Mountain Province Diamonds Sees Rising Output At Gahcho Kue MineNovember 28, 18
(IDEX Online) – Mountain Province Diamonds Inc. reported that production guidance for the for the Gahcho Kué Mine in the three-year period 2019 to 2021 provides evidence of "a sustainable and smooth mining rate as the mine performance maintains a steady state".
For fiscal year 2019, 6.6 million carats – 6.9 million carats were recovered, with production costs of $110 – $120 per tonne processed, and of $50 – $54 per carat recovered.
"The mine has performed well in 2018 and there is high confidence that the tonnes treated will be on target for the year and carats recovered will be above the upper end guidance of 6.6 million carats, all of which will be achieved within the expected working cost and capital budgets stated for 2018," the miner said.
Company President and CEO Stuart Brown commented, "With the 2018 fiscal year coming to an end, we are well on our way to exceeding the upper end of our 2018 guidance. As we look forward to 2019 and beyond, our business plan demonstrates the quality of our core asset and the excellent work that the operations team has carried out over the past year; both in exceeding the targets for the current year, and building a stronger longer term business plan that should extend the life of mine beyond 2028. We will continue to build on our operational success of the past year as we further explore all opportunities within our highly prospective land package. Our forecasts for 2019 and beyond demonstrate that our operating margins remain healthy and the mine continues to generate positive free cash flow to cover all our operating costs and debt service requirements while still being able to fund the potential expansion of the asset and continued debt reduction. Any surplus cash available after this will be considered for potential dividend payments."
Brown added, "2018 has certainly been a difficult year for producers in the industry. The first half of the year was relatively calm with modest price increases seen across all categories of diamonds; however, from July onwards we have witnessed some price pressure, particularly in the smaller, lower quality diamond space. We did see a slight price improvement in the smaller lower quality goods in our recent 9th sale where we again sold all our available production. The improved sales performance was encouraging as we head into the peak diamond retail season, which if successful should hopefully translate into an improvement of confidence in the rough diamond market in 2019."
The company is also pleased to announce that the latest bid for fancies and specials was successful. Included in the lot was an exceptional 60-carat vivid yellow sawable stone, the first one of this size and quality to come from the mine. The find demonstrates the mine's potential to produce excellent, large sized, fancy colored stones. During 2018, the company performed very well in its bids for fancies and specials, winning 8 out of 9 bids [against its joint venture partner in the mine, De Beers Canada] to date with profits achieved at sales representing a material contribution to revenue during the period.
Update on Exploration Programs
2018 has been a busy year for exploration, the company previously announced (September 17) the results of the first drilling campaign with the discovery of the intersection of kimberlite ore at depth between 5034 and Tuzo. During the remainder of 2018 and into 2019, and on the back of successful work completed so far, additional drilling will be undertaken to further delineate the extension of mineralization along these ore bodies. The company has confidence in this project and further potential success could improve the longer term prospects for the Gahcho Kué Mine.
In addition to the resource extension work underway on the JV property, Mountain Province will be conducting additional enhancement work on its 100%-held Kennady properties. Drilling conducted in 2017 extended the Faraday 2 kimberlite by 150 meters to the northwest, and core from this program has been submitted to Saskatchewan Research Council for microdiamond recovery. The microdiamond data will then be used to extend the inferred resource at Faraday 2, which will be reported in early 2019. A winter 2019 exploration program is also scheduled to drill test geophysical anomalies located immediately to the southwest of the Gahcho Kué Mine.