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Mountain Province Diamonds company in 2016-2022 and its prospects for the development until 2030

10 february 2020

Canada is in the pool of the top diamond-mining countries in the world ranking third in terms of the value of the diamonds mined. In 2018, according to the Kimberley Process, 23.2 mn carats of diamonds worth nearly $2.1 bn were mined in the country. The average price of one carat of Canadian diamonds was $90.44.

Diamond mining in Canada is carried out by De Beers Consolidated Mines and Mountain Province Diamonds Inc.

Mountain Province Diamonds Inc. is the main (49%) De Beers Canada’s partner in diamond mining at the Gahcho Kué deposit in Canada’s Northwest Territories (Figure 1).

analyt_10022020_1.png                           Image credit: Mountain Province Diamonds

Fig. 1. The Gahcho Kué diamond mining project location

Estimated diamond reserves in the field are approximately 80 mn carats. It is expected that Gahcho Kué will produce on average 4.5 mn carats per year (100%) within 12 years. During the first five years (2017-2021), the production was expected to average 5.4 mn carats per year. Thus, Gahcho Kué today is the world's largest new diamond mine that began full-scale diamond production.

Thanks to a joint venture with De Beers, the company has good opportunities to use the practical experience of a world leader in diamond production. By agreement, both companies share operating costs for the mine, and then each of them independently sells its share of the diamonds mined at the project (Fig. 2). 

analyt_10022020_2.png               Image credit: Mountain Province Diamonds

Fig. 2. Diamond mining at the Gahcho Kué mine.

In January 2017, the company announced that it had completed the first sale of diamonds mined at the Gahcho Kué project. About 49,420 carats of diamonds were sold for $6.27 mn, with an average selling price of about $127 per carat. In late November, Mountain Province Diamonds announced the results of the recent ninth diamond trading session. The company sold 280,000 carats of diamonds for $19 mn. The tender was attended by over 150 companies. Pricing during the ninth trading session was stable for the company, prices for the entire assortment were on average by about 2% higher than at the eighth tender.

Table 1 shows the technical, economic and financial figures of Mountain Province Diamonds on diamond production since reaching its design capacity in 2017 and the forecast indicators for 2020-2030.

Table 1

Diamond mining at the Gahcho Kué deposit, 2016-2022 * 

analyt_10022020_4.pngAccording to press releases, quarterly and annual reports of Mountain Province Diamonds, 2016-2020.
* The total data for the Gahcho Kué mine (Mountain Province Diamonds - 49%) is given.
** 2020-2030, forecast made by the authors.

Brief conclusions

1. Thus, among the world's second-tier diamond mining companies, Mountain Province Diamonds is a company that has gone from a junior (exploration) company to a large second-tier diamond miner comparable to PJSC ALROSA-Nyurba, now the Nyurba GOK of PJSC ALROSA.

2. The existing diamond reserves at the Gahcho Kué deposit will allow Mountain Province Diamonds to work until 2030 while maintaining the volume of ore processing and diamond mining, and at the same time, be at the level of the large second-tier companies.

3. The practical experience of organizing diamond mining at the Gahcho Kué deposit should be useful for the specialists at the ALROSA diamond mining enterprises working in similar geological conditions and extreme climates.

Yu. G. Danilov, Ph.D. in Economics, independent expert analyst

S. P. Leontyev - Senior Lecturer, the Institute of Informatics and Mathematics at the Ammosov North-Eastern Federal University