Gahcho Kué co-owner adjusts 2022 guidance after problems

Mountain Province Diamonds says problems that have hindered the production of rough diamonds at its NWT mine so far this year are being fixed.

The company owns a 49-percent interest in the Gahcho Kué diamond mine. De Beers Canada, which owns the remainder, operates the mine.

In a news release on Monday, Mountain Province said revenue was rebounding after a start to the year in which a fresh surge of Covid-19, issues with the separation of ore and waste rock, and a lack of process plant availability presented problems.

The company said those challenges led to “fewer tonnes treated and carats recovered relative to previous expectations.”

In the 2022 operating year, Mountain Province now expects to recover up to 5.8 million carats, down from a previous forecast of up to 6.4 million. Production costs per carat will be higher than previously expected.

Even so, the company said there were positive signs after a 2021 in which it reported financial difficulty and changed its leadership.

“These challenges are being addressed and significant improvements … have been achieved throughout June 2022,” the company stated.

Mountain Province said sales in the second quarter of 2022 represented its second-highest quarterly revenue on record and a 14-percent increase on the previous quarter.

“The rough diamond market continues to experience strong demand supported by solid US retail results,” Monday’s news release stated.

“Further support to the market is anticipated from jewellery retail in China as Covid restrictions ease in that country.”

Mark Wall, Mountain Province’s president and chief executive, said the company now had an “improved financial position” and remained “on track with our refinancing and strategic objectives.”