Mountain Province Diamond (TSX:MPVD) reported first-quarter financial results on Wednesday. The transcript from the company’s first-quarter earnings call has been provided below.
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Access the full call at https://app.webinar.net/vAmWJnBJRgB
Summary
MPVD reported a strong operating performance in Q1 2026 with higher grades, but faced a $600,000 EBITDA loss due to a weaker diamond price environment.
Total tonnes treated decreased by 18% compared to Q1 2025, yet over 2 million carats were produced, a record high for the company.
Diamond market remains challenging with geopolitical tensions and tariff uncertainties affecting sentiment; particularly, smaller diamond categories are under pressure.
The company’s working capital position is negative, though slightly improved from year-end, with significant accounts payable increases linked to winter road deliveries.
MPVD sold twice the volume of carats compared to Q1 2025, but at less than half the price, resulting in a $65.1 million net loss after tax for Q1 2026.
Management highlighted the strategic importance of navigating liquidity challenges and maintaining safety standards, working closely with stakeholders to resolve financial issues.
The company is exploring options to address liquidity challenges, including support from De Beers and working capital injections from Mr. Dermot Desmond.
Full Transcript
OPERATOR
Good morning ladies and gentlemen and welcome to the Mountain province Diamonds Inc. Q1 2026 webcast and conference call. At this time, all lines in a listen only mode. Following the presentation, we’ll conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Wednesday, May 13, 2026. I would now like to turn the conference over to Jonathan Comerford, CEO of Mountain Province Diamonds. Please go ahead.
Jonathan Comerford (President and CEO)
Good day to everyone who has dialed in to listen to our Q1 2026 results call. My name is Jonathan Comerford and I’m the President and CEO of the Company. Also present on this call is Steve Thomas, our CFO Reid Mackey, our Vice President, Diamond Sales and Marketing. At the conclusion of this presentation, the team will then be available for any questions you may have. Firstly, I would like to draw your attention to our cautionary statement regarding forward looking information. This presentation will be posted on our website for anyone who needs additional time to review this statement. Mountain Province Diamonds produces Canadian diamonds to the highest standard of corporate social responsibility and that is something that we continue to be proud of. We own 49% of the Gahcho Kué mine in the Northwest Territories with De Beers Group, a division of Anglo American plc owning the remaining 51%. Today I will speak to our Q1 2026 results and provide some insight into our operational and financial performance. Following that, Steve, our CFO will discuss the Q1 financial performance of the company and Reid will comment on the overall diamond market. I will then make some closing remarks to complete the presentation and answer any questions that you may have. I will start the review of Q1 results with safety. Gahcho Kué’s operations have continued to be lost time injury free and we are now approaching a full year without a lost time injury. The very challenging winter months are behind us and the operations are now focused on safely navigating the freshet period which is now upon us. Q1 results highlights I’m now going to run through some highlights from our first quarter of 2026. The story of Q1 is one of strong operating performance with higher grades offset by a weaker diamond price environment resulting in a 600,000 EBITDA loss for the quarter. Turning first to the operations, total tonnes treated in Q1 2026 were down 18% compared to the same period in 2025. Despite this, we delivered a record quarter in terms of carats recovered with over 2 million carats produced on the mining side. Total tonnes mined were also lower year on year. This reduction reflects both the challenging winter conditions and by the joint venture partners to pause mining at Tuzo with a focus on conserving cash and maintaining operational flexibility. Importantly, grade in Q1 was 2.64 carats per tonne compared to 0.82 carats per tonne in Q1 2025. We continue to outperform budget on grade. However it is worth noting that the size frequency distribution has been below expectations with a greater proportion of recovered stones in the small categories which are currently under the most pressure in the market. In summary, operation safety performance these remain strong and carat recovery is ahead of plan despite lower tonnes treated and reduced mining rates. Turning briefly to the diamond market, Reid will cover this in more detail. At a high level the market remains very challenging with ongoing uncertainty around US tariffs and geopolitical tension in the Middle east weighing on sentiment on in kind elections and stakeholder discussions. We are in the middle of a critical and sensitive process. While I appreciate the importance of this topic, I’m not in a position to provide further detail at this stage. I would however like to thank the government for its support to the diamond industry, De Beers for its patience in allowing the company time to resolve its liquidity issue, and Mr. Dermot Desmond providing working capital to the company again giving it time to explore these discussions. With that I will hand over to Steve to take you through the financials.
Steve Thomas (Chief Financial Officer)
Steve thank you Jonathan and good morning everyone. Noting all numbers discussed will be in Canadian dollars unless otherwise stated. In Q1 2026 we sold twice the volume of carats compared to Q1 2025, but at less than half the price due to continued volatility as a tariff regime for which exemption of rough diamonds has been indicated is not yet enacted. Cost of sales in Q1 2026 are higher than Q1 2025, but when normalized per carats sold were comparatively much lower.
Steve Thomas (Chief Financial Officer)
The quarter saw minimal net depletion of the ore stockpile, although 860,000 tonnes less than at the end of Q1 2025. As in that period, carats recovered were drawn heavily from the stockpile. The company’s working capital position at minus $63.1 million is slightly less negative than it was at the year end with the increase in current assets of rough diamonds on hand and consumables from the winter road deliveries offsetting the marked increase in accounts payable balances which I will discuss shortly. Q1 2026 saw a slight strengthening in the US dollar resulting in an unrealized foreign exchange loss on US dollar debt conversion with $4 million less revenue in Q1 26 than Q1 25 and $10 million higher. Cost of sales operating income was $14 million lower than the comparative period in 25, but with increased finance expenses and a higher FX loss, net income was $31 million lower and cash from operations $16 million lower than Q1 2025. Turning to the balance sheet since the year end the most significant changes are inventories increased by $54 million to 206 million which is comparable to the balance at the same time last year.
Steve Thomas (Chief Financial Officer)
That increase has been driven by a $47 million increase in consumables, notably 55 million litres of fuel from the winter road deliveries. Rough diamond values increased by 6.5 million, reflecting a volume increase from 643,000 carats at the year end to 768,000 carats at the end of Q1. And lastly all stockpile value stayed relatively flat at about $53.5 million despite a slight decrease in total tonnes from 2.31 million to now 2.28 million …
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