Dermot Desmond, a significant stockholder in Mountain Province Diamonds, a diamond mining corporation publicly traded on the Canadian market, witnessed the firm suffer a net loss of €29.9 million (C$43.7 million) in 2023, according to the recently disclosed company records.
The corporation shares ownership of the Gahcho Kué mine in Canada with diamond industry heavyweight, De Beers. The gross sales for the year stood at C$328.6 million, a decline from the previous year’s sales of C$388.9 million. The company has sold 2.7 million carats of diamonds averaging C$121 per carat. This figure is lower when compared to 2022’s 2.6 million carats that sold at a pricing point of C$146 per carat.
The firm incurred a loss in 2023 due to several expenses, including a write-down of C$104.6m in asset value. This is stark contrast to their C$49.2m profit a year ago.
The company cites 2023 as a tumultuous year for the diamond industry following a record-setting 2022. Encumbered by global inflation fears and the sustained conflict in Ukraine and Middle East, consumer demands and retail activity in Europe and America have seen a downward trend. Likewise, Chinese retail has also been noticeably quiet.
Drastic measures were taken by key producers, such as stalling sales awaiting a better market terrain. Amidst a weak market, Mountain Province Diamonds made the tactical decision to curb unnecessary spending. This includes pausing internal studies concerning potential transitions to underground mining at Gahcho Kué to prolong the mine’s lifespan.
In addition, the organisation repaid $18 million in senior secured second lien notes, which is a type of corporate debt. Mark Wall, Chief Executive indicates the company would have preferred reducing more debt.
Wall anticipates 2024 to bring lower yields due to variances in mine sequence and grade profile, common phenomena in surface diamond mining. Still, he assures the mine is in line with the prior announced 2024 production guidance. This production estimate stands between 4.2 and 4.7 million carats, with the corporation planning to independently sell between 2.3 and 2.6 million carats.
Mountain Province’s biggest stakeholder, owning approximately 36% of shares, is Dermot Desmond. In addition to being a major shareholder, he also owns substantial portions of the company’s debt, having had to intervene on numerous occasions in recent years to assist the company through tough times in the diamond industry. The share value of Mountain Province has seen a substantial decline in recent years, presently trading at approximately 22 Canadian cents per share on the Toronto Stock Exchange.