Mountain Province Reports First Sale of Diamonds From Gahcho Kué For $6.3M

(IDEX Online) – Mountain Province Diamonds Inc. reported the sale of approximately 49,420 carats for $6.27 million with an average price of around $127 per carat from the first diamond sale of goods from the Gahcho Kué mine, the firm said in a report on production results for the fourth quarter ended December 31.

The sale was held between January 16 and 25 in Antwerp. The company's next sale is scheduled to commence on February 20, and will take place once every five weeks thereafter.

During the period from August 1 to December 31, the Gahcho Kué mine processed 515,000 tonnes of kimberlite recovering 862,000 carats for an average grade of 1.67 carats per tonne. During the fourth quarter of 2016 the plant processed approximately 412,000 tonnes of ore and produced 697,000 carats on a 100 percent basis, of which the company's 49 percent share is approximately 341,000 carats.

Mountain Province President and CEO Patrick Evans commented: "Commissioning ramp up from August to early December went smoothly. Extremely cold conditions during December impacted the mine's conveyor systems, but the mining and processing progressed satisfactorily. Winterization measures to address the conveyor issues are well underway with commercial production now expected to be achieved by the end of the current quarter."

Approximately 75 percent of the parcels offered were sold. The balance, which represent smaller, predominantly brown and lower quality diamonds, were withdrawn due either to no bids being received or unacceptably low bids. This is principally a consequence of a decline in demand for smaller, lower quality diamonds, due in large part to liquidity restrictions caused by demonetization in India. The diamonds sold should not be taken as representative of the longer term realized diamond price profile, the miner said.

Evans commented: "Our first diamond sale was well attended with 96 companies bidding for individual parcels. The introduction to the market of first production from a new mine is a price discovery exercise with buyers naturally cautious. As our production volumes increase and the market becomes more familiar with our diamonds, we expect interest to grow. The level of demand for our smaller lower-quality diamonds was disappointing, but we expect improvements as Indian liquidity issues abate."

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 consists of a cluster of four diamondiferous kimberlites, three of which have a probable mineral reserve of 34.88 million tonnes grading 1.57 carats per tonne for total diamond content of 54.64 million carats.