Mountain Province Diamond borrows $33 million USD to cover shutdown losses

The Gahcho Kué diamond mine located 280 kilometers northeast of Yellowknife. (Supplied by DeBeers Canada.)
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Mountain Province Diamonds, has borrowed $33 million USD to help cover lost revenue as the company reports stark financial losses.

The company, which owns and operates Gahcho Kué Diamond Mine, faced big losses after being forced to shutdown in February due to a COVID-19 outbreak.

According to company president Stuart Brown, the company was left short of cash when the shutdown and the loss of revenue coincided with the winter road resupply season, when costs are normally higher.

“The impact of the COVID-19 outbreak at the mine, and the subsequent shut down has meant that we have had to cancel our planned May diamond sale in Antwerp,” said Brown.

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Mountain Province Diamond company, who partially owns Gahcho Kué, reported net losses of $263 million in 2020. That’s nearly double the figure from 2019, when the company posted losses totalling $129 million.

The shutdown also reduced the total number of ore produced in the first quarter of the year by almost a third compared to the same period in 2020. It was also a 15 per cent decrease relative to the last quarter of 2020.

Despite the losses, Brown said he is feeling positive about the future. The company currently plans to increase the output of the mine’s ore treatment equipment, which will increase the value of the diamonds processed.

“There will, no doubt, still be issues to deal with in the coming months such as the intense second wave in India, hopefully with all the work being done and support we will see a recovery in India and all participants in the industry will benefit from the continued desire for natural diamonds,” said Brown. 

“We believe that the recovery across all sectors of the industry will continue for the remainder of 2021.”

That optimism seems to fly in the face of predictions for the mining industry in the NWT. According to a report from Canadian Northern Economic Development Agency, NWT’s diamond mines will continue to see a decline, with the industry in the NWT as a whole being “past its peak.”

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