Mountain Province Diamonds (MPVD) Q3 2024 earnings summary

Executive summary

• Achieved Q3 2024 Adjusted EBITDA of CAD 17.3 million and CAD 91.3 million for the first nine months, with strong operational focus on safety and plant throughput, despite challenging diamond market conditions and lower prices year-over-year.

• Processed 14% more ore tons in the first nine months of 2024 compared to 2023, with cost per ton treated down to $112 from $142 year-over-year.

• Maintained a strong safety record, approaching three million hours lost-time injury-free and a 50% improvement in Total Recordable Injury Frequency Rate year-to-date.

• Company faces material uncertainties regarding its ability to continue as a going concern due to forecasted cash flow shortfall and upcoming debt maturities.

• Board approved the interim financial statements on November 6, 2024.

Financial highlights

• Q3 2024 revenue was CAD 69.4 million from 680,000 carats sold at $75 per carat, compared to CAD 60.3 million from 479,000 carats at $95 per carat in Q3 2023.

• For the first nine months, 2.18 million carats sold at $73 per carat generated CAD 215.7 million, down from 1.8 million carats at $103 per carat and CAD 248.8 million in 2023.

• Net loss after tax for Q3 2024 was $19 million (loss of $0.09 per share), compared to a $13.4 million loss in Q3 2023; year-to-date net loss is $18.6 million versus a gain of $32.1 million in 2023.

• Q3 2024 cash flow from operating activities was $56 million, significantly above Q3 2023, but year-to-date cash flow is about two-thirds of 2023's level.

• Inventories increased to $217.6 million from $187.2 million at year-end 2023.

Outlook and guidance

• Management expects diamond market recovery in 2025, with macro factors and supply constraints supporting price improvement.

• Full-year cost guidance for 2024 remains at $124-$136 per ton treated, with current performance tracking well within this range.

• Updated technical report projects robust business through 2026, with 2025 production similar to 2024 and a focus on accessing the high-value NEX ore body.

• Management forecasts a cash flow shortfall over the next 12 months, with insufficient cash and operational cash flows to meet obligations, including $177 million USD in senior secured notes maturing December 2025.

• Company will need to secure additional financing or renegotiate debt terms; there is no assurance such options will be available or on acceptable terms.