
operational and financial performance achieved in 2021 from the
Gahcho Kué Diamond Mine ("GK Mine").
All figures are expressed in Canadian dollars unless otherwise
noted.
Company Highlights for First Quarter 2022
- Record average sales value per carat of US$132/carat, 52% higher as compared to average
values in Q4 2021. The increase in average values in Q1 reflected
the demand growth across the rough diamond market along with
upstream stock levels, now believed to reflect operating
inventories only.
- Updated NI 43-101 Technical Report featuring:
-
- C$1.2Bn pre-tax/royalty NPV7.5%
attributable to MPVD, a 109% increase relative to the 2019
Technical Report
- 2.6M Carats in Reserve additions,
before depletion
- Life of Mine plan with an improved processing rate of
3.6Mtpa
- US$50M Junior Credit Facility
closed
Financial Highlights for First Quarter 2022
- 507,000 carats sold, with total proceeds of $84.7 million (Q1 2021: $54.2 million) at an average realised value of
$167 per carat (US$132 per carat, Q1 2021: US$71/carat).
- Adjusted EBITDA1 of $44.6
million (Q1 2021: 19.1 million).
- Earnings from mine operations of $42.8
million (Q1 2021: $13.7
million).
- Cash costs of $122 per tonne
treated and $73/carat recovered,
including capitalized stripping costs1.
- Net income of $24.2 million or
$0.11 earnings per share as compared
to net income of $7.3 million or
$.03 earnings per share for Q1
2021[2].
Operational Highlights for First Quarter 2022 (all
figures reported on a 100% basis unless otherwise
stated)
- 8,168,000 tonnes mined, compared to 5,605,000 mined in Q1 2021,
a 46% increase
- 1,019,000 ore mined, a 99% increase relative to 515,000 tonnes
mined in Q1 2021
- 707,553 ore tonnes treated, a 13% increase relative to 625,582
tonnes treated in Q1 2021
- 1,185,156 carats recovered, 15% lower than the comparable
quarter (Q1 2021: 1,392,128 carats)
As previously disclosed, during the first quarter Gahcho Kué
experienced an outbreak of COVID-19 Omicron that caused disruption
to both operations and maintenance activities, in conjunction with
a major failure of the Pitman bearing in the primary crusher.
These two events have been largely resolved, but within the quarter
production was below internal expectations, as the feed rate
through the Primary crusher continued to be lower than
planned. Grade was impacted by unplanned external dilution
from mining that was primarily due to workforce inefficiencies
around shovel operations and bottom pit mining causing space
constraints, in conjunction with a different ore mix than was
planned. The Company is working with its joint venture
partner DeBeers, who are the operator of the mine, to address these
operating issues.
Sales Highlights for First Quarter 2022
As previously released, during the first quarter only 507,000
carats were sold for total proceeds of $84.7
million (US$66.7 million)
resulting in an average value of $167
per carat (US$132 per carat). This is
a 52% increase relative to the average value per carat in Q4 2021
of $110 per carat (US$86 per carat) but 16% lower in terms of volume
of carats sold.
Mark Wall, the Company's
President and Chief Executive Officer, commented:
"I'm extremely pleased to see the Company's strong
financial performance in Q1, with a record adjusted EBITDA of
$44.6M in the first 3 months of the
year. In addition to its strong financial performance, the Company
closed a US$50M Junior Credit
Facility with its largest shareholder, and produced an updated NI
43-101 Technical Report which demonstrated an NPV attributable to
Mountain Province of over
$1.2Bn. These milestones are
significant steps forward as we progress through what is to be a
pivotal year for the Company, and all of its stakeholders. Going
forward Management time will be focussed on guiding the Operator to
optimise the operation and addressing the financing requirements of
the Company."
Financial Performance
|
|
Three months
ended
|
Three months
ended
|
(in thousands of
Canadian dollars, except where otherwise noted)
|
March 31,
2022
|
March 31,
2021
|
|
|
|
|
Sales
|
$
|
84,653
|
54,224
|
Carats sold
|
000's
carats
|
507
|
603
|
Average price per carat
sold
|
$/carat
|
167
|
90
|
Cost of sales per
carat*
|
$/carat
|
83
|
80
|
Earnings from mine
operations per carat
|
$
|
84
|
10
|
Earnings from mine
operations
|
%
|
50%
|
11%
|
Selling, general and
administrative expenses
|
$
|
3,994
|
2,609
|
Operating
income
|
$
|
35,018
|
10,532
|
Net income for the
period
|
$
|
24,196
|
7,312
|
Basic and diluted
income per share
|
$
|
0.11
|
0.03
|
Gahcho Kué Mine Operations
The following table summarizes key operating statistics for the
Gahcho Kué Mine in the three months ended March 31, 2022 and 2021.
|
|
Three months
ended
|
Three months
ended
|
|
|
March 31,
2022
|
March 31,
2021
|
|
|
|
|
GK operating
data
|
|
|
|
Mining
|
|
|
|
*Ore tonnes
mined
|
kilo
tonnes
|
1,019
|
515
|
*Waste tonnes
mined
|
kilo
tonnes
|
7,149
|
5,090
|
*Total tonnes
mined
|
kilo
tonnes
|
8,168
|
5,605
|
*Ore in
stockpile
|
kilo
tonnes
|
1,059
|
158
|
|
|
|
|
Processing
|
|
|
|
*Ore tonnes
processed
|
kilo
tonnes
|
708
|
626
|
*Average plant
throughput
|
tonnes per
day
|
7,867
|
6,731
|
*Average diamond
recovery
|
carats per
tonne
|
1.67
|
2.22
|
*Diamonds
recovered
|
000's
carats
|
1,185
|
1,392
|
Approximate diamonds
recovered - Mountain Province
|
000's carats
|
581
|
682
|
Cash costs of
production per tonne of ore, net of capitalized stripping
**
|
$
|
93
|
119
|
Cash costs of
production per tonne of ore, including capitalized
stripping**
|
$
|
122
|
139
|
Cash costs of
production per carat recovered, net of capitalized
stripping**
|
$
|
56
|
53
|
Cash costs of
production per carat recovered, including capitalized
stripping**
|
$
|
73
|
62
|
|
|
|
|
Sales
|
|
|
|
Approximate diamonds
sold - Mountain Province***
|
000's carats
|
507
|
603
|
Average diamond sales
price per carat
|
US
|
$
132
|
$
71
|
|
* at 100%
interest in the Gahcho Kué Mine
|
**See Non-IFRS Measures
section of the Company's March 31, 2022 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
|
Conference Call
The Company will host its quarterly conference call on
Wednesday, May 4th, 2022
at 11:00am ET.
Title: Mountain Province Diamonds Inc Q1 2022 Earnings
Conference Call
Conference ID: 29875964
Date of call: 05/04/2022
Time of call: 11:00 Eastern
Time
Expected Duration: 60 minutes
Webcast Link:
https://produceredition.webcasts.com/starthere.jsp?ei=1545143&tp_key=bd339f39e9
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 the Company
Mountain Province Diamonds is a 49% participant with De
Beers Canada 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
106,202 hectares of highly prospective mineral claims and leases
that surround the Gahcho Kué Joint Venture property that include an
indicated mineral resource for 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 Matthew MacPhail, P.Eng., MBA,
and Tom E. McCandless, Ph.D.,
P.Geo., both employees of Mountain Province Diamonds and 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 operational hazards, including possible disruption due
to pandemic such as COVID-19, its impact on travel, self-isolation
protocols and business and operations, 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
the development of operation hazards which could arise in relation
to COVID-19, including, but not limited to protocols which may be
adopted to reduce the spread of COVID-19 and any impact of such
protocols on Mountain Province's
business and operations, 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
__________________________________
|
1 Cash 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 March 31, 2022 MD&A for explanation and
reconciliation.
|
2 Included
in the determination of net income for the three months ended March
31, 2022 are unrealized foreign exchange gains of $4.2 million, on
the translation of the Company's US$-denominated debt. The
unrealized foreign exchange gains are a result of the strengthening
of the Canadian dollar versus the US dollar.
|
Investor Contact: Rich Matthews, Partner, Integrous
Communications, rmatthews@integcom.us, (604) 757
7179, www.integcom.us; Mark Wall, President and
CEO, 161 Bay Street, Suite 1410, Toronto, Ontario
M5J 2S1, Phone: (416) 361-3562, E-mail:
info@mountainprovince.com; Matthew MacPhail, Chief Technical
Officer, 161 Bay Street, Suite 1410, Toronto,
Ontario M5J 2S1, Phone: (416) 361-3562, E-mail:
info@mountainprovince.com