The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Despite COVID challenges, Gahcho Kué Mine ends 2020 strong North of 60 Mining News – January 15, 2021
This exceptional 157.4 carat gem quality diamond recovered from the Gahcho Kué diamond in Northwest Territories lifted the morale of the Mountain Province team going into 2021.
After enduring the multiple challenges of being a diamond miner through the COVID-19 pandemic, Mountain Province Diamonds Inc. ended 2020 strong and is positioned well for 2021.
"Under very difficult circumstances, all driven by COVID-19, the Gahcho Kué Mine has performed well in being able to maintain production albeit at a reduced level and came very close to the revised guidance in tonnes mined and treated and exceeded the revised guidance target for carats recovered," said Mountain Province Diamonds President and CEO Stuart Brown. "The carat recovery was particularly pleasing under the circumstances and will place us in a good position for sales in the first quarter of 2021."
Mountain Province owns a 49% joint venture interest in the Gahcho Kué diamond mine in Canada's Northwest Territories – De Beers Canada Inc. owns the remaining 51%.
While reduced personnel, travel restrictions, and new operating procedures to lessen the risk of spreading COVID-19 resulted in lower production than planned, Mountain Province says it is satisfied with the performance at Gahcho Kué last year.
The Northwest Territories mine produced 6.5 million carats of diamonds during 2020. This is higher than Mountain Province's COVID-revised guidance of 6.3 million to 6.4 million ounce for the year. The company attributes this to strong operational performance during the third quarter. The fourth quarter, however, was more difficult due to cases of COVID-19 at the mine necessitating additional preventative measures affecting productivity.
In addition to the COVID-19 restrictions and protocols that challenged all North American miners, diamond producers were further confronted with closure of diamond trading floors that cut off the traditional sales venues and resulted in lowered prices for the stones.
"The diamond market came under unprecedented pressure from early March to early September and although this pressure remains, we did see a strong recovery with respect to rough diamond demand in the last quarter of the year," said Brown.
Mountain Province sold 3.3 million carats during 2020 at an average price of C$68 per carat (US$51 per carat) for total proceeds of C$227 million (US$171.3 million). While the amount of diamonds sold last year is on par with previous year sales, the per-carat price was about 19% lower than the C$84 per carat (US$63 per carat) fetched during 2019.
Sentiment in the rough diamond market, however, was more positive toward the end of 2020.
The 957,120 carats sold by Mountain Province during the fourth quarter fetched an average price of C$84 per carat (US$65 per carat) for total proceeds of $80.2 million (US$61.7 million). This was the same average price the company got for its diamonds in the fourth quarter and full-year 2019.
Adding to the more upbeat finish to 2020, Mountain Province reported the recovery a 157.4-carat exceptional quality diamond, the largest such gem ever recovered at Gahcho Kué. The company said it has already received a bid for this beautiful diamond.
"The recovery of the largest ever diamond and the successful bid was certainly a boost to the morale of the company," said Brown. "It shows that the mine, although a high-volume producer of predominantly smaller diamonds, does produce diamonds of exceptional size and quality."
Building on this morale booster, Mountain Province's medium- to long-term outlook for rough diamonds remains positive going into 2021.
"Early diamond jewelry retail sales reports are encouraging, and we expect to see steady demand for rough diamonds in the first quarter of 2021," said the Mountain Province CEO. "There will no doubt still be challenges ahead but we are certainly more positive in our outlook as we start 2021 compared to the middle of 2020."
While the company is upbeat about 2021, the company is holding off on setting production targets for the year, as it remains focused on maintaining the health of workers and managing the impacts of COVID-19 at the Gahcho Kué Mine.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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