Gahcho Kué’s owners are pausing discretionary spending and plan to cut costs at the NWT mine due to the “challenging state” of the rough diamond market.
Mountain Province Diamonds jointly owns Gahcho Kué with De Beers Canada. In a press release last week, the company said it had agreed to suspend growth-related spending, including further work on the mine’s underground expansion, to maximize cash generation.
Tom McCandless, vice president of exploration, will also move from a full-time position to providing support as a consultant as needed.
Mark Wall, Mountain Province’s president and chief executive, said the diamond market has “been under pressure” due to a slowing US market, low Chinese demand and uncertainty in the diamond supply chain, among other factors.
“We continue to monitor the market closely while focusing on the controllables, which are costs, production and operating efficiencies,” he was quoted as saying. “We aim to maintain the optionality of growth opportunities for an improved price environment.“
Wall said Mountain Province withheld some of its lower-value goods during the third quarter of 2023. In October, he said the company took the “unprecedented step” of selling some of its production directly to De Beers, temporarily removing it from the diamond market.
According to its third-quarter report, the company sold 478,653 carats for $60.3 million, earned $2.7 million from mine operations, and had a net loss of $13.4 million or six cents per share. As of September 30, the company held $214 million in current assets and $153 million in net working capital.
Comparatively, in the third quarter of 2022, the company sold 805,000 carats for $110.1 million, earned $44.7 million from mine operations, and had a net loss of $7.2 million or three cents per share.