With more than 25 years\u2019 experience in the diamond industry \u2014 including 19 with\u00a0De Beers\u00a0\u2013 Stuart Brown was looking for a new opportunity. He found it as the president and CEO of\u00a0Mountain Province Diamonds\u00a0(TSX: MPVD; NASDAQ: MPVD).<\/p>\n
\u201cI was quite excited by this,\u201d he said. \u201cI think the mine has good potential, because it\u2019s just starting off. I thought I could add a lot of value with my prior relationship with De Beers.\u201d Brown, whose last role at De Beers Group was as CFO and joint acting CEO, joined Mountain Province in May. Mountain Province owns 49% of the Gahcho Ku\u00e9 mine, which is 280 km northeast of Yellowknife. De Beers owns 51% and is the operator.<\/p>\n For Brown, it\u2019s not a matter making changes to the company, but rather moving its production forward and extending the life of the mine.<\/p>\n \u201cWe are in our second year of commercial production, so we are still finding our feet as producers,\u201d he said. \u201cWhen I say producers, I\u2019m talking about the Gahcho Ku\u00e9 mine. So, whether it\u2019s De Beers operating it or us, we do this together.\u201d<\/p>\n In the coming year, Brown wants to ensure that De Beers and Mountain Province are working towards the same goal.<\/p>\n \u201cOur primary objective is to add the additional resources that we are currently discovering on the joint venture property,\u201d he said.<\/p>\n Additional kimberlites have been found between 5034 and Hearne, and 5034 and Tuzo. These finds will be added to the draft mine plans, which will be published shortly.<\/p>\n \u201cIn the coming twelve months we want to do a lot more work on that,\u201d Brown said. \u201cAnd clearly that\u2019s a preference for De Beers, because it\u2019s right on our doorstep.\u201d Earlier this year, Mountain Province brought the Kelvin and Faraday kimberlites back into the company by acquiring Kennady Diamonds \u2014 which had been spun out of the company in 2012. It owns 100% of the kimberlites, which lie 8 km away from Gahcho Ku\u00e9.<\/p>\n \u201cWe need to do a little bit more work on those to upgrade them and get a better understanding on the value of the diamonds in the ground,\u201d Brown said. \u201cWe would like to bring them into the joint venture. In order to do that, we need De Beers to agree.\u201d<\/p>\n Right now, the preference is to continue evaluation of new near-mine discoveries at Gahcho Ku\u00e9.<\/p>\n \u201cOur current mine plan with De Beers is that we would go until 2028, with what we know is in our plan,\u201d he said. \u201cThen we have all of this additional (near-mine) material that we are discovering now. Over the next twelve months we will be trying to incorporate that in our design.\u201d<\/p>\n Beyond the Gahcho Ku\u00e9 property itself and Kelvin and Faraday, Brown says there is a huge amount of grassroots greenfield exploration potential on the property. Mountain Province will be investing a limited amount of money into identifying new targets.<\/p>\n However well the mining process goes, there is still the issue of selling them.<\/p>\n \u201cFor 2017, the market was quite good,\u201d he said. \u201cIt recovered well towards the end. In 2018, we saw good solid growth for the first seven months of the year.\u201d<\/p>\n He added that the market has become a little bit nervous recently, resulting in price reductions.<\/p>\n \u201cIt\u2019s not a question of oversupply that is causing prices to fall,\u201d Brown said. \u201cIt\u2019s a few external factors around the midstream financing chain where we\u2019ve seen a lack of funding in this area causing buyers not being able to participate, hence prices have dropped.\u201d<\/p>\n However, the retail demand for diamonds is strong.<\/p>\n \u201cWe are seeing such good results coming out of retail performance and predictions of good retail going into the holiday season in North American and Asia,\u201d he said.<\/p>\n Brown describes the situation as anomalous.<\/p>\n \u201cIn the large goods and the better qualities, we\u2019ve seen strong growth this year, so we believe the supply and demand fundamentals are still in the favour of the miners where there is going to be limited supply growth and demand is increasing. The retail side of the business has grown, especially in 2017, and we see 2018 will be a good solid year for retail.\u201d<\/p>\n Several diamond mines will be closing in the next couple of years, having come to the end of their natural life. This situation will work in Mountain Province\u2019s favour.<\/p>\n \u201cOur ambition at Mountain Province is to extend the life of this project beyond 2030.\u201d<\/p>\n This article appeared in The Northern Miner<\/a>, and was first published in the November 2018 issue of Diamonds in Canada.<\/em><\/p>\nIt\u2019s not a matter making changes to the company, but rather moving its production forward and extending the life of the mine.<\/q><\/p>\n
In 2018, Mountain Province brought the Kelvin and Faraday kimberlites back into the company by acquiring Kennady Diamonds \u2014 which had been spun out of the company in 2012<\/q><\/p>\n
Diamond market<\/strong><\/h3>\n