Mountain Province sees U-shaped rebound in diamond demand
Mountain Province Diamonds Inc. [MPVD-TSX, NYSE] has released details of its second quarter 2024 financial results and said the global diamond market continues to be softer than anticipated.
“At a macro level, the return of demand in China has not materialized so far and the market is now expecting a more protracted U-shaped recovery in diamond demand,’’ the company said in a press release.
Mountain Province Diamonds is a 49% participant with De Beers Canada in the Gahcho Kue diamond mine located in Canada’s Northwest Territories. The Gahcho Kue joint venture property consists of several kimberlites that are actively being mined, developed and explored for future development. The company also controls over 113,000 hectares of mineral claims and leases surrounding the mine, including and indicated resource for the Kelvin Kimberlite and inferred mineral resources for the Faraday kimberlites.
During the second quarter of 2024, 1.32 million carats were recovered, marking a 2.0% decline in comparison to the comparable quarter in 2023. The average Q2 grade of 1.37 carats per tonne, marked a 24% decline from the second quarter of 2023.
During the quarter, 557,361 carats were sold for total proceeds of $56.8 million (US$41.5 million) resulting in an average price of $102 per carat (US$74 per carat). These results compare with the second quarter of 2023 when 360,308 carats were sold for total proceeds of $59.9 million (US$44.6 million), resulting in an average price of $166 per carat (US$124).
“Q2 2024’s carats recovered is largely unchanged compared to Q2 2023,’’ said Mountain Province President and CEO Mark Wall. “The processing plant continued to perform well, with tonnes treated up 29% compared to the second quarter of 2023,’’ he said. “The good performance of the plant was offset by lower grade in the quarter. Lower grade had been expected as per the mine plan in Q2 2024, however, as noted previously, we have also seen a lower-than-expected grade at the deep portions of the pits continue through the quarter.’’
Wall went on to say that the team has been working on identifying and isolating the small area of grade underperformance and, as stated previously, this will improve as the operation moves through the year.
Mountain Provinces’ second quarter results were released after the close of trading on July 25, 2024, when the shares rose 4.00% to 13 cents. The shares trade in a 52-week range of 48 cents and 12 cents.
On the synthetic market, the quarter saw De Beers CEO Al Cook, announce it was pivoting to manufacture lab-grown diamonds for industrial uses and focusing its jewellery marketing efforts behind natural mined diamonds. “We are also seeing a resurgence in U.S. jewellers’ interest in natural diamonds,’’ Wall said. “The importance of diamond provenance continued to strengthen, which is helpful for Canadian diamond producers like Mountain Province.’’