Mountain Province Diamonds Inc.

Good morning, ladies and gentlemen, and welcome to the Mountain Province Diamonds Inc. Q4 and Full Year 2022 Conference Call and Webcast. At this time, online journalism only mode. Following the presentation, we will 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 Thursday, March 23, 2023. And I would like to turn the conference over to Mark Wall, President and CEO. Please go ahead.

Thank you very much. Good day to everyone who's dialed in to listen to our Q4 and full year 2022 results call. My name is Mark Wall and I'm the President and CEO of the company. Also present on this call is Stephen Thomas, our CFO, Reid Mackey, our Vice President and Head of Sales and Marketing, Matt McPhail, our Chief Technical Officer, Dr. April Haywood, our Chief Sustainability Officer, and Dr. Tom McCandless, our Vice President and Head of Exploration. The team will be available for any questions you may have at the end of this call. Firstly, I would like to draw your attention 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 is a Canadian diamond producer, mining Canadian diamonds to the highest standards of corporate social responsibility, and that's something that we continue to be proud of. We own 49% of the Gatcha Quay mine in the Northwest Territories, with De Beers owning the remaining 51%. We operate with a joint venture agreement with a four-person management committee, two from De Beers and two from Mountain Province. We have appointed De Beers as the operator of the assets, and that has resulted in the operating systems of De Beers and Anglo-American being applied to the assets, including the high standards of corporate social responsibility that I've already mentioned. In addition to the 5,216 hectares of joint venture ground containing the existing mining operations, Mountain Province is the 100% owner of more than 113,000 hectares of highly prospective ground that surrounds the Gadgetway assets. that we refer to as the Kennedy North Project. Today I'll speak to 2022 full year and 2022 Q4 results and how Mountain Province Diamonds has changed over the last 12 months. I'll speak to our focus areas for 2023 and give a high level outlook for 2024. Matt, our CTO, will provide an update on the work that we're doing around growth and the preliminary results so far. Steve, our CFO, will discuss the financial performance of the company, and Reid, our Head of Sales and Marketing, will provide an update on the diamond market, and I will then close out the presentation. While there are many positives from 2022 that I will get into in a moment, the safety performance of the mine did not meet my expectations, including a tragic fatal accident during quarter three. Anglo-American and De Beers have undertaken an exhaustive investigation to avoid a similar incident with regards to this type of heavy mining equipment anywhere else in the world. And the site management team are laser focused on ensuring a safe workplace in 2023. The safety of all workers, be they employees or subcontractors, must be our priority. Before we turn to our 2022 results, it is helpful to review the situation at the end of 2021, when we had $300 million US in bonds terming in December 2022 with no refinancing in place and concern among some shareholders that this would be a highly dilutive event. We had a debt to EBITDA ratio of around 2.8 to 1. We had a 2024 mine plan that was around 3.2 million carats as reported in our 43-101 technical report. We had approximately $270 million in write-downs sitting on our balance sheet. We had no material organic growth prospects on the joint venture land. We had a 2019 43-101 technical report in place valuing our share of the joint venture at $595 million Canadian dollars pre-tax, pre-royalties. As we review the situation a year later, We have refinanced our bonds at a 9% coupon with zero dilution to shareholders. This attractive refinance was once again supported by our major shareholder, Mr. Dermot Desmond, amongst others. We also repaid US $60 million in debt during 2022 from operating cash flow. We moved our trailing debt to EBITDA from around 2.8 to 1 to around 1.8 to 1 at the beginning of 2023. We made a significant discovery beside and connected to the Hearn Open Pit that is potentially a catalyst to transition Gatcha Quay to an underground producer with additional drilling underway. If indeed a transition to underground mining proves to be feasible, and we are studying that potential right now, this would lead to a significant mine life extension. We are also studying any potential opportunities to bring the Kelvin and Faraday deposits into any future plan. We completed the work to write back $240 million on the year-end 2021 balance sheet, driven by the improved company and market outlook. During 2022, we updated and issued our 43-101 technical report on the Gaucho Kwe mine, showing a pre-tax, pre-royalty NPV of $1.23 billion, an improvement of $638 million on the previous study, leading to an after-tax NPV of $964 million Canadian dollars on our share of the Gaucho Kwe asset only. The 2024 mine plan has been revamped from that published in our latest 43-101, with the planned carrot production increase for 2024 to be a planned year of positive cash flow and additional debt reduction. The 2022 production plan was under significant pressure with a tenfold increase in site COVID-19 cases in 2022 compared to 2021. The recovery plan developed led the mine to produce 5.52 million carats for the year with a strong Q4. In a challenging year for inflation and costs, we contained our costs despite the additional expenditure on COVID-19 related matters inflation across the spectrum, and very high diesel prices to finish the year at the bottom of original guidance for cost per tonne treated and $1 above original guidance for cost per carat produced. All of that coming together to deliver a record annual adjusted EBITDA at $177.2 million. I would sum up 2022 as a year with many difficulties and challenges, and also one with many achievements, as I believe we left 2022 much stronger than we entered into it. On to quarter four and full year results. A quick review of the full year 2022 highlights. As I've already stated, an adjusted EBITDA of $177.2 million, Revenue of almost $389 million, the highest revenue in the company's history, an average value per carat of US $112, and the successful refinancing transaction, as already stated, with no dilution to existing shareholders. Despite the challenges in 2022, we saw production results in Q4 reflective of what the mine is capable of, with production of 1.62 million carats. The fourth quarter represented a 12% increase in car production relative to Q3 and a 29% increase relative to Q2 of 2022. We remain attentive to managing the inflationary cost pressures seen across North America. while at the same time balancing the operational and human resources demands required to run a remote mining operation with a skilled workforce. As with any mining operation with such a high ratio of fixed costs relative to the variable, the main driver of value will always tend to fall on how many tonnes can be processed, especially in our case where we currently have a large stockpile ahead of the plant. This effectively means that plant utilization must be maximized, which is a key metric we will continue to focus on. Matt will go into more detail on the operational aspects of quarter four in the next few minutes. Focusing for a moment on the sustainable development efforts for 2022, the team continues to work hard to further its community involvement. The National Mining Association of Canada Award for the Ni Hardi Ha Joint Environmental Monitoring Program was certainly a highlight for me. The award of 12 scholarships by Goucho Kwe Maim to the top Northwest Territories graduates from Aurora College's Early Learning and Child Care Program was another highlight. These scholarships fill an important funding gap for part-time students living in the Northwest Territories who are ineligible for government funding because of their part-time status. Another program that I believe is especially powerful is the recently launched Baby Bundle program. In this program, the Gatcho Klo Minus partnered with the government of the Northwest Territories to tackle the issue of infant mortality in the Northwest Territories. It was determined that many cases of infant mortality were preventable, and this led to the development of this program where around 600 baby bundles will be delivered to every mother of an infant born in the Northwest Territories for the next three years. 400 of these bundles have already been distributed. The makeup of these bundles has been determined by the Health Ministry and includes essential supplies, information and resources to help new mothers and new families during the important early phase of a child's life. Now moving to 2023 and the year ahead, our strategy remains consistent. Firstly, we will continue to focus on safety, sustainability and operational performance at the mine level. Secondly, we'll focus on organic growth at Gatcha, Quay and Kennedy, both on the underground potential, reviewing options to include the 13.6 million indicated carats and 7.4 million inferred carats from the Kelvin and Faraday deposits into possible mine plans. as well as a targeted exploration program. Thirdly, we will continue to improve our balance sheet by working on reducing debt directionally towards a one-to-one debt to EBITDA ratio. As we focus on continuing to repay debt towards our target, we will review all opportunities to minimize debt costs and maximize capital allocation options. And fourth, we will continue to optimize our sales pipeline and look for ways to manage our costs while benefiting from our current nimble sales platform. Earlier, I raised our 2024 mine plan. While it's not necessary to review and update our entire 43-101 technical report, it is appropriate to provide a general outlook on production for 2024, which due to a widening of the ore body and other changes is now estimated to be 4 to 4.4 million carats, up from the 3.276 million carats as published in the current 43-101 technical report. While some additional carats have come into the plan over the life of the mine, the overall plan from 2025 onwards is materially the same. We will continue to review the 2024 plan as a part of the normal strategic business planning process during this year to seek further optimisation and improvement. We are now into 2023. We know that quarter one for Goucher Quay is a very busy time, with almost 400 kilometres of ice road having been constructed and the movement to the mine of most of the stores and equipment for the year taking place. That work is on schedule and going well. At the same time, mining and processing operations take place through the coldest temperatures and the most challenging conditions of the year, with temperatures in the range of minus 50 degrees not uncommon. While Q1 is always a challenge, it sets the operation up to deliver results through the full year. I will now hand over to our CTO, Matt McPhail, to provide additional details on our operating results.

Thanks, Mark.