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Investment Case

Mountain Province, through its interest in the Gahcho Kué mine, is in an exceptionally advantageous position. Currently, there are only 17 primary diamond mines in operation globally. By 2017, when Gahcho Kué is expected to achieve full production, this number will be reduced to 12. Gahcho Kué will be among the largest and most profitable of the world’s primary diamond mines.

Looming Diamond Shortage

The world is facing a looming diamond shortage as global demand increasingly outstrips supply. This is leading to a sharp rise in diamond prices. Today, demand and supply are largely in balance at approximately US$15 billion annually. By 2017 – when Gahcho Kué is expected to achieve production – global demand for diamonds is expected to rise to US$20 billion, outstripping supply by approximately US$5 billion annually. As a result, diamond prices are projected to double within the next 10 years.

Powerful New Markets

Despite investments of hundreds of millions of dollars in global exploration, the diamond industry has failed to discover sufficient commercial diamond deposits to replace existing finite mines. Consequently, diamond production is projected to remain flat for at least the next decade. The price support being brought on by this shortage is being compounded by the emergence of powerful new markets with strong appetites for diamonds. The U.S. currently accounts for 50% of worldwide diamond sales. However, the largest demand increases are in China and India, which have fast-growing middle classes, as well as the Middle East.