VANCOUVER (miningweekly.com) – The Gahcho Kué diamond mine, in Canada’s Northwest Territories, has demonstrated strong cash flow generating capabilities over the operation’s first two commercially active financial quarters.

Toronto-based miner Mountain Province Diamonds on Monday stressed that 2017 was a milestone year for the company, as it made a shift from development to commercial production.

For the second half of 2017, Mountain Province reported adjusted earnings before interest, taxes, depreciation and amortisation of C$56.6-million, underscoring the cash flow generating capabilities of the operation, in which it owns a 49% stake, with De Beers Canada owning the balance and being the operator.

Mountain Province sold 1.98-million carats in 2017, and total sales amounted to C$238-million, of which C$68-million was capitalised as pre-commercial production revenue and C$170-million revenue in the statement of comprehensive income. That works out to an average full-year realisation of $70/ct.

Since declaring commercial production on March 1, 2017, the Gahcho Kué mine has treated 2.78-million tonnes of ore through the process plant and recovered 5.93-million carats, on a 100% basis. That translates to an average recovered grade of 2.14 ct/t. This recovered grade is about 32% above the original budget for the year ended December 31, the company advised.

Net profit rose 257% to C$17.15-million, or C$0.11 a share, up from C$4.8-million, or C$0.03 a share in 2016.

During December, Mountain Province completed an offering of $330-million in senior secured second lien notes, using the proceeds to fully retire the company’s project lending facility and pay out historical sunk cost amounts owing to De Beers.

As at December 31, the company had cash totalling C$43.1-million and net working capital of C$96.8-million. It also has an undrawn $50-million revolving credit facility at its disposal.

For 2018, Mountain Province expects to produce between 6.3-million and 6.6-million carats recovered at an average grade of 2.02 ct/t to 2.12 ct/t.