Mountain Province owns 49% of the Gahcho Kue mine in Canada's Northwest Territories, operated by majority owner De Beers.
"The cancellation of the sale coincided with our usual high cash spend during the annual winter road supply exercise, this meant that we faced some short-term liquidity challenges," president and CEO Stuart Brown said.
He said the company's loan with Dunebridge World would address this issue and allow Mountain Province time to execute on a revised mine plan.
"This plan shows us largely making up the lost production, revenue and cash generation during 2021 and should allow us to repay this loan by the end of 2021," he said.
Mountain Province expects Gahcho Kue to recover 6.3-6.5 million carats this year, on a 100% basis, with the process plant throughput expected to benefit from a planned production mitigation strategy to change to 1.1mm cut-off screens, up from 0.8mm.
The mine treated 625,582 tonnes in the March quarter, 31% less than the previous corresponding period, with 1.4 million carats recovered, a 16% drop.
However the average grade improved 22% to 2.23ct per tonne.
Mountain Province received $54.2 million from 603,000 carats sold, resulting in an average $90/ct (US$71/ct), a 6% increase on the December quarter and "a near-return to pre-pandemic pricing levels seen in Q1" of US$75/ct.
"With a tough quarter behind us, our focus now shifts to making up the carat shortfall, and revenue over the remainder of 2021," Brown said.
"There will, no doubt, still be issues to deal with in the coming months such as the intense second wave in India, hopefully with all the work being done and support we will see a recovery in India and all participants in the industry will benefit from the continued desire for natural diamonds."
Diamond demand was battered in 2020 and faces increasing competition from the emerging lab-made sector offering more affordable lookalikes.
Mountain Province reported adjusted EBIDTA of C$19.1 million for the quarter.
Its net income was $7.3 million compared with a $41 million loss a year earlier.
Its shares (TSX: MPVD) have ranged from 25-82c over the past year and closed up 1% yesterday to 50c, capitalising it at $105 million (US$86 million).