Covid-19 Pushes Mountain Province into Red

RAPAPORT... Mountain Province reported a loss in the second quarter as the coronavirus pandemic closed markets and hit demand.The miner posted a net loss of CAD 26.8 million ($21.8 million) for the three months ending June 30, compared with a profit of CAD 10.3 million ($7.7 million) during the same period last year, the company said Wednesday. "Our [second-quarter] financial and operational figures have been heavily impacted by Covid-19," said Mountain Province CEO Stuart Brown. "These conditions severely reduced retail sales and impacted the diamond pipeline, and do not reflect normal operating or market conditions when compared to [the] same period in 2019.... The severe impact of Covid-19 meant that the market for rough diamonds came to a virtual halt in the second quarter, and we were unable to execute any normal sales."Revenue from the miner's Gahcho Ku?(C) deposit in Canada plunged 64% year on year to $25 million, as the miner sold lower rough volumes and at a weaker average price. Mountain Province sold 757,000 carats in the second quarter, at an average price of $33 per carat. During the same period last year, it sold 1.1 million carats, at an average price of $67 per carat.Some $22.6 million of its sales came from a deal with shareholder Dunebridge Worldwide, which allows the miner to sell at current market prices and receive a share of the profit when Dunebridge resells the stones. The miner sold an additional $2.4 million privately. The company has lowered its production plan by 9% due to social-distancing procedures at the mine. Revenue for the first six months of the year fell 37% to $74.2 million, while the average price dropped 24% to $52 per carat. The company reported a net loss of CAD $67.7 million ($50.9 million) compared to a profit of CAD $12.8 million ($9.6 million) over the same period in 2019.The company owns 49% of the Gahcho Ku?(C) mine, with De Beers holding the remaining 51%.Image: The ore crusher at the Gahcho Ku?(C) mine. (Mountain Province)