According to Mining News Pro - “I was quite excited by this,” he said. “I think the mine has good potential, because it’s just starting off. I thought I could add a lot of value with my prior relationship with De Beers.” 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 Kué mine, which is 280 km northeast of Yellowknife. De Beers owns 51% and is the operator.
For Brown, it’s not a matter making changes to the company, but rather moving its production forward and extending the life of the mine.
“We are in our second year of commercial production, so we are still finding our feet as producers,” he said. “When I say producers, I’m talking about the Gahcho Kué mine. So, whether it’s De Beers operating it or us, we do this together.”
In the coming year, Brown wants to ensure that De Beers and Mountain Province are working towards the same goal.
“Our primary objective is to add the additional resources that we are currently discovering on the joint venture property,” he said.
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.
“In the coming twelve months we want to do a lot more work on that,” Brown said. “And clearly that’s a preference for De Beers, because it’s right on our doorstep.”
Earlier this year, Mountain Province brought the Kelvin and Faraday kimberlites back into the company by acquiring Kennady Diamonds — which had been spun out of the company in 2012. It owns 100% of the kimberlites, which lie 8 km away from Gahcho Kué.
“We 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,” Brown said. “We would like to bring them into the joint venture. In order to do that, we need De Beers to agree.”
Right now, the preference is to continue evaluation of new near-mine discoveries at Gahcho Kué.
“Our current mine plan with De Beers is that we would go until 2028, with what we know is in our plan,” he said. “Then 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.”
Beyond the Gahcho Kué 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.
Diamond market
However well the mining process goes, there is still the issue of selling them.
“For 2017, the market was quite good,” he said. “It recovered well towards the end. In 2018, we saw good solid growth for the first seven months of the year.”
He added that the market has become a little bit nervous recently, resulting in price reductions.
“It’s not a question of oversupply that is causing prices to fall,” Brown said. “It’s a few external factors around the midstream financing chain where we’ve seen a lack of funding in this area causing buyers not being able to participate, hence prices have dropped.”
However, the retail demand for diamonds is strong.
“We 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,” he said.
Brown describes the situation as anomalous.
“In the large goods and the better qualities, we’ve 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.”
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’s favour.
“Our ambition at Mountain Province is to extend the life of this project beyond 2030.”