Mr. Mark Wall reports

MOUNTAIN PROVINCE DIAMONDS ANNOUNCES FULL YEAR AND FOURTH QUARTER 2023 RESULTS

Mountain Province Diamonds Inc. has released its financial and operating results for the fourth quarter and the full year ended Dec. 31, 2023.

FY 2023 highlights:

• 43-per-cent improvement in key site safety key performance indicator (total recordable incident frequency rate) in 2023 versus 2022;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $165.0-million, down 8 per cent relative to 2022 (2022: $178.6-million);
• Total sales revenue at $328.6-million ($243.8-million (U.S.)) compared with $388.9-million in 2022 ($297.3-million (U.S.)): at an average realized value of $121 per carat ($90 (U.S.)) (2022: $146 per carat ($112 (U.S.)));
• Repaid $18-million (U.S.) in senior secured second-lien notes;
• 9-per-cent increase in total tonnes mined in 2023 relative to 2022, coupled with a 5-per-cent increase in tonnes treated;
• Net loss of $43.7-million or 21-cent loss per share (2022: net income of $49.2-million or 23-cent earnings per share); included in the determination of net loss is an impairment loss on property, plant and equipment of $104.6-million and foreign exchange gains of $6.6-million (2022: foreign exchange loss of $28.2-million) on the translation of the company's U.S.-dollar-denominated long-term debt; the unrealized foreign exchange gains are a result of the relative strengthening of the Canadian dollar versus the U.S. dollar.

Operational highlights for Q4 2023 and FY 2023 (all figures reported on a 100-per-cent basis unless otherwise stated):

• 1,572,696 carats recovered during the quarter at an average grade of 1.84 carats per tonne, 3 per cent lower than the comparable quarter in 2022 (Q4 2022: 1,621,800 carats at 1.96 carats per tonne); 5,557,655 carats recovered during FY 2023 at an average grade of 1.71 carats per tonne, 1 per cent higher than the comparable period (full year ended Dec. 31, 2022: 5,519,309 at 1.78 carats per tonne);
• 1,895,492 ore tonnes mined during the quarter, a 169-per-cent increase on the comparable period in 2022 (Q4 2022: 705,924); 3,807,102 ore tonnes mined during FY 2023, a 7-per-cent decrease from 2022 (FY 2022: 4,113,648);
• 855,319 ore tonnes treated during the quarter, a 3-per-cent increase on the comparable period in 2022 (Q4 2022: 828,644); 3,249,963 ore tonnes treated during FY 2023, a 5-per-cent increase from 2022 (FY 2022: 3,102,219);
• 9,831,021 total tonnes mined during the quarter, a 3-per-cent decrease on the comparable period (Q4 2022: 10,144,844); 37,147,350 total tonnes mined during FY 2023, a 9-per-cent increase from 2022 (FY 2022: 33,947,188).

Financial highlights for Q4 2023:

• 918,000 carats sold (Q4 2022: 758,000), with total proceeds of $79.8-million ($58.9-million (U.S.)) at an average realized value of $87 per carat ($64 (U.S.)), compared with $96.3-million in Q4 2022 ($71.3-million (U.S.)), at an average realized value of $127 per carat, ($94 (U.S.));
• Adjusted EBITDA of $39.8-million;
• Earnings from mine operations of $25.6-million;
• Cash costs of $93 per tonne treated and $50 per carat recovered include capitalized stripping costs;
• Net loss of $75.8-million or 36-cent loss per share; included in the determination of net loss for Q4 2023 is an impairment loss on property, plant and equipment of $104.6-million and foreign exchange gains of $6.7-million, on the translation of the company's U.S.-dollar-denominated long-term debts; the unrealized foreign exchange gains are a result of the relative strengthening of the Canadian dollar versus the U.S. dollar.

Financial highlights for FY 2023:

• Total sales revenue at $328.6-million ($243.8-million (U.S.)) at an average realized value of $121 per carat ($90 (U.S.)) compared with $388.9-million in 2022 ($297.3-million (U.S.)) sales revenue at an average realized value of $146 per carat ($112 (U.S.));
• Adjusted EBITDA of $165.0-million down 8 per cent (2022: $178.6-million);
• Earnings from mine operations of $102.4-million (2022: earnings from mine operations of $170.5-million);
• Cash costs of production, including capitalized stripping costs, of $129 per tonne treated (2022: $122 per tonne) and $75 per carat recovered (2022: $69 per carat);
• Net loss of $43.7-million or 21 cents per share (2022: net income $49.2-million or 23 cents per share); included in the determination of net loss is an impairment loss on property, plant and equipment of $104.6-million and foreign exchange gains of $6.6-million (2022: loss of $28.2-million) on the translation of the company's U.S.-dollar-denominated long-term debt; the unrealized foreign exchange gains are a result of the relative strengthening of the Canadian dollar versus the U.S. dollar;
• Capital expenditures were $83.3-million, $74.4-million of which were deferred stripping costs, with the remaining $8.9-million accounting for sustaining capital expenditures related to mine operations.

Market highlights and commentary for Q4 2023 and FY 2023

In Q4 2023, 918,000 carats were sold at an average value of $87 per carat ($64 (U.S.) per carat) for total proceeds of $79.8-million ($58.9-million (U.S.)) in comparison with 758,000 carats sold at an average value of $127 per carat ($94 (U.S.) per carat) for total proceeds of $96.3-million ($71.3-million (U.S.)) in Q4 2022.

During FY 2023, 2,718,000 carats were sold at an average value of $121 per carat ($90 (U.S.) per carat) for total proceeds of $328.6-million ($243.8-million (U.S.)) in comparison with 2,657,000 carats sold at an average value of $146 per carat ($112 (U.S.) per carat) for total proceeds of $388.9-million ($297.3-million (U.S.)).

After a record-breaking previous year, 2023 was more challenging for the diamond industry. Retail activity and consumer demand softened in the United States and Europe amid global inflation concerns and continuing conflict in Ukraine and the Middle East. Chinese retail remained persistently quiet.

Toward the end of the third quarter, major producers postponed or cancelled sales until more favourable market conditions prevailed. The company elected to strategically stock select categories of goods to defend prices. In October, India's Gem and Jewellery Export Promotion Council, representing Indian manufacturers, introduced a two-month self-imposed import ban. These supply-tightening measures reduced manufacturers' inventories and moved polished goods downstream for the retail holiday season and anticipated restocking. By year-end, diamond prices had steadied, and the company sold most of its strategic stock at a premium to withdrawn prices.

Mountain Province president and chief executive officer Mark Wall commented: "Coming from record 2022 where multiple company financial records were broken, 2023 saw reduced revenues primarily due to a softening market. Driven by this softening, the company, along with its [joint venture] partner De Beers Group, made the prudent decision to limit discretionary spending, including continuing internal studies on a potential transition to underground mining at Gahcho Kue to extend mine life. The company intends to take all reasonable steps to maintain the underground mining optionality.

"Despite the challenging market in [second half], during 2023, the company paid down $18-million (U.S.) in senior secured second-lien notes. While we would have preferred to pay down more, this is aligned with our strategy to pay down debt principal as cash flows allow to maintain financial flexibility.

"Operationally, 2023 saw improvements on certain key metrics, including an increase in tonnes treated of 3.25 million tonnes in 2023 versus 3.10 million tonnes in 2022, primarily driven by improvement post the mid-2023 major plant shutdown.

"Moving into 2024, the company faces a lower production year due to the effects of mine sequencing and grade profile changes, all normal occurrences in open pit diamond mining. This lower production year was anticipated, and the mine remains on track to achieve the previously stated 2024 production guidance of 4.2 million to 4.7 million carats at the JV level and 2.3 million to 2.6 million carats sold at the company level.

"On the rough diamond market, we continue to monitor developments closely as many factors are integrated in the market dynamic. Initial stages of a recent G7 sanction banning imports of Russian-origin rough diamonds have increased efforts through the diamond pipeline to track and promote diamond's origin tracing. This could yield a positive impact on demand for Canadian origin goods, and the company is reviewing opportunities."

Conference call

The company will host its quarterly conference call on Tuesday, April 2, 2024, at 11 a.m. ET.

Title:  Mountain Province Diamonds Inc. Q4 2023 and FY 2023 earnings conference call

Conference ID:  16709659

Date of call:  April 2, 2024

Time of call:  11 a.m. Eastern Time

Expected duration:  60 minutes

A webcast will be available.

Participant toll-free dial-in number:  1-888-390-0546

Participant international dial-in number:  1-416-764-8688

A replay of the webcast and audio call will be available on the company's website.

About Mountain Province Diamonds Inc.

Mountain Province is a 49-per-cent participant with De Beers Canada in the Gahcho Kue diamond mine located in Canada's Northwest Territories. The Gahcho Kue joint venture consists of several kimberlites that are actively being mined, developed and explored for future development. The company also controls over 113,000 hectares of highly prospective mineral claims and leases surrounding the Gahcho Kue diamond mine that include an indicated mineral resource for the Kelvin kimberlite and inferred mineral resources for the Faraday kimberlites. Kelvin is estimated to contain 13.62 million carats in 8.50 million tonnes at a grade of 1.60 carats per tonne and a value of $63 (U.S.) per carat. Faraday 2 is estimated to contain 5.45 Mct in 2.07 Mt at a grade of 2.63 carats per tonne and a value of $140 (U.S.) per carat. Faraday 1-3 is estimated to contain 1.90 Mct in 1.87 Mt at a grade of 1.04 carats per tonne and a value of $75 (U.S.) per carat. All resource estimations are based on a one-millimetre diamond size bottom cut-off.

Qualified person

The disclosure in this news release of scientific and technical information regarding Mountain Province's mineral properties has been reviewed and approved by Matthew MacPhail, PEng, MBA, an employee of Mountain Province, a qualified person as defined by National Instrument 43-101 (Standards of Disclosure for Mineral Projects).

We seek Safe Harbor.