Although Gahcho Kue yielded 424,830 carats of diamonds for Mountain Province in Q1, the Canadian mine’s sale prices were lower than expected.
The Toronto-based mining company reported three sales of pre-commercial production during the first quarter. Mountain Province notes that the rough diamonds came mainly from the upper levels of the 5034 kimberlite’s northeast lobe, which has lower-quality diamonds than average. Because of this, average prices failed to meet expectations.
This being said, Mountain Province predicts that prices will rise as production shifts to the higher-value centre lobe and market conditions improve. Sales figures for the first quarter will be released on May 11.
“The unexpected headwinds from demonetization in India compounded customary weakness during the price-discovery period,” says CEO Patrick Evans, in reference to India’s invalidation of 86 per cent of currency notes. This occurrence, which took place in November, weakened liquidity from a large population of the diamond manufacturing sector.
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