TORONTO and NEW YORK, May 10,
2018 /PRNewswire/ --
TSX and NASDAQ: MPVD
Mountain Province Diamonds Inc. ("Mountain Province", or the "Company") (TSX and
NASDAQ: MPVD) today announces its financial and operating results
for the quarter ended March 31, 2018.
All figures are expressed in Canadian dollars unless otherwise
noted.
Highlights
- Earnings from mine operations of $24.6
million and net income of $0.7
million or $0.00 per share for
the first quarter of 2018 with adjusted
EBITDA[1] of $33.2 million. Included in the
determination of net income is an unrealized foreign exchange loss
for the quarter of $10.3 million
on the translation of the Company's USD-denominated long-term
debt. The Company did not record any sales in the comparable
period for 2017 as sales were still credited against mine
construction costs in that period.
- Two tender sales conducted in the first quarter of 2018,
through the Company's diamond broker based in Antwerp, Belgium. Mountain Province anticipates conducting three
tender sales in the second quarter, two tender sales in the third
quarter and three tender sales in the fourth quarter.
- Total sales of $67 million
(US$52 million) in the first quarter
of 2018. Revenue was realized through the first two tender
sales of the 2018 year. Average realization in the first
quarter was $126 Canadian dollars per
carat sold (US$99 per carat).
The third sale of the year began at the end of the quarter and
closed in early April, yielding $33.3
million (US$26.4 million) in
tender sale proceeds as reported in the news release of
April 18, 2018.
- Approximately 786,000 tonnes of ore were treated through the
process plant and 1,641,000 carats recovered, on a 100% basis, for
an average recovered grade of 2.09 carats per tonne ("cpt"), in
line with budget. The Company's 49% attributable share of
diamond production for the three months ended March 31, 2018 was approximately 804,000
carats.
- Cash costs of production, including capitalized stripping
costs[1], for the three months ended
March 31, 2018 of $76 per tonne of ore processed and $37 per carat recovered.
- Pioneering waste removal at Hearne continued throughout the
quarter, and in April the first ore was mined from the Hearne
pit. The plant will begin processing Hearne ore during this
second quarter of 2018.
- Customer participation rates at the Company's two tender sales
concluded in the first quarter were very strong. The average
number of customers placing bids increased by 30% over 2017 levels
and the number of bids received per lot increased from an average
of eleven in 2017 to over fourteen this quarter. The average
number of lots per sale (164, compared with an average 125 in 2017)
was elevated due to the large number of individual fancy and
special stones which were marketed as individual stone lots.
- Quarter end cash position of $28.7
million and net working capital of $113.5 million, with the US$50 million revolving credit facility remaining
undrawn.
Cash costs of production, including capitalized stripping costs, and adjusted
EBITDA are non-IFRS measures with no standardized meaning prescribed under IFRS.
See the Non-IFRS Measures section of the Company's March 31, 2018 MD&A for
[1] explanation and reconciliation.
David Whittle, the Company's
Interim President and CEO, commented, "Mountain Province recorded a solid start to
the year, generating $33.2 million in
adjusted EBITDA in a two sale quarter. We remain on pace to
achieve our production guidance for the year. Rough diamond
markets in general continued to firm notably through the quarter,
with strong demand and price increases reported across all product
categories, supported by robust retail jewellery sales reported
from both the US and Asian markets. Ending the quarter with
$113.5 million in net working
capital, and with our US$50 million
revolver remaining undrawn, our balance sheet is strong and
growing."
Mr. Whittle continued, "Consistent with our stated commitment to
return value to our shareholders, the Board anticipates determining
and declaring our inaugural dividend in conjunction with the
preparation and release of our second quarter results."
Financial Highlights
Three months ended Three months ended
(in millions of Canadian dollars, except
where otherwise noted) March 31, 2018 March 31, 2017
Sales $ 66,565 -
Carats sold 000's carats 527 -
Average price per carat sold $/carat 126 -
Cost of sales per carat* $/carat 80 -
Earnings from mine operations per carat $ 46 -
Earnings from mine operations % 37% -
Selling, general and administrative expenses $ 3,589 3,428
Operating income (loss) $ 20,105 (3,428)
Net income (loss) for the period $ 67 (2,144)
Basic and diluted earnings (loss) per share $ 0.00 (0.01)
* This cost of sales per carat includes the cost of acquiring 51% of the fancies and specials which have been
sold, after having been won in a tendering process with De Beers.
GK Mine Operations
The following table summarizes key operating statistics for the
Gahcho Kué diamond mine (the "GK mine") in the first quarter of
2018. Cash costs of production have not been determined for
the first quarter of 2017 as mine operations were in the
commissioning and ramp-up phase through that period.
Three months ended Three months ended
March 31, 2018 March 31, 2017
GK operating data
Mining
*Ore tonnes mined kilo tonnes 741 611
*Waste tonnes mined kilo tonnes 7,461 7,059
*Total tonnes mined kilo tonnes 8,202 7,670
*Ore in stockpile kilo tonnes 796 223
Processing
*Ore tonnes processed kilo tonnes 786 492
*Average plant throughput tonnes per day 8,733 5,467
*Average diamond recovery carats per tonne 2.09 1.76
*Diamonds produced 000's carats 1,641 867
Approximate diamonds
produced - Mountain Province 000's carats 804 425
Cash costs of production per
tonne, net of capitalized
stripping ** $ 75 -
Cash costs of production per
tonne of ore, including
capitalized stripping** $ 76 -
Cash costs of production per
carat recovered, net of
capitalized stripping** $ 36 -
Cash costs of production per
carat recovered, including
capitalized stripping** $ 37 -
Sales
Approximate diamonds sold
- Mountain Province*** 000's carats 527 -
Average diamond sales
price per carat US $ 99 $ -
* at 100% interest in the GK Mine including ramp-up period
**See Non-IFRS Measures section
***Includes the sales directly to De Beers for fancies and specials acquired by
De Beers through the production split bidding process
The production results are consistent with expectations for the
annual plan and the Company is on track to achieve its full-year
2018 production guidance of 6.3 to 6.6 million carats recovered on
a 100% basis. The processing plant continues to achieve
higher throughput than originally anticipated, having achieved and
broken daily throughput records in a given 24 hour period during
the first quarter of 2018. The plant recorded an average
processing rate over the quarter of 8,733 tonnes per day, a 60%
increase over the first quarter of 2017 as the mine was ramping up
towards commercial production during the comparative period.
All ore processed during the first quarter of 2018 was sourced
from the 5034 pit. Approximately 1.9 million tonnes of waste
were mined from the Hearne pit in the quarter, as it was being
prepared for production. First ore from the Hearne pit was
mined subsequent to the quarter in April
2018, and processing of Hearne ore through the plant will
commence in the second quarter.
The winter road program was safely and successfully executed
during the first quarter. The final shipments of fuel,
explosives and other supplies arrived in early April 2018, meeting the targeted delivery
schedule.
Conference Call
Full details of the financial and operating results for the
three months ended March 31, 2018 are
described in Mountain Province's
unaudited condensed consolidated interim financial statements with
accompanying notes and related Management's Discussion and
Analysis. These documents are available on the Company's
website at http://www.mountainprovince.com and on SEDAR at
http://www.sedar.com and on EDGAR at
http://www.sec.gov/edgar.shtml. Shareholders may contact
Mountain Province at 161 Bay
Street, PO Box 216, Toronto, ON,
M5J 2S1, to request, free of charge, hard copies of the unaudited
condensed consolidated interim financial statements and related
Management's Discussion and Analysis.
The Company will host an earnings conference call for analysts
and investors on Friday, May 11, 2018, at 11:00 a.m. Eastern Time. The conference
call can be accessed using the following details. A replay of
the call will also be available on the Company's website.
Conference ID: 9788803
Date of call: 05/11/2018
Time of call: 11:00 Eastern Time
Expected Duration: 30 minutes
Participant Toll-Free Dial-In Number: 1 (866) 300-0510
Participant International Dial-In Number: +1 (636)
812-6656
Replay:
Toll-Free Dial-In: (855) 859-2056
International Dial-In: (404) 537-3406
Passcode: 9788803
Mountain Province Diamonds is a 49% participant with
De Beers Canada in the Gahcho Kué diamond mine located in
Canada's Northwest
Territories. Gahcho Kué is the world's largest new diamond
mine, consisting of a cluster of four diamondiferous kimberlites,
three of which are being developed and mined under the initial
12-year mine plan.
Qualified Person
The disclosure in this news release of scientific and technical
information regarding Mountain
Province's mineral properties has been reviewed and approved
by Keyvan Salehi, P.Eng., MBA, a
Qualified Person as defined by National Instrument
43-101 Standards of Disclosure for Mineral
Projects.
Caution Regarding Forward Looking Information
This news release contains certain "forward-looking statements"
and "forward-looking information" under applicable Canadian and
United States securities laws
concerning the business, operations and financial performance and
condition of Mountain Province Diamonds Inc.
Forward-looking statements and forward-looking information
include, but are not limited to, statements with respect to
estimated production and mine life of the project of Mountain Province; the realization of mineral
reserve estimates; the timing and amount of estimated future
production; costs of production; the future price of diamonds; the
estimation of mineral reserves and resources; the ability to manage
debt; capital expenditures; the ability to obtain permits for
operations; liquidity; tax rates; and currency exchange rate
fluctuations. Except for statements of historical fact
relating to Mountain Province,
certain information contained herein constitutes forward-looking
statements. Forward-looking statements are frequently
characterized by words such as "anticipates," "may," "can,"
"plans," "believes," "estimates," "expects," "projects," "targets,"
"intends," "likely," "will," "should," "to be", "potential" and
other similar words, or statements that certain events or
conditions "may", "should" or "will" occur.
Forward-looking statements are based on the opinions and
estimates of management at the date the statements are made, and
are based on a number of assumptions and subject to a variety of
risks and uncertainties and other factors that could cause actual
events or results to differ materially from those projected in the
forward-looking statements. Many of these assumptions
are based on factors and events that are not within the control of
Mountain Province and there is no
assurance they will prove to be correct.
Factors that could cause actual results to vary materially
from results anticipated by such forward-looking statements include
variations in ore grade or recovery rates, changes in market
conditions, changes in project parameters, mine sequencing;
production rates; cash flow; risks relating to the availability and
timeliness of permitting and governmental approvals; supply of, and
demand for, diamonds; fluctuating commodity prices and currency
exchange rates, the possibility of project cost overruns or
unanticipated costs and expenses, labour disputes and other risks
of the mining industry, failure of plant, equipment or processes to
operate as anticipated.
These factors are discussed in greater detail in Mountain Province's most recent Annual
Information Form and in the most recent MD&A filed on SEDAR,
which also provide additional general assumptions in connection
with these statements. Mountain Province cautions that the foregoing
list of important factors is not exhaustive. Investors
and others who base themselves on forward-looking statements should
carefully consider the above factors as well as the uncertainties
they represent and the risk they entail. Mountain Province believes that the
expectations reflected in those forward-looking statements are
reasonable, but no assurance can be given that these expectations
will prove to be correct and such forward-looking statements
included in this news release should not be unduly relied
upon. These statements speak only as of the date of
this news release.
Although Mountain Province
has attempted to identify important factors that could cause actual
actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors
that cause actions, events or results not to be anticipated,
estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Mountain Province undertakes no
obligation to update forward-looking statements if circumstances or
management's estimates or opinions should change except as required
by applicable securities laws. The reader is cautioned
not to place undue reliance on forward-looking
statements. Statements concerning mineral reserve and
resource estimates may also be deemed to constitute forward-looking
statements to the extent they involve estimates of the
mineralization that will be encountered as the property is
developed.
Further, Mountain Province
may make changes to its business plans that could affect its
results. The principal assets of Mountain Province are administered pursuant to
a joint venture under which Mountain
Province is not the operator. Mountain Province is exposed to actions taken
or omissions made by the operator within its prerogative and/or
determinations made by the joint venture under its terms.
Such actions or omissions may impact the future performance of
Mountain
Province. Under its current note and revolving
credit facilities Mountain
Province is subject to certain limitations on its ability to
pay dividends on common stock. The declaration of
dividends is at the discretion of Mountain Province's Board of Directors,
subject to the limitations under the Company's debt facilities, and
will depend on Mountain Province's
financial results, cash requirements, future prospects, and other
factors deemed relevant by the Board.
Mountain Province Diamonds Inc., David
Whittle, Interim President and CEO, 161 Bay Street, Suite
1410, Toronto, Ontario M5J
2S1, Phone: (416) 361-3562, E-mail: info@mountainprovince.com