The strong performance of the Gahcho Kué diamond mine – a joint venture between De Beers Canada and Mountain Province – is benefitting the junior company’s shareholders, who will receive their first dividend from the diamond miner.

The board of Mountain Province, which maintains listings on the TSX and Nasdaq, announced this week that shareholders would be paid a 4c-a-share dividend next month.

“The continued good performance of the mine and the cash reserves the company has generated, we have decided to declare a dividend,” said president and CEO Stuart Brown.

“The company's policy is to manage down the debt levels and to pay reasonable dividends based on available cashflows.  The level of future dividends may go up or down dependent on these cashflows which are strongly linked to realised diamond prices, as well as the covenants relating to dividend declarations under the revolving credit facility and the secured notes payable conditions," he commented.

At the end of the second quarter, Mountain Province had a cash position of C$33.5-million and net working capital of C$100.4-million, with the C$50-million revolving credit facility remaining undrawn. On June 30, the miner’s debt balance was C$433.4-million and subsequent to the quarter, C$4.02-million of debt was repaid.

Earnings from mine operations for the three- and six-months ended June 30 amounted to C$18.5-million and C$43-million, respectively. The company reported a net loss of $6.3-million for the quarter, and $6.2-million for the half year. Included in the determination of the net loss are unrealised foreign exchange losses on the translation of the company’s US-dollar denominated long-term debt.

Adjusted earnings before interest, tax, depreciation and amortisation amounted to C$40.7-million and $73.3-million for the quarter and half year, respectively.

For the six months, Gahcho Kué (on a 100% basis) treated 1.68-million tonnes of ore and recovered 3.57-million carats, for an average recovered grade of 2.12 c/t.