Mountain Province Diamonds announces planned strengthening of its balance sheet


TORONTO and NEW YORK, December 29, 2021 / CNW / – Diamonds from the Mountain Province Inc. (“Mountain province“or the”Society“) (TSX: MPVD) (OTCQX: MPVD) announces today that it has signed a non-binding terms sheet with its major shareholder, Mr. Dermot Desmond, for a proposal for a balance sheet strengthening program in order to offer greater financial flexibility to the Company (the “”Proposed arrangement“). Although the provisions are non-binding, Mountain province is working with Mr. Desmond with the goal of entering into binding agreements in early 2022. The proposed arrangement is subject to, among other things, the finalization of its specific terms, negotiation and execution of final documentation, as well approval by shareholders and regulators.

The proposed arrangement is subject to the related party transaction requirements under NI 61-101 Protection of holders of minority securities in special transactions (“MI 61-101“). The Proposed Arrangement is also subject to the approval of the Toronto Stock Exchange (the”TSX“) and the approval of disinterested shareholders of the Company in accordance with NI 61-101 and the rules of the TSX.

At November 9, 2021, the Board of Directors of the Company (the “advice“) has formed a special committee (the”Special committee“) in connection with the review and monitoring of the proposed arrangement as well as any other potential alternative transaction aimed at improving the short and long term financial liquidity needs of the Company. The Special Committee is composed of independent directors who have no direct or indirect interest in As a result of its review process, the Special Committee recommended that the Board approve the signing of the Terms of Reference setting out the terms of the proposed arrangement.

The proposed arrangement is currently expected to include the issuance of approximately US $ 50 million new indebtedness to an entity controlled by Mr. Desmond that is guaranteed on a subordinate basis to the existing indebtedness of the Company (the “New Notes“), as well as an equity component. The New Bonds are expected to mature at the end of 2027. The Company expects to use a portion of the proceeds from the New Bonds to repay the US $ 25 million Senior revolving credit facility provided by Dunebridge Worldwide Ltd., an entity controlled by Mr. Desmond, which matures on March 31, 2022.

Once implemented, the proposed arrangement would provide the Company with increased financial flexibility and provide increased working capital, the ability to accelerate existing note buybacks and / or enhanced exploration activities on its Kennady project. North 100% owned.

The proposed arrangement is subject to the signing of the final documentation and the approvals described above. There can be no assurance that the Proposed Arrangement will be completed on the terms described herein or at all.

Mark the wall, President and CEO of the Company, said:

“This investment planned by our largest shareholder and holder of a significant debt, Mr. Dermot Desmond, once again demonstrates its confidence in Mountain Province Diamonds and the strong macro-environment of our diamonds. In addition, this planned investment reinforces my own optimism as we look to a broader optimization of the capital structure in 2022. “

About the company

Diamonds from the Mountain Province is a 49% participant with De Beers Canada in the Gahcho Kué diamond mine located in from Canada Northwest Territories. The Gahcho Kué joint venture property consists of several kimberlites which are actively mined, developed and explored for future development. The Company also controls 107,373 hectares of highly promising mineral claims and leases surrounding the Gahcho Kué mine, which include an indicated mineral resource for the Kelvin kimberlite and inferred mineral resources for the Faraday kimberlites. Kelvin is estimated at 13.62 million carats (Mct) in 8.50 million tonnes (Mt) at a grade of 1.60 carats / tonne and a value of 63 USD/carat. Faraday 2 is estimated at 5.45Mct in 2.07Mt at a grade of 2.63 carats / ton and a value of 140 USD/ ct. Faraday 1-3 is estimated at 1.90Mct in 1.87Mt at a grade of 1.04 carats / ton and a value of 75 USD/carat. All resource estimates are based on a smaller cut-off of 1mm in diameter.

For more information on Mountain Province Diamonds and to receive email press releases, visit the company’s website at www.mountainprovince.com.

Qualified person

The disclosure in this press release of scientific and technical information concerning Mountain province mining properties has been reviewed and approved by Tom E. McCandless, Ph.D., P.Geo., And Matthew MacPhail, P.Eng, MBA, both employees of Mountain Province Diamonds and qualified persons as defined by National Instrument 43-101 Disclosure standards for mining projects.

Caution regarding forward-looking information

This press release contains certain “forward-looking statements” and “forward-looking information” under applicable securities laws in Canada and the United States concerning the business, operations and financial performance and condition of Mountain Province Diamonds Inc. the information includes, without limitation, statements regarding the ability to negotiate and enter into binding documents, the ability to obtain the approval of parties, regulators and shareholders on terms acceptable to Mountain Province, operational risks, including possible disruptions from pandemic such as COVID-19, its impact on travel, self-isolation protocols and activities and operations, estimated production and mine life of the project of Mountain Province; carrying out mineral reserve estimates; the timing and amount of estimated future production; production costs; the future price of diamonds; estimation of mineral reserves and resources; the ability to manage debt; capital expenditure; the ability to obtain operating permits; liquidity; tax rates; and fluctuations in exchange rates. Except for statements of historical fact concerning Mountain Province, certain information contained in this document constitutes forward-looking statements. Forward-looking statements are often characterized by words such as “expect”, “may”, “may”, “may”, “plans”, “believes”, “believes”, “expects”, “plans”, “Objectives”, “intention,” “probably”, “will”, “should”, “be”, “potential” and other similar words, or statements that certain events or conditions “may”, ” should ”or“ would occur ”. Forward-looking statements are based on the opinions and estimates of management as of the date the statements are made, and are based on a number of assumptions and are subject to a variety of risks and uncertainties and others. factors that could cause actual events or results to differ. substantially from those projected in the forward-looking statements. Many of these assumptions are based on factors and events beyond the control of Mountain Province and there can be no assurance that they will prove to be correct.

Factors that could cause actual results to differ materially from the results anticipated by such forward-looking statements include the trading positions taken by the parties, the ability to obtain regulatory, party and shareholder approval, if any, at conditions acceptable to the parties, the development of operational hazards that may arise in relation to COVID-19, including, but not limited to, protocols that may be adopted to reduce the spread of COVID-19 and any impact of these protocols on Mountain Province activities and operations, variations in ore grade or recovery rates, changes in market conditions, changes in project parameters, mine sequencing; production rate; cash flow; risks associated with the availability and timeliness of permits and government approvals; supply and demand for diamonds; fluctuating raw material prices and exchange rates, the possibility of project cost overruns or unforeseen costs and expenses, labor disputes and other risks of the mining industry, plant failure, equipment or processes to operate as intended.

These factors are discussed in more detail in Mountain Province’s most recent Annual Information Form and in the most recent MD&A filed on SEDAR, which also provide additional general assumptions in connection with these statements. Mountain Province cautions that the foregoing list of important factors is not exhaustive. Investors and others who rely on forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. Mountain Province believes that the expectations reflected in these forward-looking statements are reasonable, but no assurance can be given that such expectations will prove to be correct and the forward-looking statements included in this press release should not be improperly relied upon. These statements speak only as of the date of this press release.

Although Mountain Province has attempted to identify material factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or or results are not foreseen, estimated or foreseen. . There can be no assurance that forward-looking statements will prove to be correct, as actual results and future events could differ materially from those anticipated in such statements. Mountain Province assumes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions change, except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements. Statements regarding estimates of mineral reserves and resources may also be considered forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered as the property is developed. Mineral resources are not mineral reserves and do not have demonstrated economic viability.

In addition, Mountain Province may make changes to its business plans that could affect its results. The principal assets of Mountain Province are administered through a joint venture of which Mountain Province is not the operator. Mountain Province is exposed to actions taken or omissions made by the operator under its prerogative and / or decisions taken by the joint venture under its terms. Such actions or omissions may have an impact on the future performance of Mountain Province. Under its current and revolving credit facilities, Mountain Province is subject to certain limits on its ability to pay dividends on the Common Shares. The declaration of dividends is at the discretion of the Board of Directors of Mountain Province, subject to the limits of the Company’s credit facilities, and will depend on financial results, cash flow requirements, future prospects and other factors. deemed relevant by the Mountain Province Board of Directors.


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