31 May 2017
Toronto and New York, May 31, 2017 – Mountain Province Diamonds Inc. (“Mountain Province”, the “Company”) (TSX: MPVD, NASDAQ: MPVD) is pleased to announce the recovery during April 2017 of an 84.65 carat and 53.90 carat gem quality diamond from the Gahcho Kue diamond mine. The joint venture partners bid for the production of fancy coloured and special (+10.8 carat) diamonds on almost a monthly basis. The bid for April 2017 production of fancies and specials was won by Mountain Province and included the two exceptional diamonds mentioned above. The fancies and specials are now owned by Mountain Province and will be included in the Company’s upcoming sales through its broker in Antwerp, Belgium.
Mountain Province President and CEO Patrick Evans commented: “The 84.65 carat diamond is the largest gem quality diamond recovered to date and provides further confirmation that Gahcho Kué hosts a population of large, high quality gem diamonds. The 53.90 carat diamond is the highest quality exceptional stone recovered to date and is expected to achieve a record price at tender.”
The Company is also pleased to announce the receipt today of a unanimous waiver from all seven participants in its loan facility of the requirement to fund the cash call reserve account until August 31, 2017. Under the terms of the loan facility, the Company was subject to maintaining a cash call reserve account balance of approximately US$27.9 million as at March 31, 2017 and had previously received a waiver from the lenders until May 31, 2017.
During the extension period to August 31, 2017, the Company expects to provide the lenders an updated Life of Mine plan for Gahcho Kué from the operator, De Beers Canada, along with an updated financial model, further diamond pricing analysis and a fluorescence evaluation to be prepared by an external consultant.
The Company continues to be in active discussions with its lending group to defer and realign the reserve account funding requirements to reflect current market conditions. With the benefit of additional operating and sales results, and subject to continued improvements on both fronts, the Company expects to conclude the realignment of the reserve account funding schedule by the extended waiver date, or request an additional waiver if required. Subject to agreement between the Company and lenders, the $65M in restricted funds in treasury could be used to support reserve account funding. While good progress is being made, there are no assurances that the lenders will accommodate further waivers or amendments the Company may seek.
Mountain Province also announced that the Gahcho Kué Joint Venture has approved a US$19M budget for winterization of the conveyor systems and installation of expanded dust mitigation systems at Gahcho Kué. Installation of the new systems is scheduled to commence in the second half of 2017 with completion expected in Q1 2018. These new systems are expected to reduce unscheduled extreme cold weather downtime and also increase equipment and operational efficiencies.