Mountain Province Diamonds Inc. announcing its financial and operating results for the full year ended December 31, 2018 reported strong production performance. 

For the period, the Gahcho Kué Mine recovered a record 6,937,000 carats of diamond as compared to 5,934,000 carats recovered in 2017. The mine also exceeded the upper end of FY2018 guidance of tonnes treated to reach 3,194,000 tonnes, as against 2,775,000 tonnes treated in the previous year.

The Company also reported that the average recovered grade had gone up by 4% above the original budget at approximately 2.17 carats per tonne (cpt) as compared to 2.14 cpt  in 2017.

Mountain Province sold 3,253,000 carats in 2018 as compared to 2,656,000 carats in 2017.  The 2018 sales included over 500 (2017: 250) gem quality large stones (exceeding 10.8 carats). Part of these stones were the exceptional 95 carat white stone and a 60 carat fancy vivid yellow stone.

The Company’s total sales revenue for the year stood at C$ 311 million (US$ 240 million), compared to C$ 170 million in 2017 (US$ 134 million). This represented an average realised value of C$ 96 per carat (US$ 74) as against C$ 85 per carat (US$ 68) realised in 2017.  

The adjusted EBITDA for the full year of C$ 139.2 million marked an increase of 33% over the previous year when adjusted EBITDA had amounted to C$ 103.4 million. The Company noted that this demonstrated “the good cash generation of the Gahcho Kué Mine”. 

Mountain Province said that earnings from mine operations had grown by 55% to C$ 81.0 million as compared to C$ 52.1 million in 2017. 

“During the year, the Company repurchased C$ 26.4 million (US$ 20.1 million) of outstanding secured notes payable (2017: nil),” the Company revealed.

A dividend totalling C$ 8.4 million representing C$ 0.04 per common share was paid out.

“Net loss for full year 2018 at December 31, 2018 was C$ 18.9 million or C $0.10 loss per share (2017: net income $ 17.2 million or $ 0.11 earnings per share),” Mountain Province reported. “Included in the determination of net loss for the full year at December 31, 2018 are unrealised foreign exchange losses of C$ 32 million, on the translation of the Company's USD-denominated long-term debt. The unrealised foreign exchange losses are a result of the weakening of the Canadian dollar versus US dollar.”  The Company noted that    the weakening Canadian dollar compared to US dollar is beneficial to the Company, as sales are made in US dollars and operating costs are incurred in Canadian dollars. 

Capital expenditures in 2018 amounted to C$ 35.8 million, C$ 29.4 million of which were one-time pre-mine construction and development capital costs and the remaining C$ 6.4 million were sustaining capital expenditures related to mine operations, the Company stated. 

Mountain Province reported a year end cash position of C$ 30.7 million (2017: C$ 43.1 million) and net working capital of C$ 87.2 million (2017: C$96.8 million), with US$50 million revolving credit facility remaining undrawn.

Mountain Province also reported its Q4 2018 results. In the fourth quarter of the year, the Company sold 823,000 carats sold as compared to 1,006,000 carats in Q4 2017. Total proceeds of the sale amounted to C$ 70.5 million (US$ 53.6 million) compared to C$ 77.2 million (US$ 60.9 million) for sales in Q4 2017. The average realised value for Q4 2018 stood at of C$ 86 (US$ 65)  per carat as against average realised value of C$ 77 (US$ 60)  per carat in Q4 2017.

Adjusted EBITDA for the three months ended December 31, 2018 amounted to C$ 26.5 million. Earnings from mine operations in  Q4 2018 amounted to C$ 12.7 million.

The Gahcho Kué Mine treated 751,000 tonnes of ore and recovered 1,546,000 carats on a 100% basis for an average recovered grade of approximately 2.06 carat per tonne. 

Net loss for Q4 2018 amounted to C$ 30.2 million or C$ 0.15 loss per share. “Included in the determination of net loss for the three months ended December 31, 2018 are unrealised foreign exchange losses of C$ 21.0 million, on the translation of the Company's USD-denominated long-term debt,” the Company stated. “The unrealised foreign exchange losses are a result of the relative weakening of the Canadian dollar versus US dollar.”  

Mountain Province President and CEO Stuart Brown commented: "Financial Year 2018 was Mountain Province's first full year of commercial production at the new Gahcho Kué Mine and we are pleased with its operational performance. The Gahcho Kué Mine has settled down well and has outperformed our initial expectations in terms of throughput and overall diamond production which is an excellent achievement.”

He added: “This trend has continued into 2019 with the mine continuing to perform substantially ahead of expectations. Financial Year 2019 is expected to be another strong year of production. We are confident that we will meet or exceed, our production targets as we have done in the last two years. Along with our Joint Venture Partner, De Beers Canada, we are working on various short and medium-term initiatives which will have a positive impact on the future of the Gahcho Kué Mine. These relate to improvement of production rates and extending the life of mine by including additional JV ore discovered during 2018 and we look forward to updating the market as we complete these tasks later in 2019.”