All figures are expressed in Canadian dollars unless otherwise noted and are unaudited.
FY 2022 Highlights
- Adjusted EBITDA 1 of $177.2 million , up 31% relative to 2021 (2021: $135.4 million ).
- Total sales revenue at $388.9 million ( US$297.3 million ) compared to $298.3 million in 2021 ( US$237 million : sales revenue in 2021 does not include the 'upside' revenue of $10.4m from the Dunebridge agreement), at an average realized value of $146 per carat (US$112) 2021: $94 per carat (US$75) .
- During 2022 the Company repaid US$110 million in debt, US$60 million from operating cash flow and utilizing the US$50 million junior secured term loan credit facility (‘ Junior Credit Facility ')
- In December 2022 , the Company completed the refinancing transaction involving the issuance of US$195 million aggregate principal amount of its 9.000% Senior Secured Second Lien Notes due 2025 (‘ Notes '), to refinance US$189.2 million aggregate principal amount of the Company's existing 8.000% Senior Secured Second Lien Notes due 2022 (‘ Old Notes ')
- Significant discovery beside and connected to the Hearne open pit that has potential to transition Gahcho Kué to an underground producer, and potentially increasing mine life.
- Updated Technical Report filed March 2022 which featured a pre-tax/royalty NPV 7.5% attributable to Mountain Province Diamonds of $1,233 million .
Operational Highlights for Q4 and FY 2022
( all figures reported on a 100% basis unless otherwise stated )
- 1,621,800 carats recovered during the quarter at an average grade of 1.96 carats per tonne, 7% higher than the comparable quarter (Q4 2021: 1,511,253 carats at 1.86 carats per tonne). 5,519,309 carats recovered during FY 2022 at an average grade of 1.78 carats per tonne, 12% lower than the comparable period (FY 2021: 6,229,042 at 2.02 carats per tonne).
- 705,924 ore tonnes mined during the quarter, a 31% decrease on the comparable period (Q4 2021: 1,019,671). 4,113,648 ore tonnes mined during FY 2022, a 16% increase from the comparable period (FY 2021: 3,561,417).
- 828,644 ore tonnes treated during the quarter, a 2% increase on the comparable period (Q4 2021: 813,308). 3,102,219 ore tonnes treated during FY 2022, a 1% increase from the comparable period (FY 2021: 3,082,572).
- 10,144,844 total tonnes mined during the quarter, a 6% decrease on the comparable period (Q4 2021: 10,812,723). 33,947,188 total tonnes mined during FY 2022, a 4% decrease from the comparable period (FY 2021: 35,447,014).
Q4 and FY 2022 Production Statistics
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| 2022 Q4 | 2021 Q4 | YoY Variance |
Total tonnes mined (ore and waste) | 10,144,844 | 10,812,723 | -6 % |
Ore tonnes mined | 705,924 | 1,019,671 | -31 % |
Ore tonnes treated | 828,644 | 813,308 | 2 % |
Carats recovered | 1,621,800 | 1,511,253 | 7 % |
Carats recovered (49% share) | 794,682 | 740,514 | 7 % |
Recovered grade (carats per tonne) | 1.96 | 1.86 | 5 % |
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| FY 2022 | FY 2021 | YoY Variance |
Total tonnes mined (ore and waste) | 33,947,188 | 35,447,014 | -4 % |
Ore tonnes mined | 4,113,648 | 3,561,417 | 16 % |
Ore tonnes treated | 3,102,219 | 3,082,572 | 1 % |
Carats recovered | 5,519,309 | 6,229,042 | -12 % |
Carats recovered (49% share) | 2,704,461 | 3,052,231 | -11 % |
Recovered grade (carats per tonne) | 1.78 | 2.02 | -12 % |
Financial Highlights for Q4 2022
- 758,000 carats sold (Q4 2021: 809,000), with total proceeds of $96.3 million ( US$71.3 million ) compared to $85.1 million in Q4 2021, ( US$67.6 million ), at an average realised value of $127 per carat (US$94) , Q4 2021: $105 per carat, (US$84) .
- Adjusted EBITDA 1 of $23.4 million .
- Earnings from mine operations of $31.6 million .
- Cash costs of $160 per tonne treated and $82 per carat recovered, include capitalized stripping costs 1 .
- Net income of $9.4 million or $0.04 earnings per share. Included in the determination of net income for the three months ended December 31, 2022 , is an unrealized foreign exchange gain of $5 .6 million, on the translation of the Company's USD-denominated long-term debts. The unrealized foreign exchange gains are a result of the relative strengthening of the Canadian dollar versus the US dollar.
1 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 December 31, 2022 MD&A for explanation and reconciliation. |
Financial Highlights for Full Year 2022
- Total sales revenue at $388.9 million ( US$297.3 million ) compared to $298.3 million in 2021 ( US$237 million sales revenue in 2021 does not include the 'upside' revenue of $10.4m from the Dunebridge agreement) at an average realized value of $146 per carat (US$112) 2021: $94 per carat, (US$75) .
- Adjusted EBITDA 2 of $177.2 million up 31% (2021: $135.4 million ).
- Earnings from mine operations of $170.5 million (2021: earnings from mine operations $113.7 million ).
- Cash costs of production, including capitalized stripping costs 2,3 of $122 per tonne treated (2021: $110 per tonne) and $69 per carat recovered (2021: $55 per carat).
- Net income of $49.2 million or $0.23 earnings per share (2021: net income $276.2 million or $1.31 earnings per share. In 2021 there was an impairment reversal of $240.6 million , which was included in the net income figure above.) Included in the determination of net income is an unrealized foreign exchange loss of $28.2 million (2021: gain of $2.3 million ) on the translation of the Company's USD-denominated long-term debt. The unrealized foreign exchange loss is a result of the weakening of the Canadian dollar versus US dollar.
- Capital expenditures were $60.4 million , $49.7 million of which were deferred stripping costs, with the remaining $10.7 million accounting for sustaining capital expenditures related to mine operations.
2 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 December 31, 2022 MD&A for explanation and reconciliation. |
3 In FY 2022 a total of 33.9 million tonnes mined, compared to a total of 35.4 million tonnes mined in 2021; a 4% decrease year over year. |
Market Highlights for Q4 and Full Year 2022
In Q4 2022, 758,000 carats were sold at an average value of $127 per carat ( US$94 per carat) for total proceeds of $96.3 million ( US$71.3 million ) in comparison to 808,750 carats sold at an average value of $105 per carat ( US$84 per carat) for total proceeds of $85.1 million ( US$67.6 million ) in Q4 2021.
During FY 2022, 2,657,000 carats were sold at an average value of $146 per carat ( US$112 per carat) for total proceeds of $388.9 million ( US$297.3 million ) in comparison to 3,158,429 carats sold at an average value of $94 per carat ( US$75 per carat) for total proceeds of $298.3 million ( US$237 million : sales revenue in 2021 does not include the 'upside' revenue of $10.4m from the Dunebridge agreement in FY 2021).
In 2022 the Company recorded its highest annual revenues since commencement of operations. Price performance was strong, with the Company benefitting from favourable production characteristics in its recovered diamonds and the ability of the Company to capitalize on a positive market price environment, particularly for smaller size diamonds.
The first quarter of 2022 saw exceptional price growth for rough diamonds but uncertainty following Russia's invasion of Ukraine and extended delays to China's covid recovery weighed upon market sentiment during Q2 and Q3. The impact of these challenges to the Company's diamond prices were mitigated by strategically stocking weaker performing diamond categories during this time.
Stability returned to the market during Q4 and the Company saw solid price performance at its final sales of the year and into 2023. Price performance has been particularly positive for smaller sized diamonds which represent greater than 40% of the Company's production value.
The Company's rough tenders continue to attract strong competition from a large base of regular customers and a high level of competition is generated for all product segments.
2024 Production Outlook
The Company wishes to provide the following production outlook for 2024. While some additional carats have come into the plan, the aggregate quantity across the Life-of-Mine is not materially different from the NI 43-101 Technical Report filed in March 2022 . Work has been done in order to smooth the production profile via mine sequence optimization. The Company will continue to review both 2024, and the entire Life-of-Mine plan in our normal strategic business plan process during 2023 to seek further optimization and improvement. The 2024 production outlook is as follows:
2024: 4.0 million to 4.4 million carats
Mountain Province Diamonds President and CEO Mark Wall commented :
"2022 was a transitional year for the company. We repaid US$110 million in debt, US$60 million from operating cash flow and utilizing the US$50 million Junior Credit Facility, leading to a significantly improved debt to EBITDA ratio, and refinanced our bonds with a 9% coupon and with no dilution to equity holders. We also discovered the Hearne Northwest Extension which has led us to review the underground potential of the Gahcho Kué mine, including how the Kennady assets may integrate into this scenario, with the objective of understanding the opportunities that may exist to substantially extend the mine life.
As we move into 2023, we continue to focus on safety, sustainability, and operational performance at the mine level. We'll continue to optimize our sales pipeline, and focus on our organic growth opportunities at the mine and at Kennady North. On the financial side of things, we are striving to improve our balance sheet by working on reducing debt directionally towards a 1:1 debt to EBITDA ratio to enable a disciplined approach to capital allocation.
We have taken the additional step of providing an outlook for 2024 where we have seen production that was in our study in the low three million carat range substantially improved, and we will continue to review as we work through the planning process."
Hearne Drilling Update
The Hearne Northwest Extension was discovered in late 2021, when kimberlite measuring 25 meters in a bench face was exposed during routine mining operations. A delineation drilling program was subsequently launched with initial results reported last year (see news release, July 18, 2022 ). Drilling of the Hearne Northwest Extension as at the end of 2022 totaled 16 drillholes and 5,026 meters. Ten of the sixteen drillholes had significant kimberlite intersections that have been used to model the Hearne Northwest Extension (see news release, November 30, 2022 ). Phase two drilling started in early 2023 with 13 drillholes planned (5,580 meters total) of which three have been completed. Two drillholes intersected HK and HK transitional kimberlite. Logging, petrographic, mineral chemistry and microdiamond analysis is underway to properly define the HK and TK contacts in the extension and their relationship to the main Hearne kimberlite. Details for the 2023 drilling results are provided in the table below.
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Drill Hole | Azimuth 2 | Inclination 2 | Kimberlite Intersect 1,2 (m) | Initial | End of |
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From | To | Length 1 | Rock ID 2 | Hole 2 (m) |
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MPV-22-609C | 227 | -61.5 | 366.4 | 423.8 | 57.4 | HK | 477 |
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MPV-22-610C | 268 | -68 | 340.3 | 390.9 | 50.6 | HK | 428 |
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MPV-23-612C | 257 | -51 | -- | -- | -- | -- | 402 |
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1 Intersects are not true thicknesses. 2 Initial measurements and rock ID may change with further logging. HK = hypabyssal kimberlite; TK = fragmental kimberlite; TK/HK = intervals of both HK and TK |
The results of this ongoing drill program will inform the next stage of study on potential underground mining at Gahcho Kué. Results, interpretation and decisions regarding next steps are expected to be complete by the end of Q3 of 2023.
Gahcho Kué Mine Operations
The following table summarizes the key operating statistics for Q4 2022 and FY 2022, and the previous year, at the Gahcho Kué Mine.
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| Three months ended | Three months ended | Year ended | Year ended |
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| December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 |
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GK operating data |
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Mining |
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*Ore tonnes mined | kilo tonnes | 706 | 1,019 | 4,114 | 3,561 |
*Waste tonnes mined | kilo tonnes | 9,439 | 9,794 | 29,833 | 31,886 |
*Total tonnes mined | kilo tonnes | 10,145 | 10,813 | 33,947 | 35,447 |
*Ore in stockpile | kilo tonnes | 1,759 | 748 | 1,759 | 748 |
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Processing |
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*Ore tonnes processed | kilo tonnes | 828 | 814 | 3,102 | 3,102 |
*Average plant throughput | tonnes per day | 9,303 | 8,848 | 8,593 | 8,593 |
*Average diamond recovery | carats per tonne | 1.96 | 1.86 | 1.78 | 2.02 |
*Diamonds recovered | 000's carats | 1,621 | 1,511 | 5,519 | 6,229 |
Approximate diamonds recovered - Mountain Province | 000's carats | 794 | 740 | 2,704 | 3,052 |
Cash costs of production per tonne of ore, net of capitalized stripping ** | $ | 101 | 77 | 89 | 89 |
Cash costs of production per tonne of ore, including capitalized stripping** | $ | 160 | 111 | 122 | 110 |
Cash costs of production per carat recovered, net of capitalized stripping** | $ | 52 | 42 | 50 | 44 |
Cash costs of production per carat recovered, including capitalized stripping** | $ | 82 | 60 | 69 | 55 |
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Sales |
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Approximate diamonds sold - Mountain Province*** | 000's carats | 758 | 809 | 2,657 | 3,158 |
Average diamond sales price per carat | US | $ 94 | $ 84 | $ 112 | $ 75 |
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* at 100% interest in the GK Mine |
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**See Non-IFRS Measures section |
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***Includes the sales directly to De Beers for fancies and specials acquired by De Beers through the production split bidding process |
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Financial Performance
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| Three months ended | Three months ended | Year ended | Year ended |
(in thousands of Canadian dollars, except where otherwise noted) | December 31, 2022 | December 31, 2021 | December 31, 2022 | December 31, 2021 |
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Sales | $ | 96,315 | 85,144 | 388,853 | 308,723 |
Carats sold | 000's carats | 758 | 809 | 2,657 | 3,158 |
Average price per carat sold | $/carat | 127 | 105 | 146 | 98 |
Cost of sales per carat* | $/carat | 85 | 66 | 82 | 62 |
Earnings from mine operations per carat | $ | 42 | 39 | 64 | 36 |
Earnings from mine operations | % | 33 % | 37 % | 44 % | 37 % |
Selling, general and administrative expenses | $ | 5,476 | 5,467 | 17,171 | 13,858 |
Impairment reversal on property, plant and equipment | $ | - | 240,593 | - | 240,593 |
Operating income | $ | 25,257 | 265,491 | 141,027 | 334,916 |
Net income for the period | $ | 9,421 | 237,619 | 49,195 | 276,167 |
Basic and diluted earnings per share | $ | 0.04 | 1.13 | 0.23 | 1.31 |
Conference Call
The Company will host its quarterly conference call on Wednesday, March 23rd, 2023 at 11:00am ET .
Title: Mountain Province Diamonds Inc Q4 Earnings Conference Call
Conference ID: 95971630
Date of call: 03/23/2023
Time of call: 11:00 Eastern Time
Expected Duration: 60 minutes
Webcast Link: https://app.webinar.net/Vq63nNZnRkK
Participant Toll-Free Dial-In Number: (+1) 888-390-0546
Participant International Dial-In Number: (+1) 416-764-8688
A replay of the webcast and audio call will be available on the Company's website.
About the Company
Mountain Province Diamonds is a 49% participant with De Beers Canada in the Gahcho Kué diamond mine located in Canada's Northwest Territories . The Gahcho Kué Joint Venture consists of several kimberlites that are actively being mined, developed, and explored for future development. The Company also controls over 113,000 hectares of highly prospective mineral claims and leases surrounding the Gahcho Kué Mine that include an Indicated mineral resource for the Kelvin kimberlite and Inferred mineral resources for the Faraday kimberlites. Kelvin is estimated to contain 13.62 million carats (Mct) in 8.50 million tonnes (Mt) at a grade of 1.60 carats/tonne and value of US$63 /carat. Faraday 2 is estimated to contain 5.45Mct in 2.07Mt at a grade of 2.63 carats/tonne and value of US$140 /ct. Faraday 1-3 is estimated to contain 1.90Mct in 1.87Mt at a grade of 1.04 carats/tonne and value of US$75 /carat. All resource estimations are based on a 1mm diamond size bottom cut-off.
For further information on Mountain Province Diamonds and to receive news releases by email, visit the Company's website at www.mountainprovince.com .
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 Matthew MacPhail , P.Eng., MBA, and Tom E. McCandless , Ph.D., P.Geo., both employees of Mountain Province Diamonds and Qualified Persons 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.
• During 2022 the Company repaid US$110 million in debt, US$60 million from operating cash flow and utilizing the US$50 million junior secured term loan credit facility (‘Junior Credit Facility')
• In December 2022 , the Company completed the refinancing transaction involving the issuance of US$195 million aggregate principal amount of its 9.000% Senior Secured Second Lien Notes due 2025 (‘Notes'), to refinance US$189.2 million aggregate principal amount of the Company's existing 8.000% Senior Secured Second Lien Notes due 2022 (‘Old Notes')
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SOURCE Mountain Province Diamonds Inc.
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