Mountain Province Diamonds Inc. [MPVD-TSX, NASDAQ] reported results of its eighth diamond sale completed on October 5th 2018.
Total proceeds from the sale were US$24.2 million (CDN$31.4 million) from 366,505 carats at an average realized value of US$66 per carat. These results were in line with company expectations and reflect current market conditions. Management said they saw good price bids for its better quality larger goods where the majority of the value lies. In the lower qualities and smaller sizes, there were average price declines in the mid-single digits. The company’s press release said Mountain Province believes the price pressure is predominantly driven by the recent rapid weakening of the Indian Rupee against the US Dollar and to some extent the seasonal lower demand for rough diamonds ahead of the Diwali celebrations.
Encouragingly, the company have noted some good reporting of diamond retail jewellery sales particularly in the US where demand remains strong. This news is supportive as we enter into the major selling seasons for the US and Far East markets. Consumer sentiment in the US remains strong on the back of a healthy economy and strong labour market. The Chinese retail market, and the jewellery retail in particular is also strong and showing positive momentum despite the most recent uncertainty in Chinese Capital Markets.
Stuart Brown, President and CEO of Mountain Province, said, “The eighth sale of the year totalling US$24.2 million was a good result considering the current market and time of the year and we did well to sell all our categories at current best market prices. We are encouraged to see positive diamond jewellery retail sales and we believe that with a positive retail selling season we will see better demand for rough diamonds in the near future.”
Mountain Province Diamonds is a 49% participant with De Beers Canada in the Gahcho Kué diamond mine located in Canada’s Northwest Territories. Gahcho Kué is the world’s largest new diamond mine, consisting of a cluster of four diamondiferous kimberlites, three of which are being developed and mined under the initial 12-year mine plan.