Mountain Province Diamonds Inc. announced the FY 2016 results, reporting a net income of $3.6 million (CAD 4.8m) compared with a net loss of $32.4 million (CAD 43.2m) in 2015. The change is primarily a result of a strong Canadian to U.S. dollar exchange. The company did report a net loss of $6.2 million (CAD$8.3m) in its fourth quarter.
As of December 31, the company had drawn $332 million of the US$370 million Loan leaving a balance of $13 million to be used to cover the June and September 2017 interest payments. Mountain Province production in the Q1 of 2017 was lower than previously anticipated, the company will require additional waivers in respect of other reserve account funding requirements at the end of September, 2017. “As previously reported, winterization issues impacting the mine conveyor systems affected the ramp-up to commercial production, but these issues have now been largely resolved with the build-up to full production expected to be achieved by midyear,” said Mountain Province CEO Patrick Evans.
To date three diamond sales have taken place in Antwerp, leaving Evans feeling “good, but rough diamond buyers remain cautious bidding for production from a new mine.” The results of the sales will be announced in the company’s first quarter financial results of 2017. He believes the price discovery period will extend to midyear, when the first production will be sold to the polished market. India’s Demonetization had an impact on both demand and prices achieved at the early sales of ramp-up diamond production. “As liquidity returns to the Indian diamond sector, we expect to see improved demand and pricing for our production.” Evans concluded: “Having declared commercial production this month, the Company expects to be able to provide 2017 production and revenue guidance during the second quarter of 2017.”