This call is being recorded on Thursday, March 27th, 2025. I would now like to turn the conference over to Mark Wall, President and CEO. Please go ahead.
Thanks, Joanna. Good day to everyone who's dialed in to our Q4 and full year 2024 results call. My name's Mark Wall, and I'm the President and CEO of the company. Also present on this call is Steve Thomas, our CFO, and Reid Mackie, our Vice President of Diamonds Sales and Marketing. At the conclusion of the presentation, the team will be available for any questions that you may have. Firstly, I'd like to draw your attention, as always, to our cautionary and forward-looking statement. 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 standards 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 the De Beers Group, a division of Anglo American, owning the remaining 51%. Today, I will speak to our Q4 and full year 2024 results. Following that, Steve will discuss the financial performance of the company, and Reid will comment on the overall diamond market. I'll then make some closing remarks to complete the presentation and answer any questions that you may have. As always, I'll start the review of our safety performance. In 2024, we continued to focus on workplace safety, and the operations achieved a 60% improvement year- on- year in total recordable injury frequency rate. The operations had historically had a TRIFR that was high compared to other mines, and I'm pleased to say that with continued focus, the safety performance has improved drastically over the past couple of years, including during 2024.
The operations now have approximately 3.4 million hours without a lost-time injury, which again is very pleasing. Safety is always a leading indicator of business performance, and we will continue to focus on this very important area of the business. I'm now going to run through some highlights from our fourth quarter as well as full year 2024 results. Reid will comment more broadly on the diamond market. I will say that diamond pricing during 2024 was a challenging part of the business. In 2024, we saw an average diamond price at 20% less than in the full year of 2023. The amount of carats sold was approximately the same year on year, so price created a very direct impact on the business. From an operating perspective, we focused on what we can control, which is production and costs.
On production, the work done from late 2022 through to late 2023 to stabilize the processing facility returned positive results, with all processed at 3.63 million tons, a record for the operations. On mining, 2024 was a challenging year with pit bottom mining in both the 5034 and the Hearne open pits taking place concurrently. These two open pits were successfully completed during the 2024 year, with additional ore being mined than was in the plan. As previously reported, we saw grade lower than planned early in the year. We know that production is the result of throughput and grade, which meant that the higher achieved throughput helped contribute to the final production number of 4.66 million carats, which was around 40,000 carats short of the top of our guidance range, which was 4.2 million carats-4.7 million carats.
On costs, our cash cost per carat recovered guidance range was CAD 96-CAD 107 per carat, with our result below the bottom of the cost range at CAD 91 per carat, and our cash cost per ton treated guidance at CAD 124-CAD 136 per ton treated, our result again below the guidance range at CAD 117 per ton treated. The resulting adjusted EBITDA for the 2024 year was CAD 90.7 million, which is significantly lower than the CAD 155 million of adjusted EBITDA for 2023, based on a very similar sales volume. In summary, we have been focused on safety, which is a leading indicator to overall performance, processing plant stability and optimization, ore mining and cost control. We will continue our efforts to safely achieve, or where possible, exceed the plan. The all-important piece is the recovery of the diamond market.
I see some green shoots in the market, and Reid will discuss this in more detail in a few moments. We will continue to focus on the things that we can control, which is safety, production, and costs. Although there are not 2024 events, I will also update you briefly on two things. Firstly, the annual ice road season is drawing to an end. This is a complex activity, and I am pleased to say that we plan to have our annual resupply completed by tomorrow afternoon, which is slightly ahead of plan. Secondly, and also a subsequent event to the year end, the company recently announced the closing of a significant refinancing transaction, which has addressed a number of material issues for the company, including the bonds that were due to expire at the end of this year.
With this refinancing, together with other liquidity measures that the company is currently advancing, the company will be much better positioned as we head towards a significantly higher production year in 2026. Once again, I'm grateful to our largest shareholder, Mr. Dermot Desmond, for his stalwart support of the company. With that, I'll turn the call over to Steve, who will take us through the financial results. Steve.
Thank you, Mark, and good morning, everyone. Noting that all numbers discussed will be in Canadian dollars unless otherwise stated. First, turning to an overview of the business. Continued focus on improving operational efficiency and economy has seen record throughput rates achieved in the process plant. Although more ore tons were mined and treated in 2024 than in 2023, the impact of treated grade being 25% lower resulted in 16% less diamonds recovered in 2024 compared to 2023. Despite this, the company sold the same number of carats in 2024 as 2023, resulting in lower closing diamond inventory. As such, the reduction in comparative revenues across the two years is entirely down to reduction in unit selling price. 2024's average selling price was approximately 20% below 2023 and 6% lower in Q4 2024 than during the first nine months of the year.
This revenue reduction in 2024 resulted in significantly lower comparative earnings from mine operations, compounded by an increase in comparative cost of production, which itself was due in large part to a write-down in inventory value. Another major impact on 2024's financial results was the strengthening of the U.S. dollar, especially in Q4, further lowering net income when compared to 2023. As a result, earnings from operations in Q4 2024 was a loss of CAD 13 million compared to full year earnings of CAD 18.4 million. For the 2024 year-end balance sheet, the most significant change is the recategorization of the $ 177 million senior secured loan notes due in December 2025, from a long-term liability to a current liability, resulting in a negative working capital balance of CAD 120 million.
Absent this recategorization, the working capital balance would have been +CAD 140 million compared to CAD 171 million at the end of 2023. However, as recently announced, the term date for the loan notes is now extended to December 2027, and the debt will revert to a long-term liability in the Q1 2025 financial statements. The critical refinancing of the loan notes was achieved alongside other significant agreements reached with De Beers to address the reclamation liabilities owed to the mine operator, and with our debt providers to defer interest, and with our largest shareholder, Mr. Desmond, to provide an injection of capital to help address the 2025 liquidity challenges faced by the company. I will now highlight a few key elements of the 2024 balance sheet. Beyond the aforementioned debt reclassification, other items to note are as follows.
The embedded derivative asset at 2024 year-end at CAD 6 million compares to a balance of CAD 12.6 million at 2023 year-end, and that represents the fair value calculated for the prepayment and redemption feature in the second lien notes. The declining value is due primarily to an increase in the applicable discount rate, along with a marked decrease in interest rate volatility used in the calculation. Inventories at CAD 196.5 million have decreased by CAD 21 million over the quarter and CAD 9.2 million compared to the year-end 2023. The three distinct components are as follows. Supplies inventory has reduced by CAD 17 million as consumables are used prior to their replenishment on the winter road during Q1 2025, which, as Mark has mentioned, is almost completed for this year.
Secondly, the value of the ore stockpile at CAD 109 million compared to CAD 77 million at 2023 year-end reflects the substantial increase in stockpile tons from 2.3 million to 4.1 million. Thirdly, the decline in rough diamond inventory from CAD 50 million at 2023 year-end to CAD 23 million now reflects the reduction in carats held from 745,000 at the end of 2023 to 319,000. During 2024, there was a CAD 13.7 million adjustment in value down from cost to net realizable value, arising during Q3 and Q4 because of the lower selling price being achieved. In respect of long-term assets, the value of property, plant, and equipment in 2024 at CAD 588 million is close to the value of CAD 591 million at the end of 2023.
These balances comprise the value of capitalized waste stripping at approximately CAD 160 million, the carrying value of the Kennady North Project at CAD 169 million, for which management concluded there was no evidence of triggers of impairment to consider per IFRS 6, and lastly, CAD 260 million of mining infrastructure assets. The restricted cash balance represents monies deposited with the operator to be used to fund future decommissioning costs. The balance of CAD 34 million at the 2024 year-end compares to CAD 32.4 million at the 2023 year-end, with the increase being interest on funds deposited. The agreement reached recently with De Beers confirmed future contributions over 2026, 2027, and 2028 to fund the company's share of decommissioning costs, currently estimated at CAD 94.7 million.
In respect of current liabilities, the CAD 7.9 million derivative liability represents the fair value of the $105 million of currency hedges in place at the year-end through to October 2025, comparing their respective settlement rates to the forward FX curve derived for this fair value. In 2023, the equivalent $45 million of U.S. hedges had a fair value of + $1.4 million. In summary, the change in the value of the current assets less current liabilities since the start of the year decreased the working capital position substantially due to the reclassification of the senior notes, but after normalizing for that impact, the residual CAD 31 million reduction reflects the reduction in comparative closing cash balance and the decrease in the derivative asset fair value.
In respect of long-term liabilities, the strengthening of the U.S. dollar compared to the Canadian since the end of 2023 has increased the Canadian equivalent value of the Dunebridge Junior Credit Facility by CAD 5.7 million. Also, CAD 23.2 million of unpaid interest has accrued in accordance with the credit facility terms. Turning now to cash flow and earnings plus. For 2024, 2.72 million carats have been sold at an average price of $72 per carat or CAD 98 to generate CAD 268 million revenue, which compares to the same 2.72 million carats sold at $90 per carat or CAD 121 to generate CAD 329 million in 2023.
Despite Q4 2024 seeing a slightly higher selling price than Q4 2023, for the first nine months of 2023, prices averaged $103 per carat compared to $73 per carat over the first nine months of 2024, and Reid will provide more insight into the market shortly. Production costs at CAD 42.5 million in Q4 2024 compared to CAD 33.5 million in Q4 2023, with the difference largely attributable to the charge for writing down rough diamond inventory from cost to net realizable value. Beyond this impact, and after normalizing for carats sold in Q4 2024 compared to Q4 2023, production costs are comparatively higher because there was a larger growth in the ore stockpile in 2023 than 2024, so comparatively more production costs were capitalized in Q4 2023 than was the case in Q4 2024.
For full year 2024, production costs at CAD 157 million are CAD 19 million above full year 2023, of which CAD 9 million is the non-cash diamond inventory write-down, and the balance of the increase reflects higher opening inventory costs in 2024 than 2023, and lastly, general inflation impacts between the years. For 2024, total cash costs of production, including capitalized stripping, at CAD 208 million compare closely to CAD 205 million for 2023. With 12% more ore treated in 2024 than 2023, there is a consistent 10% reduction in the cost per ton of ore treated at CAD 117 in 2024 versus CAD 129 in 2023. However, the cash cost per carat for 2024 at CAD 91 is notably above CAD 75 incurred in 2023 because diamonds recovered were only 4.7 million in 2024 versus 5.6 million in 2023.
This reflects the higher grade achieved in 2023 at 1.71 carats per ton compared to only 1.21 carats per ton in 2024. In summary, earnings from operations for 2024 were CAD 18 million compared to CAD 102 million in 2023, which, as explained above, is due to CAD 61 million lower revenue with lower price achieved, CAD 19 million due to production costs, of which half were the non-cash inventory adjustment charge, and CAD 4 million being an increase in depreciation. Continued efforts to control corporate costs resulted in CAD 1.6 million or 12% lower costs for the full year 2024 compared to 2023, and for exploration and evaluation expenses in 2024 at CAD 1.1 million, that was significantly below the CAD 6.6 million spent in 2023, reflecting reduced activity at the Kennady Project.
However, the company continues to ensure all required permits are in good standing, and as reported in our MD&A, a targeted program of activity took place during 2024 to support the project's economic potential. The resultant operating income of CAD 4.5 million for 2024 compares to a loss of CAD 23 million in 2023, with that loss impacted largely by the CAD 104 million impairment charge that we took in 2023. Below operating income, a significant difference for 2024 compared to 2023 is the foreign exchange loss of CAD 27.5 million compared to a foreign exchange gain of CAD 6.6 million in 2023. CAD 26.9 million of the foreign exchange loss arising in 2024 was unrealized, largely reflecting the translation of the U.S. dollar debt at a higher closing U.S. dollar rate, and was the case for 2023.
Per the analysis in the MD&A, adjusted EBITDA in Q4 2024 was CAD 10.2 million versus CAD 39.8 million for Q4 2023, and for the full year 2024, CAD 90.7 million versus CAD 155.3 million for 2023. The resultant EBITDA margin for 2024 at 34%, although healthy, is markedly lower than 47% achieved for 2023. The above performance resulted in a net loss after tax for Q4 2024 of CAD 62.2 million compared to a loss of CAD 75.8 million in Q4 2023, and for the full year 2024, a net loss of CAD 80.8 million compared to a loss of CAD 43.7 million for 2023, but noting that loss in 2023 was heavily impacted by the aforementioned impairment charge.
For Q4 2024, the earnings per share was a net loss of CAD 0.29 compared to a loss of CAD 0.36 for Q4 2023, and for the full year 2024, the earnings per share loss is CAD 0.38 compared to a loss of CAD 0.21 for 2023. In conclusion, challenging market conditions suppressing price has impacted financial results and emphasized management focus on driving the efficiency of the operation and minimizing spend wherever possible. As for 2024 year, going forward, we will continue to focus on what we can control, working with the operator to move quickly and safely to the higher grade NEX ore body in 2025, enabling higher production and increased sales, and securing a working capital facility that will supplement the financial solutions developed with our Dunebridge partners in 2024 in order to meet our obligations throughout 2025.
Thank you for listening, and with that, I will turn the presentation over to Reid Mackie, our VP Diamond Sales and Marketing. Reid.
Thanks, Steve. As already mentioned today, 2024 was another challenging year for the industry with both polished and rough prices, continuing the slide which began in 2023. Key negative drivers included slow Chinese domestic retail, persistently high levels of midstream inventory, and uncertainty around higher volumes of cheaper lab-grown diamonds. This resulted in upstream market apprehension and more selective purchasing of rough and polished goods. Through the year, rough diamond producers took steps to defend rough prices by postponing or canceling sales, offering greater purchasing flexibility, and reducing overall mine output. As discussed, Mountain Province's cash flow planning utilized the company's short working capital cycles to sell 100% of production available, and no strategic stocking was employed in 2024.
At the end of 2024, the much-anticipated retail holiday period did see some growth in consumer spending year on year, but this did not initially prompt a rebound in rough and polished purchasing nor prices. However, more recently, with results from the holiday retail season more widely known, we are seeing some positive signs for recovery. Highlights at retail came from luxury companies like Richemont, who owns Cartier and Van Cleef & Arpels, who reported record holiday sales in their hard luxury jewelry categories. The continued commitment of most high jewelry houses to exclusively use natural diamonds is notable. Lab-grown or factory-made diamonds, which increased their share of sales in 2024, appear to be at an inflection point that is creating more separation between them and natural diamonds and reduced their negative impact upon confidence in the natural diamond market.
Wholesale pricing for lab-grown diamonds have eroded 90% in the past 10 years, and their factories are experiencing high rates of attrition via bankruptcies or abandonment of the sector. Lastly, and perhaps more importantly, reliable technology that accurately differentiates lab-grown from natural diamonds is expected to be more widely rolled out in 2025. This should mitigate further erosion of consumer confidence and support differentiated marketing of natural diamonds. Upstream, we have recently seen widespread rough diamond price increases and are beginning to see polished price increases as well. Midstream polished inventories are reduced, and buyers are reporting scarcity in certain sizes and categories, which supports price growth. This was reflected in our most recent sales, which saw solid rough diamond price increases and some of the most competitive bidding seen in years.
As the supply-demand balance continues to move in a favorable direction for rough pricing, the major rough diamond producers appear to be carefully managing the release of stock goods into the pipeline to avoid oversupply. In the longer term, rough diamond supply levels are expected to align with reduced production levels from the mines while demand for branded natural diamond jewelry with positive origin stories continues to grow. I'll now pass you back to Mark for his concluding remarks.
Thanks very much, Reid. In summary, during 2024 and into 2025, we've continued to focus on safety performance with a very significant improvement year on year. Safety is a leading indicator of production performance, and we will keep the focus in this area.
We continued with the processing plant initiatives that have now resulted in the plant achieving record throughput in 2024, and this is especially important as we treat low-grade stockpiles in the first half of 2025. We focused on optimizing mining rates, which is, again, especially important to get through the waste stripping period to reach the high-grade NEX ore body, which we expect to happen at the end of quarter two. We have remained focused on cost control with unit costs for tons treated and carats produced finishing below the guidance range in both cases. For 2025, we will keep the focus in these areas to best position the company for an improvement in the diamond price environment through 2025. Thank you for your time. The team is now available to take any questions that you may have. Joanna. Thank you.
Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touch-tone phone. You will hear a prompt that your hand has been raised. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. There appear to be no questions. I will turn the call back over to management.
Okay. Steve, are there any questions online?
Mark, there is one. Mr. White from the Sunday Times has asked, "In filings, you've stated that the company is still working on negotiations about a further working capital facility.
Could you tell us a bit more about the quantum of the working capital required, the current position of those negotiations, and then identify possible providers? I'm happy to speak to that, albeit briefly, because obviously the conversations around that working capital facility aren't progressed to a specific stage. We know we have the need. We've been having conversations with internal existing debt providers and looking at external alternatives. We have a special committee of the independent directors established to consider those alternatives, but at this time, we don't have specific terms established. Other than that, we have no questions submitted, Mark.
Okay. Thanks, Steve.
I guess I would just add to that that in the press release that we did put out around the bond transaction, we did provide some numbers of the areas we were focused on, and again, we do not have anything, as Steve said, further than what we have made available in the press release. With that, thank you, everyone. Thank you, Joanna, and I look forward to updating you in the next call.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.