Irish Billionaire Provides Liquidity Lifeline for Mountain Province
August 11, 20
(IDEX Online) - Canadian miner Mountain Province Diamonds plunged into the red, reporting Q2 losses of $21.8m as COVID-19 brought demand to a virtual halt.
But as the pandemic closed markets, globally, a "vital liquidity lifeline" negotiated with shareholder Dunebridge Worldwide allowed it to carry on selling.
Almost all its sales ($22.6m out of £25m) were to Dunebridge, the Bahamas-registered company owned by Irish billionaire Dermot Desmond, 69, whose diverse holdings include a share of Scotland's Celtic football club.
It agreed to buy up a total of $50m of rough at the market-related prices and pay Mountain Province its share of the profits when it sold it on. Mountain Province was unable to hold any formal sales during Q2.
"The agreement with Dunebridge has provided the company with a vital liquidity lifeline," said Stuart Brown, president and CEO. The company remains cautious with respect to COVID-19 as travel, self-imposed trading bans, and limited retail trading are likely to remain in effect for the short term.
"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."
He said there were signs that the markets were recovering.
"We believe the market will start improving later in the third quarter of this year and strengthen with the start of the major retail season towards the end of the year and into 2021," he said.
In Q2 of 2019 the company, which jointly operates the the Gahcho Kué mine (pictured), in Northwest Territories, with De Beers Canada Inc, made a $7.7m profit.