Mountain Province reports ‘slower than expected’ Q1 at Gahcho Kué  

Mountain Province Diamonds (TSX: MPVD, US-OTC: MPVD) has reported a 15% year-on-year decrease in first quarter production at its 49%-owned Gahcho Kué diamond mine, located in the Northwest Territories.  

While tonnage was up – the operation mined 1 million tonnes of ore in the most recent quarter, a 98% increase compared to last year’s 515,000 tonnes – grades were down 25% year-on-year at 1.68 carats per tonne. The mine produced 1.2 million carats of diamonds in this year’s first quarter compared to 1.4 million carats in the same period of 2021. 

Last year’s first quarter production figures were marred by a 22-day shutdown in February following an outbreak of Covid-19 at the site. 

This year the mine, which is operated by 51% owner De Beers, encountered “additional unmodeled resource” carrying a lower grade than the planned mining areas, the company said. 

“The discovery of incremental, previously unmodeled kimberlite ore is a positive for the operation and reflects the significant opportunities for additional diamonds to be discovered,” the company’s CEO Mark Wall said in a press release.  

“The operational effects of the late-2021/early 2022 Omicron outbreak at site are now largely behind us and the unplanned failure at the primary crusher is repaired, with additional crusher optimization opportunities identified,” he added.  

Together with De Beers, the company is looking to make the “necessary improvements” after a “slower than expected” first quarter.  

Located about 280 km northeast of Yellowknife, the Gahcho Kué open pit operation has a mine area of 12 sq. km and produces an average of 4.5 million carats annually.

Mine reserves are contained in several of the kimberlites: 5034, Hearne, Tuzo and Wilson. Commercial production began in 2017 with the 5034 kimberlite, followed by Hearne, and will later incorporate ore from Tuzo.  

Diamond prices have risen strongly over the past year. The joint venture sold 506,567 carats for $84.7 million (US$66.7 million) during the quarter averaging at $167 per carat (US$132), which is a 52% increase compared to the previous quarter’s $110 per carat (US$86).  

Scotiabank analyst Scott Macdonald described the latest update as “mildly negative.” The quarterly production was 22% lower than last year’s fourth quarter, “but only 8% below our estimate of 1.28 million tonnes on lower grade and throughput,” he wrote in a research note to clients on Apr. 18.  

At the end of 2021, the mine had probable reserves of 42.6 million carats in in 28.3 million tonnes grading 1.51 carats per tonne.

At press time in Toronto, Mountain Province Diamonds was trading at 85¢ per share within a 52-week trading range of 39.5¢ and 99¢. The company has 210.9 million common shares outstanding for a market cap of $179.3 million.