Mountain Province Diamonds announces Q2 and H1 2020 results

Mountain Province Diamonds Inc. released its financial and operating results for Q2 2020 and H1 2020 ended June 30, 2020, as per the miner’s press release. All figures are expressed in Canadian dollars.
During Q2 2020, operations at the mine indicate that 786,000 tonnes were treated, an 11% decrease from the 882,000 tonnes treated in Q2 2019, while 1,547,000 carats were recovered at an average grade of 1.97 carats per tonne, an 11% decrease compared to the 1,730,000 carats recovered at 1.96 carats per tonne of Q2 2019. A total of 6,836,000 total tonnes were mined, a 37% decrease from 10, 865,00 total tonnes mined in Q2 2019.
 Financial results in Q2 2020 indicate that Revenue from 757,000 carats sold at $34 mln at an average realised the value of $45 per carat compared to $95.8 mln from 1,077,000 carats sold in Q2 2019 at an average realized value of $89 per carat. Adjusted EBITDA1 registered $23.9 mln compared to $39.1 mln in Q2 2019, entirely due to market conditions as a result of the COVID-19 pandemic. Loss from mine operations recorded $35.8 mn compared to earnings from mine operations of $17.8 mln in Q2 2019. Cash costs of production, including capitalized stripping costs1 of $125 per tonne treated as aginst $106 per tonne in 2019; and $63 per carat recovered compared to $54 per carat in 2019.
The cost is higher in Q2 2020 compared to the same period last year mainly due to the lower volumes of ore treated and additional costs related to safety measures put in place as a result of COVID-19.
Net loss at Q2 was $26.8 mln or $0.13 loss per share (2019: net income $10.3 million or $0.05 earnings per share). Included in the determination of the net loss at June 30, 2020, are unrealized foreign exchange gains of $13.4 mln, on the translation of the Company's USD-denominated long-term debt. The unrealized foreign exchange gains are a result of the strengthening of the Canadian dollar versus the US dollar.
During H1 2020, 16.2 mln total tonnes were mined, a 21% decrease from the 20.4 mln total tonnes mined in H1 2019. About 1,689,000 tonnes of ore were treated in H1 2020, an 11% decrease compared to 1,753,000 tonnes treated in H1 2019.
In H1 2020, 3,202,000 carats were recovered at an average grade of 1.90 carats per tonne, 3% lower than the 3,315,000 carats of average grade 1.89 carats per tonne, recovered in H1 2019. Financial performance during H1 2020, Total sales revenue was of C$99.5 million at an average realised value of $70 per carat compared to $156 million in 2019 at an average realized value of $91 per carat. Half-year Adjusted EBITDA2 recorded $1.1 mln, down 102% from $58.8 mln in 2019. Loss from mine operations was down 17.9% to $22.1 mln compared to earnings from mine operations of $28.0 million in 2019.
Cash costs of production in H1 2020 including capitalized stripping costs2, of $103 per tonne treated as against $109 per tonne in 2019; and $54 per carat recovered as against $57 per carat in 2019. Net loss for H1 2020 was $67.7 million or $0.32 loss per share (2019: net income $12.8 million or $0.06 earnings per share).
Capital expenditures in H1 2020 were $15.7 mln, $8.9 mln of which were deferred stripping costs, with the remaining $6.8 mln accounting for sustaining capital expenditures related to mine operations.
The Company's sales during the first half of 2020 were impacted by the COVID-19 pandemic resulting in a 38% decrease compared to the same period in 2019, at $99.5 million versus $156 million in 2019. The sales of H1 2020 reflect the average realised value of $70 per carat, 23% lower than the average realized value of $91 per carat, during the same period in 2019. In Q2, the Company sold 757,360 carats at an average value of $44.92 per carat for total proceeds of $34 million
There were no formal sales held in the second quarter due to the ongoing COVID-19 impact. Markets have been heavily impacted with resultant demand for rough diamonds being extremely limited.
Stuart Brown, the Company's President and Chief Executive Officer, commented: "Our Q2 financial and operational figures have been heavily impacted by COVID-19 headwinds and associated global mitigation efforts to slow down the spread of the virus. 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.”

Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished