EX-99.2 3 ex992.htm Q2 2022 FINANCIAL STATEMENTS

EXHIBIT 99.2

Condensed Consolidated Interim Financial Statements

(Expressed in thousands of Canadian Dollars)

MOUNTAIN PROVINCE
DIAMONDS INC.

Three and six months ended June 30, 2022

(Unaudited)

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MOUNTAIN PROVINCE DIAMONDS INC.

CONTENTS	Page
Responsibility for Condensed Consolidated Interim Financial Statements	3
Condensed Consolidated Interim Balance Sheets	4
Condensed Consolidated Interim Statements of Comprehensive Income	5
Condensed Consolidated Interim Statements of Equity	6
Condensed Consolidated Interim Statements of Cash Flows	7
Notes to the Condensed Consolidated Interim Financial Statements	8 – 28

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MOUNTAIN PROVINCE DIAMONDS INC.

Responsibility for CONDENSED consolidated INTERIM Financial Statements

The accompanying unaudited condensed consolidated interim financial statements of Mountain Province Diamonds Inc. (the "Company") are the responsibility of management and have been approved by the Board of Directors.

The unaudited condensed consolidated interim financial statements have been prepared by management, on behalf of the Board of Directors, in accordance with the accounting policies disclosed in the notes to the Company’s audited consolidated financial statements as at December 31, 2021. Where necessary, management has made informed judgments and estimates in accounting for transactions which were not complete at the balance sheet date. The condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standards 34 – Interim Financial Reporting using accounting policies consistent with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) appropriate in the circumstances.

Management has established processes, which are in place to provide sufficient knowledge to support management representations that it has exercised reasonable diligence that the unaudited condensed consolidated interim financial statements fairly present in all material respects the financial condition, financial performance and cash flows of the Company, as of the date of and for the periods presented by the unaudited condensed consolidated interim financial statements.

The Board of Directors is responsible for reviewing and approving the condensed consolidated interim financial statements together with other financial information of the Company and for ensuring that management fulfills its financial reporting responsibilities. The Audit Committee assists the Board of Directors in fulfilling this responsibility.

The Audit Committee meets with management to review the financial reporting process and the unaudited condensed consolidated interim financial statements together with other financial information of the Company. The Audit Committee reports its findings to the Board of Directors for its unaudited condensed consolidated interim financial statements together with other financial information of the Company for issuance to the shareholders.

Management recognizes its responsibility for conducting the Company’s affairs in compliance with IFRS as issued by the IASB, and applicable laws and regulations, and for maintaining proper standards of conduct for its activities.

“Mark Wall”		“Steven Thomas”
Mark Wall		Steven Thomas
President and Chief Executive Officer		VP Finance and Chief Financial Officer

Toronto, Canada

August 9, 2022

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MOUNTAIN PROVINCE DIAMONDS INC.

Condensed Consolidated Interim Balance Sheets

Expressed in thousands of Canadian dollars

(Unaudited)

			June 30,			December 31,
	Notes		2022			2021
ASSETS
Current assets
Cash			$	29,433		$	25,000
Amounts receivable		5		1,141			877
Prepaid expenses and other				1,082			820
Derivative assets		16		206			775
Other assets				—			319
Inventories		6		177,383			109,832
				209,245			137,623

Restricted cash		17		25,270			25,144
Reclamation deposit				250			250
Other assets		11, 12		11,306			—
Property, plant and equipment		7		689,946			714,480

Total assets			$	936,017		$	877,497

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable and accrued liabilities			$	39,883		$	36,893
Derivative liabilities		16		148			—
Decommissioning and restoration liability		8		2,436			721
Lease obligations				305			183
Warrant liability		11, 12		7,692			—
Secured notes payable		9		371,553			375,517
				422,017			413,314

Dunebridge junior credit facility		11		10,063			—
Lease obligations				279			336
Decommissioning and restoration liability		8		74,398			92,392
Deferred income tax liabilities				30,640			20,720

Shareholders' equity:
Share capital		14		631,901			631,717
Share-based payments reserve		14		8,209			7,469
Deficit				(242,824	)		(289,785	)
Accumulated other comprehensive income				1,334			1,334

Total shareholders' equity				398,620			350,735

Total liabilities and shareholders' equity			$	936,017		$	877,497

On behalf of the Board:

“Ken Robertson”		“Jonathan Comerford”
Director		Director

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

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MOUNTAIN PROVINCE DIAMONDS INC.

Condensed Consolidated Interim Statements of Comprehensive Income

Expressed in thousands of Canadian dollars

(Unaudited)

				Three months ended			Three months ended			Six months ended			Six months ended
	Notes			June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021

Sales				$	97,761		$	75,147		$	182,414		$	129,371
Cost of sales:
Production costs					26,660			30,984			53,780			58,135
Cost of acquired diamonds					7,373			2,860			13,197			7,734
Depreciation and depletion					12,321			8,504			21,215			16,967

Earnings from mine operations					51,407			32,799			94,222			46,535
Exploration and evaluation expenses					4,557			1,367			8,360			1,962
Selling, general and administrative expenses		15			3,803			2,676			7,797			5,285

Operating income					43,047			28,756			78,065			39,288
Net finance expenses		13			(9,054	)		(10,690	)		(18,206	)		(19,746	)
Other income		12			7,322			—			5,882			—
Derivative losses		16			(1,361	)		(811	)		(1,438	)		(22	)
Foreign exchange (losses) gains					(11,670	)		5,217			(7,422	)		10,264
Income before taxes					28,284			22,472			56,881			29,784
Deferred income taxes					(5,650	)		—			(9,920	)		—
Net income for the period				$	22,634		$	22,472		$	46,961		$	29,784
Total comprehensive income for the period				$	22,634		$	22,472		$	46,961		$	29,784

Basic and diluted earnings per share		14	(iv)	$	0.11		$	0.11		$	0.22		$	0.14

Basic weighted average number of shares outstanding					210,909,141			210,490,807			210,839,500			210,490,807
Diluted weighted average number of shares outstanding					213,639,373			212,354,140			213,709,102			212,354,140

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

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MOUNTAIN PROVINCE DIAMONDS INC.

Condensed Consolidated Interim Statements of Equity

Expressed in thousands of Canadian dollars, except for the number of shares

(Unaudited)

	Notes			Number of shares		Share capital		Share-based payments reserve			Deficit			Accumulated other comprehensive income		Total
Balance, January 1, 2021					210,490,807	$	631,498	$	6,820		$	(565,952	)	$	1,334	$	73,700
Net income for the period					—		—		—			29,784			—		29,784
Share-based payments		14	(iii)		—		—		430			—			—		430
Balance, June 30, 2021					210,490,807	$	631,498	$	7,250		$	(536,168	)	$	1,334	$	103,914

Balance, January 1, 2022					210,697,474	$	631,717	$	7,469		$	(289,785	)	$	1,334	$	350,735
Net income for the period					—		—		—			46,961			—		46,961
Share-based payments		14	(iii)		—		—		924			—			—		924
Issuance of common shares – restricted share units					211,667		184		(184	)		—			—		—
Balance, June 30, 2022					210,909,141	$	631,901	$	8,209		$	(242,824	)	$	1,334	$	398,620

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

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MOUNTAIN PROVINCE DIAMONDS INC.

Condensed Consolidated Interim Statements of Cash Flows

Expressed in thousands of Canadian dollars

(Unaudited)

			Three months ended			Three months ended			Six months ended			Six months ended
	Notes		June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021
Cash provided by (used in):
Operating activities:
Net income for the period			$	22,634		$	22,472		$	46,961		$	29,784

Adjustments:
Net finance expenses				9,044			10,674			18,184			19,713
Depreciation and depletion				12,378			8,558			21,326			17,076
Premium paid on foreign curency put option				—			—			(696	)		—
Share-based payment expense				480			251			924			430
Fair value loss of warrants				(7,322	)		—			(5,797	)		—
Derivative losses				1,360			811			1,757			22
Foreign exchange losses (gains)				11,792			(5,217	)		7,650			(10,264	)
Deferred income taxes				5,650			—			9,920			—
				56,016			37,549			100,229			56,761
Changes in non-cash operating working capital:
Amounts receivable				3,054			1,373			(264	)		—
Prepaid expenses and other				(401	)		150			(262	)		746
Inventories				(4,078	)		(4,633	)		(58,145	)		(40,706	)
Accounts payable and accrued liabilities				(17,275	)		(11,974	)		2,766			(4,140	)
				37,316			22,465			44,324			12,661
Investing activities:
Restricted cash				(79	)		(29	)		(126	)		(56	)
Interest income				158			72			227			109
Purchase of property, plant and equipment				(9,815	)		(7,846	)		(24,224	)		(18,471	)
				(9,736	)		(7,803	)		(24,123	)		(18,418	)
Financing activities:
Payment of lease liabilities				(76	)		(119	)		(156	)		(266	)
Deferred financing costs				(758	)		—			(1,034	)		—
Net provided by Dunebridge revolving credit facility				—			—			81			—
Provided by Dunebridge term facility				—			37,505			—			37,505
Repayment of Dunebridge term facility				—			(13,638	)		—			(13,638	)
Repurchase of secured notes				(12,528	)		—			(12,528	)		—
Provided by Dunebridge junior credit facility				12,502			—			12,502			—
Financing costs paid		13		(14,814	)		(18,277	)		(14,933	)		(18,836	)
				(15,674	)		5,471			(16,068	)		4,765

Effect of foreign exchange rate changes on cash				102			91			300			378
Increase (decrease) in cash				12,008			20,224			4,433			(614	)
Cash, beginning of period				17,425			14,314			25,000			35,152
Cash, end of period			$	29,433		$	34,538		$	29,433		$	34,538

The accompanying notes are an integral part of these condensed consolidated interim financial statements.

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MOUNTAIN PROVINCE DIAMONDS INC.
Notes to the Condensed Consolidated Interim Financial Statements
For the Three and Six Months Ended June 30, 2022
Amounts in thousands of Canadian Dollars, except share and per share amounts, unless otherwise noted
(Unaudited)

Nature of Operations and going concern

Mountain Province Diamonds Inc. (“Mountain Province” and together with its subsidiaries collectively, the “Company”) was incorporated on December 2, 1986 under the British Columbia Company Act. The Company amended its articles and continued incorporation under the Ontario Business Corporations Act effective May 8, 2006. The Company holds a 49% interest in the operating Gahcho Kué Project (“Gahcho Kué Diamond Mine” or “GK Mine” or “GK Project”) in Canada’s Northwest Territories. The Company also owns 100% of the mineral rights of the Kennady North Project (“KNP”) in Canada’s Northwest Territories.

The address of the Company’s registered office and its principal place of business is 161 Bay Street, Suite 1410, Toronto, ON, Canada, M5J 2S1. The Company’s shares are listed on the Toronto Stock Exchange (“TSX”) under the symbol ‘MPVD’. During the year ended December 31, 2020, the Company voluntarily delisted its common shares from the NASDAQ.

These condensed consolidated interim financial statements have been prepared using the going concern basis of preparation which assumes that the Company will realize its assets and settle its liabilities in the normal course of business.

As of June 30, 2022, the Company faces liquidity challenges as a result of the Senior Secured Notes maturing on December 15, 2022 with a principal amount outstanding of $373,240. The Company does not currently have sufficient cash flows expected from operations available to discharge the Senior Secured Notes amount when they come due. The Company will need to obtain additional financing in the future and/or seek to renegotiate with the holders of the Senior Secured Notes to extend the maturity dates or amend the underlying payment terms. However, there is no guarantee that such financing will be available, or at terms acceptable to the Company, or that holders of the Senior Secured Notes would be willing to renegotiate the amounts in a manner necessary to enable the Company to satisfy its obligations.

The above conditions related to the Company’s Senior Secured Notes and long-term operational financing needs represent material uncertainties that result in substantial doubt as to the Company’s ability to continue as a going concern. These condensed consolidated interim financial statements do not include the adjustments to the amounts and classification of assets and liabilities that would be necessary should the Company be unable to continue as a going concern. These adjustments may be material.

Failure to meet the obligations for cash calls to fund the Company’s share of expenditures at the GK Mine may lead to De Beers Canada Inc. enforcing its remedies under the JV Agreement, which could result in, amongst other things the dilution of Mountain Province’s interest in the GK Mine, and at certain dilution levels trigger cross-default clauses within the Senior Secured Notes.

Authorization of Financial Statements

These condensed consolidated interim financial statements were approved by the Board of Directors on August 9, 2022.

BASIS OF PRESENTATION

These condensed consolidated interim financial statements (the "Interim Financial Statements") have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting ("IAS 34") as issued by the IASB and follow the same accounting policies and methods of application as the annual consolidated financial statements of the Company for the year ended December 31, 2021, except as noted below under Note 3 adoption of new accounting standards.

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These interim financial statements were prepared under the historical cost convention, as modified by the revaluation of derivative assets and liabilities and are presented in thousands of Canadian dollars.

The consolidated financial statements include the accounts of Mountain Province and its wholly-owned subsidiaries:

2435572 Ontario Inc. (100% owned)

2435386 Ontario Inc. (100% owned by 2435572 Ontario Inc.)

Kennady Diamonds Inc. (100% owned)

The Company’s 49% interest in the GK Mine is held through 2435386 Ontario Inc. All intercompany balances, transactions, income, expenses, profits and losses, including unrealized gains and losses have been eliminated on consolidation.

The Company’s interest in the GK Mine through its joint arrangement is a joint operation under IFRS 11, Joint Arrangements, and, accordingly has recorded the assets, liabilities, revenues and expenses in relation to its interest in the joint operation. The Company’s 49% interest in the GK Mine is bound by a contractual arrangement establishing joint control over the mine through required unanimous consent of the Company and De Beers Canada Inc. (“De Beers” or the “Operator”, and together with the Company, the “Participants”) for strategic, financial and operating policies of the GK Mine. The GK Mine management committee has two representatives of each of the Company and De Beers. The Participants have appointed De Beers as the operator of the GK Mine.

ADOPTION OF NEW ACCOUNTING STANDARD

(a)

New accounting standard and amendments effective in the period

IAS 16, Property, Plant and Equipment

Effective January 1, 2022, the Company adopted the amendment to IAS 16, Property, Plant and Equipment which prohibits the deducting from property, plant and equipment amounts received from selling items produced while preparing an asset for its intended use. Instead, sales proceeds and its related costs must be recognized in profit or loss. The amendment requires companies to distinguish between costs associated with producing and selling items before the item of property, plant and equipment is available for use and costs associated with making the item of property, plant and equipment available for its intended use. Upon adoption of the IAS 16 amendment, there was no impact to these condensed consolidated interim financial statements.

Significant ACCOUNTING JUDGMENTS, ESTIMATES And assumptions

The preparation of these interim financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Judgments, estimates and assumptions are continually evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ materially from these estimates. The significant judgments, estimates and assumptions made by management in applying the Company’s accounting policies are consistent with those that applied to the audited financial statements as of and for the year ended December 31, 2021.

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AMOUNTS RECEIVABLE

	June 30,		December 31,
	2022		2021
GST/HST receivable	$	979	$	722
Other receivable		162		155
Total	$	1,141	$	877

6. INVENTORIES

	June 30,		December 31,
	2022		2021
Ore stockpile	$	44,521	$	26,411
Rough diamonds		59,551		44,255
Supplies inventory		73,311		39,166
Total	$	177,383	$	109,832

Depreciation and depletion included in inventories at June 30, 2022 is $25,509 (December 31, 2021 - $12,203).

Included in inventories and production costs, for the three and six months ended June 30, 2022 are the Company’s 49% share of payroll and employee benefits for staff of the GK Mine of $10,659 and $21,384 (three and six months ended June 30, 2021 - $9,607 and $20,498, respectively).

Supplies inventory includes bulk deliveries such as fuel, which are delivered during Q1 utilizing the ‘winter road’ to truck these amounts in, hence the significant increase in the first half of 2022 compared to the prior period.

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7. PROPERTY, PLANT AND EQUIPMENT

The Company’s property, plant and equipment as at June 30, 2022 and December 31, 2021 are as follows:

	Property,			Assets under			Property,			Exploration and
	plant and equipment GK			construction GK			plant and equipment KNP			evaluation assets KNP		Total
Cost
At January 1, 2021	$	902,445		$	6,506		$	1,654		$	169,144	$	1,079,749
Decommissioning and restoration adjustment		12,228			—			—			248		12,476
Additions/transfers*		45,115			3,679			122			—		48,916
Disposals		—			—			(90	)		—		(90	)
At December 31, 2021		959,788			10,185			1,686			169,392		1,141,051
Decommissioning and restoration adjustment		(13,994	)		—			—			—		(13,994	)
Additions/transfers*		29,614			(2,628	)		—			—		26,986
At June 30, 2022	$	975,408		$	7,557		$	1,686		$	169,392	$	1,154,043

Accumulated depreciation and impairment
At January 1, 2021	$	(628,302	)	$	—		$	(36	)	$	—	$	(628,338	)
Depreciation and depletion**		(38,862	)		—			(6	)		—		(38,868	)
Disposals		—			—			42			—		42
Impairment reversal***		240,593			—			—			—		240,593
At December 31, 2021		(426,571	)		—			—			—		(426,571	)
Depreciation and depletion**		(37,519	)		—			(6	)		—		(37,525	)
At June 30, 2022	$	(464,090	)	$	—		$	(6	)	$	—	$	(464,096	)

Carrying amounts
At December 31, 2021	$	533,217		$	10,185		$	1,686		$	169,392	$	714,480
At June 30, 2022	$	511,317		$	7,557		$	1,680		$	169,392	$	689,946

*Included in additions of property, plant and equipment for GK is $21,305 (December 31, 2021 - $34,319) related to deferred stripping of which $2,894 relates to the depreciation of earthmoving equipment (December 31, 2021 - $1,431).

**Included in depreciation and depletion is $97 of depreciation on the right-of-use assets (December 31, 2021 - $134).

***As at December 31, 2021, an impairment reversal of property, plant and equipment was recorded at GK mine.

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decommissioning and restoration liability

The decommissioning and restoration liability is comprised of the liabilities for the GK Mine and the Kennady North Project, which are broken down separately below.

The GK Mine decommissioning and restoration liability was calculated using the following assumptions as at June 30, 2022 and December 31, 2021:

	June 30,			December 31,
	2022			2021
Expected undiscounted cash flows	$	86,677		$	84,128
Nominal risk-free discount rate		3.23	%		1.42	%
Inflation rate		2.00	%		2.00	%
Periods		2030			2030

The decommissioning and restoration liability has been calculated using expected cash flows that are current dollars, with inflation.

During the six months ended June 30, 2022, the GK Mine decommissioning and restoration liability decreased by $16,924 (December 31, 2021 – $19,471), resulting primarily from the change in nominal risk-free discount rate.

The continuity of the decommissioning and restoration liability at June 30, 2022 and December 31, 2021 is as follows:

	GK Mine			KNP		Total
Balance, at January 1, 2022	$	90,418		$	2,695	$	93,113
Change in estimate of discounted cash flows		(16,924	)		—		(16,924	)
Accretion recorded during the period		642			3		645
Balance, at June 30, 2022	$	74,136		$	2,698	$	76,834
Less: current portion of decommissioning and restoration liability		2,436			—		2,436
Non-current decommissioning and restoration liability, at June 30, 2022	$	71,700		$	2,698	$	74,398

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secured notes payable

On December 11, 2017, the Company completed an offering of US$330 million of senior secured notes (“Notes”), secured by a second-ranking lien on all present and future assets, property and undertakings of the Company. The secured notes pay interest in semi-annual instalments on June 15 and December 15 of each year, at a rate of 8.00% per annum, and mature on December 15, 2022. The Company classified the secured notes liability as current liabilities since the notes will mature on December 15, 2022. The indenture governing the secured notes contains certain restrictive covenants that limit the Company’s ability to, among other things, incur additional indebtedness, make certain dividend payments and other restricted payments, and create certain liens, in each case subject to certain exceptions. The restrictive covenant on the Company’s ability to pay potential future dividends relates to a fixed charge coverage ratio of no less than 2:1. The fixed charge coverage ratio is calculated as EBITDA over interest expense. Subject to certain limitations and exceptions, the amount of the restricted payments, which include dividends and share buybacks, is limited to a maximum dollar threshold, which is calculated at an opening basket of US$10 million plus 50% of the historical consolidated net income, subject to certain adjustments, reported from the quarter of issuance and up to the most recently available financial statements at the time of such restricted payment, plus an amount not to exceed the greater of US$15 million and 2% of total assets as defined in the indenture.

As of June 30, 2022, the Company has an obligation of US$289.9 million or $373.2 million Canadian dollar equivalent under the secured notes payable (December 31, 2021 - US$299.9 million or $379.0 million).

	June 30,			December 31,
	2022			2021
Total outstanding secured notes payable	$	373,240		$	379,034
Less: unamortized deferred transaction costs and issuance discount		(1,687	)		(3,517	)
Total secured notes payable	$	371,553		$	375,517

During the six months ended June 30, 2022, US$10 million or approximately $12.9 million Canadian dollar equivalent of secured notes payable was purchased.

Subsequent to the quarter ended June 30, 2022, the Company purchased US$16.42 million or approximately $21.1 million Canadian dollar equivalent of secured notes payable.

10.

dunebridge revolving credit facility and dunbridge term facility

On September 30, 2020, the Company entered into a revolving credit facility with Dunebridge Worldwide Ltd. (“Dunebridge”) (the “Dunebridge RCF”) (Note 19) of up to US$25 million, with first ranking lien terms. The Dunebridge RCF carries an interest rate of 5% per annum, and was initially repayable on September 30, 2021. Interest is payable on a monthly basis. The agreement also required an upfront 1% financing fee, which was paid on September 30, 2020. The Dunebridge RCF is not subject to any financial covenants. A default would occur if the Company is unable to make the monthly interest payments, or the principal repayment.

The Dunebridge RCF includes various restrictive covenants which requires that no additional indebtedness be entered into, and no new agreements related to the sale of diamonds, beyond what currently exists, without prior written approval from Dunebridge.

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Under the Dunebridge RCF, permitted distributions to third parties (which include dividends) are subject to the Company having a net debt to EBITDA ratio of less than or equal to 1.75:1. Net debt is equal to total debt, less cash and cash equivalents. The aggregate amount of all distributions paid during the rolling four quarters up to and including the date of such distribution does not exceed 25% of free cash flows (“FCF”) during such period. FCF is defined as EBITDA minus, without duplication, (a) capital expenditures, (b) cash taxes, (c) any applicable standby fee, other fees or finance costs payable to the finance parties in connection with the Dunebridge RCF, (d) interest expenses and (e) any indebtedness (including mandatory prepayments) permitted under the existing agreement. Also, the available liquidity after payment of a distribution must be greater than or equal to US$60 million for distributions paid during a quarter ending March 31, or US$50 million for other quarters, where the aggregate amount of the all-advances outstanding does not exceed US$10 million.

On September 24, 2021, the Dunebridge RCF repayment date was extended to March 31, 2022, with the same restrictive covenants described above. An upfront 2% extension fee of US$0.5 million was paid. The Dunebridge RCF had an interest rate of 5% per annum and it has been fully repaid and terminated.

The upfront fee was categorized as deferred financing fee against the loan and amortized over the term of the loan. As at December 31, 2021, $319 unamortized deferred financing fee was remaining and classified as other assets on the consolidated balance sheet and was fully amortized on March 31, 2022.

During the six months ended June 30, 2022, the Company drew and repaid US$5M from the Dunebridge RCF for funding operations. The Dunebridge RCF was terminated prior to the quarter ended March 31, 2022.

11.

Dunebridge junior credit facility

On March 28, 2022, the Company completed a US$50M credit facility with Dunebridge bearing a cash payment interest rate of 8% per annum or an effective interest rate of 15.8%, paid semi-annually until December 2022. Following this date, the interest rate will be 2% above the margin on the senior secured notes payable then outstanding. The maturity date of this credit facility is December 15, 2027. The Dunebridge Junior Credit Facility (“Dunebridge JCF”) is secured by substantially all of the properties and assets of the Company and its subsidiaries on a junior basis to the Company’s existing senior secured notes payable. The Company is entitled to prepay the Dunebridge JCF at any time prior to the maturity date without penalty.

In order for the Company to request an advance under the Dunebridge JCF, the Company must deliver a utilization request to the administrative agent and confirm that the Company has met the conditions precedent to all borrowings, confirm representation and warranties and confirm that the proceeds requested are to be used as agreed upon in the agreement to (a) repay indebtedness under the senior credit agreement, by way of direction and set-off on the closing date, (b) repay the senior secured notes, and (c) for general corporate purposes, including working capital needs.

The Company issued to Dunebridge 41 million common share purchase warrants (Note 12), exercisable in whole or in part at any time up to December 15, 2027 at an exercise price of US$0.60975 per common share.

Page | 14

The Company incurred legal and advisory fees in relation to the Dunebridge Junior Credit Facility (“Dunebridge JCF”) of $1,082 which was capitalized as other assets. In addition, the fair value of the warrants granted on closing of the Dunebridge JCF valued at $0.33 per warrant and totaling $13,489 was also capitalized resulting in a total other asset of $14,571. On April 20, 2022, $2.9 million of total costs capitalized to other assets were accounted for as a deferred financing costs given the $10 million drawn on Dunebridge JCF during the three-month period ended June 30, 2022. The remaining portion of the other assets is being amortized over the life of the credit facility.

As of June 30, 2022, the Company has an obligation of US$10 million or $12.9 million Canadian dollar equivalent under the Dunebridge JCF (December 31, 2021 - $Nil).

	June 30,			December 31,
	2022			2021
Total outstanding Dunebridge junior credit facility	$	12,873		$	—
Less: unamortized deferred transaction costs		(2,810	)		—
Total Dunebridge junior credit facility	$	10,063		$	—

Subsequent to the quarter ended June 30, 2022, the Company drew an additional US$5 million or approximately $6.4 million Canadian dollar equivalent from the Dunebridge JCF, which resulted in allocation of approximately $1.5 million of other assets as stated above.

12.

Warrant liability

As part of the Dunebridge JCF (Note 11), 41 million share warrants were issued at an exercise price of US$0.60975 per common share with an expiry date of December 15, 2027. The warrants have an exercise price denominated in US dollars, which differs from the Company’s Canadian dollar functional currency, and are therefore accounted for as derivative liabilities at fair value, with changes in fair value recorded in earnings as they occur.

The warrants were valued on the date of grant using the following assumptions:

	March 28,
	2022
Exercise price	US$0.60975 ($0.7726)
Expected volatility	61.72%
Expected warrant life	5.7 years
Expected forfeiture	none
Expected dividend yield	0%
Risk-free interest rate	2.42%
Weighted average fair value per warrant granted	$0.33

In valuing the warrants on March 28, 2022, the Company applied a liquidity discount of 32% from the Black-Scholes value.

Page | 15

As at June 30, 2022, the warrants were revalued using the following assumptions, resulting in a total value of $7,692:

	June 30,
	2022
Exercise price	US$0.60975 ($0.7996)
Expected volatility	63.00%
Expected warrant life	5.5 years
Expected forfeiture	none
Expected dividend yield	0%
Risk-free interest rate	3.49%
Weighted average fair value per warrant granted	$0.21

In valuing the warrants on June 30, 2022, the Company applied a liquidity discount of 31% from the Black-Scholes value.

13.

net finance expense

	Three months ended			Three months ended			Six months ended			Six months ended
	June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021
Interest income	$	158		$	72		$	227		$	109
Accretion expense on decommissioning and restoration liability		(322	)		(119	)		(645	)		(239	)
Interest expense		(7,884	)		(8,724	)		(15,447	)		(16,790	)
Amortization of deferred financing costs		(989	)		(1,867	)		(2,184	)		(2,710	)
Other finance costs*		(17	)		(52	)		(157	)		(116	)
	$	(9,054	)	$	(10,690	)	$	(18,206	)	$	(19,746	)

*Included in other finance costs for the three and six months ended June 30, 2022 is $10 and $22 (three and six months ended June 30, 2021 - $16 and $33, respectively) related to interest on lease liabilities.

14.

SHAREHOLDERS’ EQUITY

Authorized share capital

Unlimited common shares, without par value.

ii.

Share capital

The number of common shares issued and outstanding as at June 30, 2022 is 210,909,141 (December 31, 2021 – 210,697,474).

iii.

Stock options, RSUs, DSUs and share-based payments reserve

The Company has a long-term equity incentive plan (the “Plan”) which, among other things, allows for the maximum number of shares that may be reserved for issuance under the Plan to be 10% of the Company’s issued and outstanding shares at the time of the grant. The Board of Directors has the authority and discretion to grant stock options, restricted share units (“RSU”) and deferred share units (“DSU”) awards within the limits identified in the Plan, which includes provisions limiting the issuance of options to directors and employees of the Company to maximums identified in the Plan.

Page | 16

As at June 30, 2022, the aggregate maximum number of shares pursuant to options granted under the Plan will not exceed 21,090,914 shares. All stock options are settled by the issuance of common shares.

The following table summarizes information about the stock options outstanding and exercisable:

	Six months ended June 30, 2022					Six months ended June 30, 2021
	Number of options			Weighted average exercise price		Number of options			Weighted average exercise price
Balance at beginning of the period		4,680,001		$	1.36		2,455,002		$	2.89
Granted during the period		3,101,042			0.71		1,085,000			0.65
Expired during the period		(100,000	)		5.86		(100,000	)		6.35
Balance at end of the period		7,681,043		$	1.04		3,440,002		$	2.09
Options exercisable at the end of the period		1,713,334		$	1.55		1,678,336		$	3.33

The fair value of the stock options granted have been estimated on the date of grant using the Black-Scholes option pricing model. The assumptions are presented below for options granted during the June 30, 2022 and June 30, 2021 period. Expected volatility is calculated by reference to the weekly closing share price for a period that reflects the expected life of the options. A total of 3,101,042 stock options were issued during the three months ended March 31, 2022, with an exercise price of $0.714. The 2,439,668 stock options will vest 1/3 on January 17, 2023, 1/3 on January 17, 2024 and 1/3 on January 17, 2025, the 661,376 stock options will vest 1/3 on February 21, 2023, 1/3 February 21, 2024 and 1/3 February 21, 2025. A total of 1,085,000 stock options were issued during the three months ended March 31, 2021 vesting 1/3 on February 3, 2022, 1/3 on February 3, 2023 and 1/3 on February 3, 2024.

	June 30,	June 30,
	2022	2021
Weighted average exercise price per share	$0.71	$0.65
Expected volatility	64.43% - 64.68%	59.38%
Expected option life	5 years	5 years
Contractual option life	5 years	5 years
Expected forfeiture	none	none
Expected dividend yield	0%	0%
Risk-free interest rate	1.68% - 1.79%	0.46%
Weighted average fair value per option granted	$0.39	$0.32

The following tables reflect the number of stock options outstanding, the grant date fair value, and the exercise price of stock options outstanding at June 30, 2022.

Page | 17

At June 30, 2022
	Grant Date		Number of		Number of		Exercise
Expiry Date	Fair Value		Options		Exercisable Options		Price

December 21, 2022		644		605,000		605,000		3.48
June 30, 2023		203		200,000		200,000		3.30
December 27, 2024		372		930,000		626,667		1.30
February 2, 2026		268		845,001		281,667		0.65
November 15, 2026		675		2,000,000		—		0.62
January 17, 2027		958		2,439,666		—		0.71
February 21, 2027		260		661,376		—		0.71
	$	3,380		7,681,043		1,713,334	$	1.04

The weighted average remaining contractual life of the options outstanding at June 30, 2022 is 3.76 years (December 31, 2021 - 3.60 years).

The restricted and deferred share unit plans are full value phantom shares that mirror the value of the Company’s publicly traded common shares. Grants under the RSU and DSU plan are made on a discretionary basis to directors and employees of the Company subject to the Board of Directors’ approval. Under the RSU and DSU plan, RSUs and DSUs vest according to the terms set out in the award agreement which are determined on the initial grant date on an individual basis at the discretion of the Board of Directors. Vesting under the RSU and DSU plan is subject to special rules for death, disability and change in control. The awards can be settled through issuance of common shares or paid in cash, at the discretion of the Board of Directors. These awards are accounted for as equity settled RSUs.

The fair value of each RSU issued is determined at the closing share price on the grant date.

The following table shows the RSU awards which have been granted and settled during the period:

	June 30, 2022				June 30, 2021
RSU	Number of units		Weighted average value grant date fair value		Number of units		Weighted average value grant date fair value
Balance at beginning of period	1,426,667		$	0.87		863,333	$	1.13
Awards and payouts during the period (net):
RSUs awarded	1,196,914			0.71		1,000,000		0.64
RSUs settled and common shares issued	(211,667	)		0.87		—		—
RSUs forfeited	(76,022	)		0.69		—		—
Balance at end of the period*	2,335,892		$	0.80		1,863,333	$	0.87

*As at June 30, 2022, 531,671 RSUs (December 31, 2021 – 420,002 RSUs) have vested and have not yet been settled.

No DSU awards have been granted to date, therefore as at June 30, 2022 there are no DSUs outstanding.

Page | 18

The share-based payments recognized as an expense for the three and six months ended June 30, 2022 and 2021 are as follows:

	Three months ended		Three months ended		Six months ended		Six months ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Expense recognized in the period
for share-based payments	$	480	$	251	$	924	$	430

The share-based payment expense for the three and six months ended June 30, 2022 and 2021 is included in selling, general and administrative expenses.

iv.

Earnings per share

The following table sets forth the computation of basic and diluted earnings per share:

		Three months ended	Three months ended	Six months ended	Six months ended
		June 30, 2022	June 30, 2021	June 30, 2022	June 30, 2021
Numerator
	Net income for the period	$ 22,634	$ 22,472	$ 46,961	$ 29,784
	Effect of dilutive securities	166	-	339	-
		$ 22,800	$ 22,472	$ 47,300	$ 29,784

Denominator
	For basic - weighted average number of shares outstanding	210,909,141	210,490,807	210,839,500	210,490,807
	Effect of dilutive securities	2,730,232	1,863,333	2,869,602	1,863,333
	For diluted - adjusted weighted average number of shares outstanding	213,639,373	212,354,140	213,709,102	212,354,140

Earnings Per Share
	Basic	$ 0.11	$ 0.11	$ 0.22	$ 0.14
	Diluted	$ 0.11	$ 0.11	$ 0.22	$ 0.14

For the three and six months ended June 30, 2022, 7,286,703 and 7,147,333 stock options, respectively and 41 million warrants were not included in the calculation of diluted earnings per share since to include them would be anti-dilutive (three and six months ended June 30, 2021 - 3,440,002 stock options).

15.

Selling, general and administrative expenses

	Three months ended		Three months ended		Six months ended		Six months ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Selling and marketing	$	1,369	$	859	$	2,510	$	2,056
General and administrative:
Consulting fees and payroll		674		436		1,833		876
Share-based payment expense		480		251		924		430
Depreciation		57		54		111		109
Office and administration		264		257		564		471
Professional fees		441		585		924		857
Promotion and investor relations		91		57		131		57
Director fees		205		117		409		234
Transfer agent and regulatory fees		147		59		265		192
Travel		75		1		126		3
	$	3,803	$	2,676	$	7,797	$	5,285

Page | 19

16.

Derivatives Assets and Liabilities

During the six months ended June 30, 2022 and the year ended December 31, 2021, the Company entered into foreign currency put options to mitigate the foreign currency risk associated with the U.S. dollar sales proceeds and the risk that the Company would not have sufficient Canadian dollar funds to contribute to the operations of the GK Mine. These derivatives have been accounted as non-hedge derivatives and are recorded at fair value. Changes in fair value of the foreign currency put option contracts are recognized in the condensed consolidated interim statements of comprehensive income as gains or losses on derivatives.

At June 30, 2022, the Company had US$36 million foreign currency collar contracts outstanding at a strike price of 1.26 with settlement dates from July 2022 to December 2022. On settlement date, if the spot rate exceeds 1.33, the Company will settle at a strike price of 1.27, if the spot rate is between 1.26 to 1.33, there is no obligatory settlement. The Company also had a further US$21 million foreign currency collar contracts at a strike price of 1.28 with settlement dates from July 2022 to December 2022. On settlement date, if the spot rate exceeds 1.35, the Company will settle at a strike price of 1.30, if the spot rate is between 1.28 to 1.35, there is no obligatory settlement.

Subsequent to the six months ended June 30, 2022, the Company entered into additional foreign currency collar contracts of US$21 million at a strike price of 1.275 with settlement dates from July 2022 to December 2022. On settlement date, if the spot rate exceeds 1.355, the Company will settle at a strike price of 1.28, if the spot rate is between 1.275 to 1.355, there is no obligatory settlement.

ii)

The notes indentures grant the Company the option to prepay the notes prior to the maturity of the instruments, and specifies a premium during each applicable time period. These prepayment options have been accounted for as embedded derivatives at fair value through profit and loss and are outlined below. The Company may redeem the secured notes in whole or in part at any time during the twelve-month period beginning on December 15, 2021 at a redemption price equal to 100% of the principal amount of the secured notes redeemed, plus accrued and unpaid interest to the date of redemption.

Page | 20

The following table presents the various derivatives assets and liabilities as at June 30, 2022 and December 31, 2021:

	June 30,			December 31,
	2022			2021
Currency derivative contracts	$	(148	)	$	731
Current portion of embedded derivatives		206			44
Total	$	58		$	775

The following table presents amounts recognized in the Condensed Consolidated Interim Statement of Comprehensive Income for the three and six months ended June 30, 2022 and 2021:

	Three months ended			Three months ended			Six months ended			Six months ended
	June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021
Loss on currency derivative contracts	$	(1,280	)	$	—		$	(1,591	)	$	—
(Loss) gain on prepayment option embedded derivative		(81	)		(811	)		153			(22	)
Total	$	(1,361	)	$	(811	)	$	(1,438	)	$	(22	)

17.

Financial instruments

Fair value measurement

The Company categorizes each of its fair value measurements in accordance with a fair value hierarchy. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices in markets that are not active, quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (for example, interest rate and yield curves observable at commonly quoted intervals, forward pricing curves used to value currency and commodity contracts and volatility measurements used to value option contracts), or inputs that are derived principally from or corroborated by observable market data or other means. Level 3 inputs are unobservable (supported by little or no market activity).

The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs.

The fair values of the accounts receivable and accounts payable and accrued liabilities approximate their carrying values due to the relatively short-term maturity of these financial instruments.

The following table shows the carrying amounts and fair values of the Company’s financial assets and financial liabilities, including their levels in the fair value hierarchy.

Page | 21

	Carrying amount								Fair value
June 30, 2022	Assets at amortized cost		Fair value through profit and loss		Liabilities at amortized cost		Total		Level 1		Level 2		Level 3		Total
Financial assets measured at fair value
Derivative assets	$	—	$	206	$	—	$	206	$	—	$	206	$	—	$	206
	$	—	$	206	$	—	$	206
Financial assets not measured at fair value
Cash	$	29,433	$	—	$	—	$	29,433		29,433		—		—		29,433
Restricted cash		25,270		—		—		25,270		25,270		—		—		25,270
Amounts receivable		1,141		—		—		1,141		1,141		—		—		1,141
	$	55,844	$	—	$	—	$	55,844
Financial liabilities measures at fair value
Derivative liabilities	$	—	$	148		—	$	148		—		148		—		148
Warrant liability		—		7,692		—		7,692		—		—		7,692		7,692
	$	—	$	7,840	$	—	$	7,840
Financial liabilities not measured at fair value
Accounts payable and accrued liabilities	$	—	$	—	$	39,883	$	39,883		39,883		—		—		39,883
Dunebridge revolving credit facility		—		—		—		—		—		—		—		—
Dunebridge junior credit facility		—		—		10,063		10,063		—		12,873		—		12,873
Secured notes payable		—		—		371,553		371,553		362,274		—		—		362,274
	$	—	$	—	$	421,499	$	421,499

	Carrying amount								Fair value
December 31, 2021	Assets at amortized cost		Fair value through profit and loss		Liabilities at amortized cost		Total		Level 1		Level 2		Level 3		Total
Financial assets measured at fair value
Derivative assets	$	—	$	775	$	—	$	775	$	—	$	775	$	—	$	775
	$	—	$	775	$	—	$	775
Financial assets not measured at fair value
Cash	$	25,000	$	—	$	—	$	25,000		25,000		—		—		25,000
Restricted cash		25,144		—		—		25,144		25,144		—		—		25,144
Amounts receivable		877		—		—		877		877		—		—		877
	$	51,021	$	—	$	—	$	51,021
Financial liabilities not measured at fair value
Accounts payable and accrued liabilities	$	—	$	—	$	36,893	$	36,893		36,893		—		—		36,893
Secured notes payable		—		—		375,517		375,517		357,607		—		—		357,607
	$	—	$	—	$	412,410	$	412,410

Fair values of assets and liabilities classified as Level 2 are valued using discounted cash flow (“DCF”) models. These models require a variety of observable inputs including market prices, forward price curves, yield curves and credit spreads. Derivative assets are carried at fair value which is determined based on internal valuation model that reflect the observable currency exchange rates in the markets. These inputs are obtained from or verified with the market where possible. The financial assets relate to the embedded derivative assets, which are prepayment options on the secured notes payable (Note 9) and foreign currency put option contracts (Note 16). The level 3 financial liability relates to warrants which is accounted for as derivative liabilities at fair value, with changes in fair value recorded to earnings as they occur (Note 12).

Page | 22

The fair value of the secured notes payable is determined using market quoted prices.

18.

COMMITMENTS

The following table summarizes the contractual maturities of the Company’s significant financial liabilities and capital commitments, including contractual obligations:

	Less than		1 to 3		4 to 5		After 5
	1 Year		Years		Years		Years		Total
Gahcho Kué Diamond Mine commitments	$	1,374	$	—	$	—	$	—	$	1,374
Gahcho Kué Diamond Mine decommissioning fund		10,000		20,000		—		—		30,000
Revolving Junior Credit facility - Principal		—		—		12,873		—		12,873
Revolving Junior Credit facility - Interest		1,170		3,862		1,877		—		6,909
Notes payable - Principal		373,240		—		—		—		373,240
Notes payable - Interest		14,930		—		—		—		14,930
	$	400,713	$	23,862	$	14,750	$	—	$	439,326

19.

RELATED PARTIES

The Company’s related parties include Dermot Desmond, Dunebridge and Vertigol Unlimited Company (“Vertigol”) (corporations ultimately beneficially owned by Dermot Desmond), the Operator of the GK Mine, key management and their close family members, and the Company’s directors. Dermot Desmond, indirectly through Vertigol, is the ultimate beneficial owner of greater than 10% of the Company’s shares. International Investment and Underwriting (“IIU”) is also a related party since it is ultimately beneficially owned by Dermot Desmond.

Related party transactions are recorded at their exchange amount, being the amount agreed to by the parties.

The Company had the following transactions and balances with its related parties including key management personnel including the Company’s directors, Dermot Desmond, Dunebridge, Vertigol, IIU and the Operator of the GK Mine. The transactions with key management personnel and directors are in the nature of remuneration. The transactions with the Operator of the GK Mine relate to the funding of the Company’s interest in the GK Mine for the current year’s expenditures, capital additions, management fee, and production sales related to the 49% share of fancies and special diamonds. The transactions with IIU are for the director fees of the Chairman of the Company.

On March 28, 2022, the Company executed a credit facility with Dunebridge, for US$50 million (Note 11).

On September 24, 2021, the Dunebridge RCF was extended to March 31, 2022 (Note 10).

Between 2014 and 2020, the Company and De Beers signed agreements allowing De Beers (“the Operator”) to utilize De Beers’ credit facilities to issue reclamation and restoration security deposits to the federal and territorial governments. In accordance with these agreements, the Company agreed to a 3% fee annually for the Company’s share of the letters of credit issued. In 2020, the Company and De Beers signed an agreement to reduce the fee from 3% to 0.3%, annually, for their share of the letters of credit issued. Furthermore, a resolution was passed by the joint venture management committee to establish a decommissioning fund, where the Company will fund $15 million in 2020, and $10 million each year for four years thereafter until the Company’s 49% share totaling $55 million is fully funded. The target funding can change over time, dependent on future changes to the decommissioning and restoration liability and returns on decommissioning fund investments. During the six months ended June 30, 2022, the Company funded $Nil (year ended December 31, 2021 - $10 million) into the decommissioning fund, which is presented as restricted cash on the balance sheet.

Page | 23

As at June 30, 2022, the Company’s share of the letters of credit issued were $44.7 million (December 31, 2021 - $44.1 million).

Failure to meet the obligations for cash calls to fund the Company’s share in the GK Mine may lead to De Beers enforcing its remedies under the JV Agreement, which could result in, amongst other things the dilution of Mountain Province’s interest in the GK Mine, and at certain dilution levels trigger cross-default clauses within the Senior Notes.

The balances as at June 30, 2022 and December 31, 2021 were as follows:

	June 30,		December 31,
	2022		2021
Payable De Beers Canada Inc. as the operator of the GK Mine*	$	6,549	$	2,732
Payable to De Beers Canada Inc. for interest on letters of credit		68		99
Payable to Dunebridge Worldwide Ltd.		13,073		—
Payable to key management personnel		82		67

*included in accounts payable and accrued liabilities

The transactions for the three and six months ended June 30, 2022 and 2021 were as follows:

	Three months ended		Three months ended		Six months ended		Six months ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
The total of the transactions:
International Investment and Underwriting	$	30	$	30	$	60	$	60
Remuneration to key management personnel		902		514		1,846		1,004
Upside revenue on diamonds sold to Dunebridge Worldwide Ltd.		—		10,399		—		10,399
Diamonds sold to De Beers Canada Inc.		5,027		2,392		5,027		4,665
Diamonds purchased from De Beers Canada Inc.		5,142		3,579		11,682		4,828
Finance costs incurred from De Beers Canada Inc.		35		32		68		68
Finance costs incurred from Dunebridge Worldwide Ltd.		200		3,339		228		3,834
Management fee charged by the Operator of the GK Mine		833		1,191		1,666		2,382

The remuneration expense of directors and other members of key management personnel for the three and six months ended June 30, 2022 and 2021 were as follows:

	Three months ended		Three months ended		Six months ended		Six months ended
	June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Consulting fees, payroll, director fees, bonus and other short-term benefits	$	637	$	407	$	1,341	$	829
Share-based payments		295		137		565		235
	$	932	$	544	$	1,906	$	1,064

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly, including any directors (executive and non-executive) of the Company. In addition to the directors of the Company, key management personnel include the Chief Executive Officer (“CEO”) and Chief Financial Officer.

Page | 24

20.

SEGMENTED REPORTING

The reportable operating segments are those operations for which operating results are reviewed by the CEO who is the chief operating decision maker regarding decisions about resources to be allocated to the segment and to assess performance provided those operations pass certain quantitative thresholds. Operations with revenues, earnings or losses or assets that exceed 10% of total consolidated revenue, earnings or losses or assets are reportable segments.

As a result of the asset acquisition of Kennady, which included all mineral rights of the KNP, the Company now owns multiple diamond projects in the Northwest Territories, Canada. The GK Mine is a diamond mine in operations, while the KNP resource continues to be developed through exploration and evaluation programs.

As at and for the six months ended June 30, 2022

		GK Mine			KNP			Total

Sales	$	182,414		$	—		$	182,414
Cost of sales:
Production costs		53,780			—			53,780
Cost of acquired diamonds		13,197			—			13,197
Depreciation and depletion		21,215			—			21,215

Earnings from mine operations		94,222			—			94,222
Exploration and evaluation expenses		1,226			7,134			8,360
Selling, general and administrative expenses		7,781			16			7,797

Operating income (loss)		85,215			(7,150	)		78,065
Net finance expenses		(18,206	)		—			(18,206	)
Other income		5,797			85			5,882
Derivative losses		(1,438	)		—			(1,438	)
Foreign exchange losses		(7,422	)		—			(7,422	)

Net income (loss) before taxes	$	63,946		$	(7,065	)	$	56,881

Total assets	$	764,174		$	171,843		$	936,017
Total liabilities	$	534,086		$	3,311		$	537,397

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As at and for the three months ended June 30, 2022

		GK Mine			KNP			Total

Sales	$	97,761		$	—		$	97,761
Cost of sales:
Production costs		26,660			—			26,660
Cost of acquired diamonds		7,373			—			7,373
Depreciation and depletion		12,321			—			12,321

Earnings from mine operations		51,407			—			51,407
Exploration and evaluation expenses		863			3,694			4,557
Selling, general and administrative expenses		3,794			9			3,803

Operating income (loss)		46,750			(3,703	)		43,047
Net finance expenses		(9,054	)		—			(9,054	)
Other income		7,322			—			7,322
Derivative losses		(1,361	)		—			(1,361	)
Foreign exchange losses		(11,670	)		—			(11,670	)

Net income (loss) before taxes	$	31,987		$	(3,703	)	$	28,284

Total assets	$	764,174		$	171,843		$	936,017
Total liabilities	$	534,086		$	3,311		$	537,397

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As at and for the three months ended June 30, 2021

		GK Mine			KNP			Total

Sales	$	75,147		$	—		$	75,147
Cost of sales:
Production costs		30,984			—			30,984
Cost of acquired diamonds		2,860			—			2,860
Depreciation and depletion		8,504			—			8,504

Earnings from mine operations		32,799			—			32,799
Exploration and evaluation expenses		77			1,290			1,367
Selling, general and administrative expenses		2,645			31			2,676

Operating income (loss)		30,077			(1,321	)		28,756
Net finance expenses		(10,688	)		(2	)		(10,690	)
Derivative losses		(811	)		—			(811	)
Foreign exchange gains		5,217			—			5,217

Net income (loss) before taxes	$	23,795		$	(1,323	)	$	22,472

Total assets	$	461,672		$	171,056		$	632,728
Total liabilities	$	525,805		$	3,009		$	528,814

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As at and for the six months ended June 30, 2021

		GK Mine			KNP			Total

Sales	$	129,371		$	—		$	129,371
Cost of sales:
Production costs		58,135			—			58,135
Cost of acquired diamonds		7,734			—			7,734
Depreciation and depletion		16,967			—			16,967

Earnings from mine operations		46,535			—			46,535
Exploration and evaluation expenses		258			1,704			1,962
Selling, general and administrative expenses		5,248			37			5,285

Operating income (loss)		41,029			(1,741	)		39,288
Net finance expenses		(19,743	)		(3	)		(19,746	)
Derivative losses		(22	)		—			(22	)
Foreign exchange gains		10,264			—			10,264

Net income (loss) before taxes	$	31,528		$	(1,744	)	$	29,784

Total assets	$	461,672		$	171,056		$	632,728
Total liabilities	$	525,805		$	3,009		$	528,814

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