Business

Dermot Desmond’s diamond mining firm has net loss of nearly €30m in ‘challenging year’

Irish businessman owns about 36% of listed Canadian miner Mountain Province Diamonds alongside a chunk of its debt

Dermot Desmond is a large shareholder in the company, which jointly owns the Gahcho Kué mine in Canada with diamond giant De Beers. Photograph: iStock

Barry J Whyte
Tue Apr 2 2024 - 17:49

Mountain Province Diamonds, the listed Canadian diamond mining company in which Dermot Desmond is a large shareholder, had a net loss of 43.7 million Canadian dollars (€29.9 million) in 2023, new company filings show.

The company, which jointly owns the Gahcho Kué mine in Canada with diamond industry giant De Beers, had total sales for the year worth C$328.6 million compared to C$388.9 million in 2022. That was based on the sale of 2.7 million carats worth of diamonds at an average value of C$121 per carat, compared to the 2.6 million carats of diamonds it sold in 2022 at a price per carat of C$146.

After costs – including a C$104.6 million write-down in the value of some assets – it had a loss for the year, compared to a profit the previous year of C$49.2 million.

The company said 2023 had been “more challenging for the diamond industry” after a record year in 2022. It said retail activity and consumer demand “softened in the US and Europe amid global inflation concerns and ongoing conflict in Ukraine and the Middle East”.

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It added that “Chinese retail remained persistently quiet”. Towards the end of the year, big producers had postponed or cancelled sales to await more favourable market conditions.

Chief executive Mark Wall said that, in such a softening market, it had “made the prudent decision to limit discretionary spending, including continuing internal studies on a potential transition to underground mining at Gahcho Kué to extend mine life”.

The company had also paid down US$18 million in senior secured second lien notes – a form of corporate debt – and “would have preferred to pay down more”.

He warned that 2024 would prove to be a lower production year “due to the effects of mine sequencing and grade profile changes, all normal occurrences in open pit diamond mining”.

[ Sales drop at Dermot Desmond’s Canadian diamond miner ]

Mr Wall said the “mine remains on track to achieve the previously stated 2024 production guidance of 4.2 to 4.7 million carats”, of which it would sell between 2.3 and 2.6 million itself.

Mr Desmond is the largest shareholder in Mountain Province, with about 36 per cent of the shares. He also holds large tranches of the company’s debt, having had to step in several times over recent years to support the company through difficult periods in the diamond sector.

Mountain Province’s share price has fallen significantly in recent years. It currently trades at about 22 Canadian cents a share on the Toronto Stock Exchange.

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