The Gahcho Kué diamond mine that Canadian miner Mountain Province owns in partnership with Anglo American’s De Beers is set to produce between 6.6-million and 6.9-million carats in the 2019 financial year – a level also forecast for 2020.

The mine, located in the Northwest Territories, will process between 3.1-million and 3.2-million tonnes of ore in 2019 and 2020, at a production cost of between $110/t to $120/t.

The cost of production for each carat recovered is estimated to be between $50/t and $54/t in 2019, falling to between $49/t and $53/t in 2020, Mountain Province said on Tuesday.

The guidance for 2021 is to recover between 6.8-million and 7.1-million carats at a cost of $48/ct to $52/ct.

Mountain Province further reported that the mine had performed well in 2018 and that it should exceed the upper-end of its guidance of 6.6-million carats this year.

CEO Stuart Brown also reminded shareholders that 2018 had been a difficult year for diamond producers, particularly for prices of smaller, lower-quality diamonds. The company paid its maiden dividend earlier this year, but at the end of the third quarter decided not to declare another one for the year, owing to the difficult trading conditions.

Brown said, however, that there had been a slight improvement in the smaller lower goods at its most recent sale, which gives it confidence for the peak diamond retail season and for an improvement in conditions in the rough diamond market next year.

“Our forecasts for 2019 and beyond demonstrate that our operating margins remain healthy and the mine continues to generate positive free cash flow to cover all our operating costs and debt service requirements, while still being able to fund the potential expansion of the asset and continued debt reduction. Any surplus cash available after this will be considered for potential dividend payments," he noted.

Mountain Province’s share price closed 10% lower at C$1.57 a share, which is also a new 52-week low.