Mountain Province Diamonds Inc. [MPVD-TSX, NYSE] and Stuart Brown, the company’s President and CEO, have reached a mutual decision that Brown will depart the company, effective immediately.
Jonathan Comerford has been named interim President and CEO. A search for a full-time replacement has commenced and the company said it hopes to make an appointment in the coming weeks.
While Brown has also resigned as a director, he will provide assistance to the company to facilitate the transition period.
“On behalf of the Board, I would like to thank Stuart for his strong and committed service as CEO of Mountain Province for the past three years,’’ Comerford said. “Stuart has guided the company through difficult times for the diamond sector, including the very challenging COVID-19 Pandemic. He leaves the company in a stronger position entering 2022.’’
The announcement that Brown is stepping down came after the close of trading on October 6, 2021, when Mountain Province shares closed at 43 cents. The shares are currently trading in a 52-week range of 82 cents and 33.5 cents.
Mountain Province is a Canadian diamond mining company. In a joint venture with De Beers Ltd., it operates the world’s largest and richest new diamond mine – Gahcho Kue – located in Canada’s Northwest Territories.
Gahcho Kue is a fly-in-fly out operation located 280 kilometres northeast of Yellowknife and is expected to produce an average of 4.5 million carats per year (100%) over an initial 12-year lifespan. Production during the first five years (2017 to 2021) was expected to average 5.4 million carats annually.
De Beers Canada has a 51% stake in the operation, with Mountain Province holding the other 49%.
Earlier this year, the company reported an outbreak of COVID-19 at its Northwest Territories mine site, which resulted in the temporary suspension of production-related activities.
For context, the Government of the Northwest Territories defines an outbreak in a closed facility (which includes remote camps) as one or more confirmed or probable case(s) of COVID-19 where the infection is acquired within the facility, Mountain Province said.
Mountain Province’s largest shareholder Dermot Desmond agreed to refinance the company’s US$25 million maturing revolving credit line after its financial and operational results in the second quarter of 2020 were heavily impacted by COVID-19 headwinds and associated global migration efforts to slow down the spread of the virus.
The severe impact of COVID-19 meant that the market for rough diamonds came to a virtual halt in the second quarter (of 2020) and the company was unable to execute any normal sales.
However, during the third quarter of 2021, 1.03 million carats were sold for proceeds of $93.9 million, resulting in an average value of $91 per carat, bringing year to date sales of 2.35 carats for total proceeds of $212.5 million, resulting in a year-to-date average value of $90 per carat.