Mountain Province Diamonds (TSE:MPVD) detailed a sharp operational improvement late in 2025 alongside significant financial losses and ongoing liquidity strain, as executives discussed fourth-quarter and full-year results on an April 1 webcast.
Operations: record safety and a Q4 production surge
President and CEO Jonathan Comerford said 2025 was expected to be “a challenging year” as the Gahcho Kué joint venture (49% Mountain Province, 51% De Beers) processed lower-grade ore during the first three quarters while preparing the higher-grade 5034 NEX ore body.
Comerford said production was weighted heavily to the back half of the year as higher-grade ore reached the plant. From January through September 2025, the mine produced about 2.5 million carats at an average grade of less than 1 carat per ton. In the fourth quarter, production “picked up sharply,” with nearly 1.9 million carats recovered at a grade of 2.25 carats per ton. He added that daily production rose from about 9,000 carats at the start of the year to roughly 25,000 carats per day in November and December, and said the strong performance has continued into 2026.
However, Comerford noted that the size distribution skewed smaller than expected, meaning “the smaller stones, which are currently under pressure in the markets, made up a greater proportion of the overall carat production.”
On mining activity, he said the operator moved 38.7 million tons of material in 2025, ahead of budget and guidance and more than 17% above 2024, with access to the high-grade NEX ore body achieved as planned.
Diamond market: tariff uncertainty and geopolitical shocks
Management repeatedly emphasized difficult market conditions, particularly for smaller stones. Comerford said the diamond market “remains very tough,” with positive signals “offset by external factors.” He cited U.S. tariffs adding uncertainty and said conflict in the Middle East has affected consumer confidence, impacting key trading centers including Israel and Dubai.
VP of Diamond Sales and Marketing Reid Mackie said market sentiment entering 2026 was cautious amid uncertainty over U.S. tariffs and the pending sale of De Beers. He said early signs of improvement in the rough market were later undermined as war in the Middle East and tariff uncertainty pushed the market back into a “wait and see mindset.” Mackie characterized the current hesitation as “based more on logistical disruptions rather than structural market shifts.”
Mackie pointed to supportive indicators in downstream demand, including U.S. holiday retail sales exceeding $1 trillion for the first time, with year-over-year growth estimated between 3.5% and 4.2%. He said the jewelry component was up 1.6%, and noted the National Retail Federation forecast that 2026 U.S. retail sales would grow 4.4% over 2025. He also cited solid demand and growth in the Americas, Japan, and Hong Kong, and said Chinese jewelry retailers reported improved performance in the fourth quarter.
On lab-grown diamonds, Mackie said the category continues to grow but at a slowing rate, “primarily in the U.S. at commercial retailers.” He contrasted that with “the rest of the world,” where he said natural diamonds retain strong consumer preference, including in India and China. He also described what he called signs of renewed differentiation toward natural diamonds as elevated luxury, citing changes at retailers “such as Blue Nile” and pointing to a widening price gap between natural and lab-grown products.
Financial results: losses widen amid weak pricing and impairments
CFO Steven Thomas said diamond prices fell notably in the second half of 2025, affecting results beyond revenue. He said the company sold more carats in Q4 after processing higher-grade NEX ore, with carats sold approximately 50% higher than in each of the first three quarters. Despite that volume lift, he said the average selling price in Q4 was $52 per carat, unchanged from Q3.
Thomas attributed continued market uncertainty in part to “the 50% tariff on Indian rough diamond imports into the U.S. in place at that time.” For the full year 2025, he reported an average selling price of $59 per carat, which he said was lower than any quarter since the mine opened except for the second half of 2025 and Q2 and Q3 of 2020 when retail markets were closed due to COVID-19.
He said Q4 pricing drove “significant write-downs of diamond inventory and ore stockpiles,” increasing production and depreciation costs. He also described how ore stockpile movements affected cost recognition versus the prior year, noting that ore stockpile tons remained broadly unchanged since mid-year but declined by 1.8 million tons in the first half of 2025. That decline released previously capitalized costs into production costs, unlike 2024 when stockpiles increased and costs were capitalized.
Thomas reported a loss from mine operations in Q4 2025 of $50.2 million, contributing to a full-year loss of $154 million, compared with a $13 million loss in Q4 2024 and full-year profit of $18.4 million in 2024. He also disclosed a material impairment charge of $103 million in Q4, equal to a net $90 million after an offsetting deferred tax recovery, and said additional audit work by KPMG related to that calculation delayed the earnings call.
Adjusted EBITDA fell sharply year over year, with Thomas reporting adjusted EBITDA of $4.8 million in 2025, a 3% margin, versus $91 million in 2024, a 34% margin. Net loss after tax was $151.6 million in Q4 and $279.5 million for the full year, compared with an $80.8 million loss in 2024. Loss per share was $1.32 for 2025 versus $0.38 in 2024, he said.
Cash flow from operating activities was an inflow of $9.1 million in Q4 2025 and an outflow of $22.1 million for the full year, compared with a $79.8 million inflow in 2024, according to Thomas. He later added that operating cash flow was an outflow of $59 million for 2025 compared with $15.5 million in 2024, and said debt funding of $89 million helped explain the difference between operating loss and the closing cash movement, resulting in a year-end cash balance of $2.3 million.
On costs, Thomas said revenue in Q4 and full-year 2025 declined significantly versus 2024, with average prices down 18% year-over-year and volumes down 31%. Cost of sales totaled CAD 310 million in 2025 versus CAD 249 million in 2024. On a normalized basis and considering higher write-downs, he said underlying costs increased about 20% year over year. Cash production costs were $76 per carat and $93 per ton for full-year 2025 versus $60 per carat and $77 per ton in 2024.
Liquidity and joint-venture funding: unpaid cash calls and in-kind elections
Comerford said the company received “vital support” during 2025 from its largest shareholder, Dermot Desmond, during a period of low grades and challenging diamond prices. After year-end, Comerford said the company was unable to meet its share of mining costs, which he said were particularly high in the first half due to the winter road, leading De Beers to make “in-kind elections” previously announced. He said Mountain Province was working with partners to resolve outstanding payments and hoped to provide updates in coming weeks.
Thomas provided additional detail, stating unpaid cash calls due to the operator at year-end totaled CAD 30.6 million. He said De Beers financed cash calls at times during the year by withdrawing funds from the company’s portion of the decommissioning restricted cash balance or by using an overdraft facility available to the operator. He added that, subsequent to year-end, De Beers issued in-kind election notices (IKEs) tied to unpaid cash calls that must be paid within 60 days to avoid an event of default under the joint venture agreement. Where the first IKE became due, Thomas said De Beers agreed to issue new IKEs for any unpaid balance on the original IKE while discussions continued on resolving the issue and broader joint venture matters.
Comerford also said the joint venture partners decided earlier in the year to postpone the Tuzo Phase III project “allowing us to manage liquidity and preserve optionality.”
Other balance sheet and financing items
Thomas said the year-end balance sheet reflected a CAD 103 million reduction in property, plant, and equipment due to the non-cash impairment charge, which he said “effectively accelerates future depreciation charges.” He also outlined financing raised during the year, including a $40 million bridge credit facility that was fully drawn in July and a $23.6 million working capital facility that was fully drawn during Q2 2025.
He said accounts payable rose to CAD 126 million at year-end 2025 from CAD 65 million at year-end 2024, citing two main factors:
- CAD 24 million of accrued interest on senior secured notes, with lenders agreeing to forgo payment until June 2026.
- CAD 30.6 million of unpaid cash calls due to the operator at year-end.
Working capital decreased by $50 million during Q4 to negative $70 million, compared with negative $120 million at the end of 2024, Thomas said. He also noted that long-term liabilities increased substantially year over year, describing them as primarily the translated value of U.S.-denominated senior secured notes and a junior credit facility, alongside a higher discounted decommissioning liability.
In closing remarks, Comerford reiterated record safety performance, the late-year production rebound, and continued operational strength into early 2026, while emphasizing that the diamond market and liquidity situation remain challenging. The company did not provide details on the value of a March 17 diamond auction during the Q&A, with Thomas saying it would be disclosed with first-quarter results.
About Mountain Province Diamonds (TSE:MPVD)
Mountain Province Diamonds Inc is engaged in the discovery and development of diamond properties in Canada’s Northwest Territories. The company holds interests in Gahcho Kue Diamond Mine in Canada’s Northwest Territories as a joint venture partner with De Beers Canada. Its other projects include the Kennady North which covers a portion of the southeastern Slave Geological Province, an Archean terrain.
