Mountain Province Diamonds Inc. announcing  production and sales results for the third quarter ended September 30, 2019 (Q3 2019) from the Gahcho Kué Diamond Mine  (on a 100% basis) said that 1,528,494 carats were recovered at an average grade of 1.72 carats per tonne. This was 16% lower as compared to Q3 2018, when 1,819,000 carats were recovered at a grade of 2.40 carats per tonne; and 12% lower than the previous quarter (Q2 2019) during which 1,730,147 carats were recovered at 1.96 carats per tonne.

“Q3 2019 carat recovery was slightly below the Company's expectations but within the revised plan limits for 2019,” the Company stated.  

While  ongoing plant modifications undertaken   “to change bottom cut off and increase daily throughput”  have progressed well and the plant is performing above expectations, Mountain Province said severe weather conditions prevailing  in the earlier part of the year caused delays in the mine plan schedule, and access to the planned higher grade blocks of the orebody was limited.  

“The current quarter (Q4 2019) is trending positively,” the Company affirmed. “Access to higher grade blocks has been achieved and the Company reiterates its full year 2019 production guidance of 6.6 – 6.9 million carats.”

In the period under review, 791,252 carats were sold at an average value of C$69 per carat (US$52.5 per carat) for total proceeds of C$54.8 million (US$41.6 million) in comparison to 788,842 carats sold at an average value of C$95 per carat (US$72.5 per carat) for total proceeds of C$74.9 million (US$57.2 million) in Q3 2018.

“The lower prices realised year-on-year are affected by three factors; the source of the diamonds from varying parts of the orebody (mostly lower grade areas of Hearne and SWC Kimberlites in 2019 versus 5034 in 2018), lower quality and grade material processed during Q2 and Q3 2019, and the overall sentiment in the rough diamond market and associated pressure on prices of lower quality and smaller stones,” the Company explained.

Commenting on the market scenario, Mountain Province said:  “The sentiment in the rough diamond market remains cautious and the most recent sales results reflect this. The recent protests in Hong Kong and ongoing trade negotiations between US and China have also affected the mood in the market.”

However, the Company stressed that its medium to long term outlook for rough diamonds remains positive. “The major producers have reported lower levels of sales in recent months, and this is expected to help normalise inventory levels in the cutting centres,” Mountain Province noted. “In addition, anticipated mine closures over the next 12 – 18 months will also help to establish a better supply and demand balance in the market. More importantly, consumer confidence and spending, particularly in the US, which makes up for 40 – 50% of the overall diamond jewellery market, is still strong.”

The Company reiterated it is on track to achieve its full year guidance of 6.6 – 6.9 million carats, and at the lower end of the cost guidance of $110 - $115 per tonne treated.

Stuart Brown, the Company's President and Chief Executive Officer, commented: "From a production perspective I fully expect 2019 will be a successful year.”

He   added: "The rough diamond market remains tight. Geopolitical and trade war tensions together with the recent issues in Hong Kong have not been helpful in improving sentiment across the diamond pipeline. Our medium to long-term view of the market remains positive. The major producers have seen reduced levels of sales in their recent rough diamond sales events and this, together with the closure of older mines, should have a positive effect on the supply side of the market in 2020 and beyond and help to restore confidence across the diamond pipeline."