Mountain Province recorded a net loss in the second quarter as the weaker Canadian dollar inflated its debt levels.
The loss amounted to $4.8 million (CAD 6.3 million) for the three months ending June 30, compared with a $5.8 million (CAD 7.6 million) profit a year ago, it said last week. The depreciation of the Canadian currency against the US dollar since late 2017 has had a detrimental impact on the profit figures it reports, as its debts are in US dollars, while its income statements are in the local coinage, it explained. The company’s share price fell 4% Thursday after it released its results.
The loss was despite higher sales, with revenue from the Gahcho Kué mine more than tripling to $75.4 million (CAD 99.1 million) from $21.1 million (CAD 27.6 million) last year. Mountain Province began diamond recovery at the mine in late 2016, and reached commercial production in March 2017. It began recording revenue in the second quarter of 2017.
The miner sold 1.2 million carats at three tenders during the second quarter of this year, all in Antwerp, at an average price of $86 per carat.
The company also paid shareholders its first dividend of $0.03 (CAD 0.04) per share, noting positive performance at the asset, which is located in Canada’s Northwest Territories.
The company will hold two tenders in the third quarter and three in the fourth quarter. It expects to achieve production at the higher end of its forecast of 6.3 million to 6.6 million carats for the year, it said.
Mountain Province owns 49% of the Gahcho Kué mine, with De Beers holding the remaining 51%.