TSX:MPVD and OTC: MPVDF
TORONTO and NEW
YORK, Nov. 8, 2022 /PRNewswire/ - Mountain
Province Diamonds Inc. ("Mountain Province", the "Company") (TSX:
MPVD) (OTC: MPVDF) is pleased to release its financial and
operating results for the third quarter ("Q3 2022") and nine months
ended September 30, 2022. All figures
are expressed in Canadian dollars unless otherwise noted.
Third Quarter 2022 Key Highlights
- Revenue of $110.1M representing
the highest quarterly revenue in the Company's history and a 12%
increase relative to that achieved in Q2 2022
- Robust Quarterly Adjusted EBITDA of $54.1M1
- Strong average price per carat sold of US$104 during the quarter, which when adjusted
for mix of goods sold, on a like-for-like basis represented a 2%
increase in average price per carat relative to Q2 2022
- During the quarter, repurchase for cancellation of
approximately US$16.9 million
aggregate principal amount of 8.000% Senior Secured Second Lien
Notes, bringing the total 2022 repurchase amount to US$26.9M
- Subsequent to quarter-end, the Company executed a non-binding
term sheet with certain holders of its 8.000% Senior Secured Second
Lien Notes ("Existing Notes") due December
15th, 2022 for a partial refinancing ("Proposed
Transaction") of the Existing Notes. The Proposed Transaction is
currently expected to include the exchange of approximately
US$190.0 million aggregate principal
amount of Existing Notes for approximately US$195.9 million aggregate principal amount of
new Loan Notes. The New Loan Notes are expected to bear interest at
a rate of 9.0% per annum and have a three-year term. The Company
expects to retire the remaining balance of the Existing Notes with
cash on hand, drawing down the Dunebridge facility and the
consummation of the Proposed Transaction. The Proposed Transaction
is pending shareholder and regulatory review.
Mark Wall, the Company's
President and Chief Executive Officer, commented:
"The third quarter was incredibly positive for the company on
many levels. Firstly, the non-binding term sheet for debt
refinancing of US$190 million with a
three-year term with a 9% coupon. Production in the third quarter
saw improvement from both Q1 & Q2 which was the result of
detailed operational and maintenance focus.
The discovery of the Hearne Northwest Extension reported
during Q2 has been the source of ongoing work and those results
provide the opportunity to consider the feasibility of underground
extraction of diamonds at Gahcho Kué in the future to extend the
mine life, as we have seen in other diamond mines in the
Northwest Territories. We continue
to work on these opportunities.
With all of this happening to achieve the highest revenue
quarter in the Company's history in Q3 is a very encouraging
result."
Operational Highlights for Third Quarter 2022 ("Q3
2022")
- 1,452,000 carats recovered at an average grade of 1.78 carats
per tonne, a 15% increase relative to Q2 2022 and a 7% decrease
compared to the 1,562,000 carats recovered at 1.88 carats per tonne
in Q3 2021 (Q2 2022: 1,261,000 carats recovered).
- 817,000 ore tonnes treated, a 9% increase relative to Q2 2022,
and an 2% decrease relative to Q3 2021 (Q2 2022, 749,000 ore tonnes
treated; Q3 2021: 832,000 ore tonnes treated).
- 1,346,000 ore tonnes mined, a 29% increase relative to
1,043,000 tonnes mined in Q2 2022 and a 30% increase relative to
the 1,034,000 tonnes mined in Q3 2021.
- 7,753,000 total tonnes mined, a 2% decrease relative to Q2 2022
and a 25% decrease from 10,280,000 total tonnes mined in Q3
2021.
Financial Highlights for Third Quarter 2022 ("Q3
2022")
- Revenue from 805,000 carats sold at $110.1 million (US$83.3
million) at an average realised price of $137 per carat (US$104) compared to $94.2
million from 1,027,000 carats sold in Q3 2021 (US$74.1 million) at an average realized price of
$92 per carat (US$72).
- Adjusted EBITDA1 of $54.1
million compared to $41.2
million in Q3 2021.
- Earnings from mine operations $44.7
million compared to $35.5
million in Q3 2021.
- Cash costs of production, including capitalized stripping
costs1 of $128 per tonne
treated (2021: $101 per tonne) and
$72 per carat recovered (2021:
$54 per carat).
- Net loss at September 30, 2022
was $7.2 million or $0.03 loss per share (2021: Net income of
$8.8 million or $0.04 earnings per share). Included in the
determination of the net loss at September
30, 2022 are unrealized foreign exchange losses of
$26.3 million, on the translation of
the Company's USD-denominated short-term and long-term debt. The
unrealized foreign exchange losses are a result of the weakening of
the Canadian dollar versus US dollar.
1Cash costs
of production, including capitalized stripping costs, and Adjusted
EBITDA are non-IFRS measures with no standardized meaning
prescribed under IFRS. See the Non-IFRS Measures section of the
Company's September 30, 2022 MD&A for explanation and
reconciliation.
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Operational Highlights for the nine months ended September 30, 2022
- 3,898,000 carats recovered at an average grade of 1.71 carats
per tonne, 17% lower than the 4,718,000 carats, 2.08 carats per
tonne, recovered for the nine months ended September 30, 2021.
- 2,274,000 tonnes of ore treated in September 30, 2022; compared to the 2,269,000
tonnes treated for the nine months ended September 30, 2021.
- 23.8 million total tonnes mined for the nine months ended
September 30, 2022, a 3% decrease
from the 24.6 million total tonnes mined for the nine months ended
September 30, 2021.
Financial Highlights for the nine months ended September 30, 2022
- Total sales revenue of $292.5
million (US$226 million) at an
average realised price of $154 per
carat (US$119) compared to
$213.2 million in 2021 (US$169.4 million) at an average realized price of
$91 per carat (US$72).
- Adjusted EBITDA2 of $153.8
million compared to $98.2
million for the nine months ended September 30, 2021.
- Earnings from mine operations of $138.9
million (2021: $82.1
million).
- Cash costs of production, including capitalized stripping
costs2, of $133 per tonne treated (2021:
$110 per tonne) and
$78 per carat recovered (2021:
$53 per carat).
- Net income for the nine months ended September 30, 2022 was $39.8 million or $0.19 earnings per share (2021: net income
$38.5 million or $0.18 earnings per share). Included in the
determination of the net income for the nine months ended
September 30, 2022 are unrealized
foreign exchange losses of $33.8
million, on the translation of the Company's USD-denominated
short-term and long-term debt. The unrealized foreign exchange
losses are a result of the weakening of the Canadian dollar versus
US dollar.
- Capital expenditures in the nine months ended September 30, 2022 were $34.1 million, $26.1
million of which were deferred stripping costs, with the
remaining $8 million accounting for
sustaining capital expenditures related to mine operations.
2Cash costs
of production, including capitalized stripping costs, and Adjusted
EBITDA are non-IFRS measures with no standardized meaning
prescribed under IFRS. See the Non-IFRS Measures section of the
Company's September 30, 2022 MD&A for explanation and
reconciliation.
|
Market Highlights for Q3 & nine months ended September 2022
During Q3 2022, 805,227 carats were sold for total proceeds of
C$110.6 million (US$83.3 million), resulting in an average price
of C$137 per carat (US$104 per carat). This Q3 2022 sales result
represents a 13% increase in revenue relative to Q2 2022, and a 10%
reduction on an US$ average price per carat basis. Adjusting for
mix of goods sold, on a like-for-like basis the Q3 2022 sales
result represented a 2% increase in average price per carat
relative to Q2 2022.
Year-to-date 2022, 1,898,557 carats have been sold at an average
price of $154 per carat (US$119 per carat) for total proceeds of
$292.9 million (US$226.0 million) in comparison to 2,349,644
carats sold at an average price of $90 per carat (US$72 per carat) for total proceeds of
$212.5 million (US$169.4 million) during the same period in
2021.
Gahcho Kué Mine Operations
The following table summarizes key operating statistics for the
Gahcho Kué Mine in the three and nine months ended September 30, 2022 and 2021.
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Three months
ended
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Three months
ended
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Nine months
ended
|
Nine months
ended
|
|
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September 30,
2022
|
September 30,
2021
|
September 30,
2022
|
September 30,
2021
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GK operating
data
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Mining
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*Ore tonnes
mined
|
kilo
tonnes
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1,346
|
1,034
|
3,408
|
2,542
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*Waste tonnes
mined
|
kilo
tonnes
|
6,407
|
9,246
|
20,394
|
22,092
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*Total tonnes
mined
|
kilo
tonnes
|
7,753
|
10,280
|
23,802
|
24,634
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*Ore in
stockpile
|
kilo
tonnes
|
1,882
|
542
|
1,882
|
542
|
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Processing
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*Ore tonnes
processed
|
kilo
tonnes
|
817
|
832
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2,274
|
2,269
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*Average plant
throughput
|
tonnes per
day
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8,978
|
9,244
|
8,360
|
8,311
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*Average diamond
recovery
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carats per
tonne
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1.78
|
1.88
|
1.71
|
2.08
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*Diamonds
recovered
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000's
carats
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1,452
|
1,562
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3,898
|
4,718
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Approximate diamonds
recovered - Mountain Province
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000's carats
|
711
|
765
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1,910
|
2,312
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Cash costs of
production per tonne of ore, net of capitalized stripping
**
|
$
|
109
|
80
|
110
|
93
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Cash costs of
production per tonne of ore, including capitalized
stripping**
|
$
|
128
|
101
|
133
|
110
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Cash costs of
production per carat recovered, net of capitalized
stripping**
|
$
|
61
|
43
|
64
|
45
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Cash costs of
production per carat recovered, including capitalized
stripping**
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$
|
72
|
54
|
78
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53
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Sales
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Approximate diamonds
sold - Mountain Province***
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000's carats
|
805
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1,027
|
1,899
|
2,349
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Average diamond sales
price per carat
|
US
|
$
104
|
$
72
|
$
119
|
$
72
|
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* at 100% interest in
the Gahcho Kué Mine
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**See Non-IFRS Measures
section of the Company's September 30, 2022 MD&A for
explanation and reconciliation
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***Includes the sales
directly to De Beers for fancies and specials acquired by De Beers
through the production split bidding process
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Financial Performance
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Three months
ended
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Three months
ended
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Nine months
ended
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Nine months
ended
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(in thousands of
Canadian dollars, except where otherwise noted)
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September 30,
2022
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September 30,
2021
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September 30,
2022
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September 30,
2021
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Sales
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$
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110,124
|
94,208
|
292,538
|
223,579
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Carats sold
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000's
carats
|
805
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1,027
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1,899
|
2,349
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Average price per carat
sold
|
$/carat
|
137
|
92
|
154
|
95
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Cost of sales per
carat*
|
$/carat
|
81
|
57
|
81
|
60
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Earnings from mine
operations per carat
|
$
|
56
|
35
|
73
|
35
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Earnings from mine
operations
|
%
|
41 %
|
38 %
|
47 %
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37 %
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Selling, general and
administrative expenses
|
$
|
3,898
|
3,106
|
11,695
|
8,391
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Operating
income
|
$
|
37,705
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30,137
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115,770
|
69,425
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Net (loss) income for
the period
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$
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(7,187)
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8,764
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39,774
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38,548
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Basic an diluted
earnings per share
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$
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(0.03)
|
0.04
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0.19
|
0.18
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* This cost of sales
per carat includes the cost of acquiring 51% of the fancies and
specials which have been sold, after having been won in a tendering
process with De Beers Canada.
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Conference Call
The Company will host its quarterly conference call on
Wednesday, November 9th,
2022 at 11:00am ET.
Title: Mountain Province Diamonds Inc Q3 2022 Earnings
Conference Call
Conference ID: 93747391
Date of call: November 9, 2022
Time of call: 11:00 Eastern Time
Expected Duration: 60 minutes
Webcast Link:
https://app.webinar.net/d5Vm7Jb7PyW
Participant Toll-Free Dial-In
Number:
(+1) 888-390-0546
Participant International Dial-In
Number: (+1) 416-764-8688
A replay of the webcast and audio call will be available on the
Company's website.
About the Company
Mountain Province Diamonds is a 49% participant with De
Beers Canada in the Gahcho Kué diamond mine located in Canada's Northwest
Territories. The Gahcho Kué Joint Venture property consists
of several kimberlites that are actively being mined, developed,
and explored for future development. The Company also controls
106,202 hectares of highly prospective mineral claims and leases
that surround the Gahcho Kué Joint Venture property that include an
indicated mineral resource for the Kelvin kimberlite and inferred
mineral resources for the Faraday kimberlites.
For further information on Mountain Province Diamonds and to
receive news releases by email, visit the Company's website at
www.mountainprovince.com.
Qualified Person
The disclosure in this news release of scientific and technical
information regarding Mountain
Province's mineral properties has been reviewed and approved
by Matthew MacPhail, P.Eng., MBA,
and Tom E. McCandless, Ph.D.,
P.Geo., both employees of Mountain Province Diamonds and Qualified
Persons as defined by National Instrument 43-101 Standards of
Disclosure for Mineral Projects.
Caution Regarding Forward Looking Information
This news release contains certain "forward-looking
statements" and "forward-looking information" under applicable
Canadian and United States
securities laws concerning the business, operations and financial
performance and condition of Mountain Province Diamonds Inc.
Forward-looking statements and forward-looking information include,
but are not limited to, statements with respect to operational
hazards, including possible disruption due to pandemic such as
COVID-19, its impact on travel, self-isolation protocols and
business and operations, estimated production and mine life of the
project of Mountain Province; the
realization of mineral reserve estimates; the timing and amount of
estimated future production; costs of production; the future price
of diamonds; the estimation of mineral reserves and resources; the
ability to manage debt; capital expenditures; the ability to obtain
permits for operations; liquidity; tax rates; and currency exchange
rate fluctuations. Except for statements of historical fact
relating to Mountain Province,
certain information contained herein constitutes forward-looking
statements. Forward-looking statements are frequently characterized
by words such as "anticipates," "may," "can," "plans," "believes,"
"estimates," "expects," "projects," "targets," "intends," "likely,"
"will," "should," "to be", "potential" and other similar words, or
statements that certain events or conditions "may", "should" or
"will" occur. Forward-looking statements are based on the
opinions and estimates of management at the date the statements are
made, and are based on a number of assumptions and subject to a
variety of risks and uncertainties and other factors that could
cause actual events or results to differ materially from those
projected in the forward-looking statements. Many of these
assumptions are based on factors and events that are not within the
control of Mountain Province and
there is no assurance they will prove to be correct.
Factors that could cause actual results to vary materially
from results anticipated by such forward-looking statements include
the development of operation hazards which could arise in relation
to COVID-19, including, but not limited to protocols which may be
adopted to reduce the spread of COVID-19 and any impact of such
protocols on Mountain Province's
business and operations, variations in ore grade or recovery rates,
changes in market conditions, changes in project parameters, mine
sequencing; production rates; cash flow; risks relating to the
availability and timeliness of permitting and governmental
approvals; supply of, and demand for, diamonds; fluctuating
commodity prices and currency exchange rates, the possibility of
project cost overruns or unanticipated costs and expenses, labour
disputes and other risks of the mining industry, failure of plant,
equipment or processes to operate as anticipated.
These factors are discussed in greater detail in Mountain Province's most recent Annual
Information Form and in the most recent MD&A filed on SEDAR,
which also provide additional general assumptions in connection
with these statements. Mountain
Province cautions that the foregoing list of important
factors is not exhaustive. Investors and others who base themselves
on forward-looking statements should carefully consider the above
factors as well as the uncertainties they represent and the risk
they entail. Mountain Province
believes that the expectations reflected in those forward-looking
statements are reasonable, but no assurance can be given that these
expectations will prove to be correct and such forward-looking
statements included in this news release should not be unduly
relied upon. These statements speak only as of the date of this
news release.
Although Mountain Province
has attempted to identify important factors that could cause actual
actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors
that cause actions, events or results not to be anticipated,
estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Mountain
Province undertakes no obligation to update forward-looking
statements if circumstances or management's estimates or opinions
should change except as required by applicable securities laws. The
reader is cautioned not to place undue reliance on forward-looking
statements. Statements concerning mineral reserve and resource
estimates may also be deemed to constitute forward-looking
statements to the extent they involve estimates of the
mineralization that will be encountered as the property is
developed.
Further, Mountain Province
may make changes to its business plans that could affect its
results. The principal assets of Mountain
Province are administered pursuant to a joint venture under
which Mountain Province is not the
operator. Mountain Province is
exposed to actions taken or omissions made by the operator within
its prerogative and/or determinations made by the joint venture
under its terms. Such actions or omissions may impact the future
performance of Mountain Province.
Under its current note and revolving credit facilities Mountain Province is subject to certain
limitations on its ability to pay dividends on common stock. The
declaration of dividends is at the discretion of Mountain Province's Board of Directors,
subject to the limitations under the Company's debt facilities, and
will depend on Mountain Province's
financial results, cash requirements, future prospects, and other
factors deemed relevant by the Board.
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SOURCE Mountain Province Diamonds Inc.