18 August 2020
Mountain Province Diamonds Inc. today announces that it intends to hold a special meeting of shareholders on September 29, 2020. The record date for shareholders entitled to receive notice and vote at the Special Meeting has been set as August 26, 2020.
The Special Meeting is being called to enable the Company's shareholders to approve two related party transactions that will significantly strengthen the Company's financial position as it responds to the challenges posed by the COVID-19 pandemic. An information circular with detailed information about the Special Meeting will be mailed to shareholders.
At the Special Meeting, the Company will seek approval for the assignment from the existing lenders to Dermot Desmond, or a related company, of the Company's indebtedness of US$25,000,000 under its senior secured revolving credit facility.
In connection with the Assignment, certain amendments will be made to the Existing Credit Facility, including, among other things, adjusting the interest rate to a fixed 5% per annum, payable monthly, and removing certain financial maintenance covenants under a one-year term. The effect of the Assignment is that Mr. Desmond will provide a refinancing and extension of the existing US$25,000,000 credit facility.
The Company will also seek approval at the Special Meeting for an increase from US$50,000,000 to US$100,000,000 in the sales capacity under the previously announced diamond sales agreement between the Company, certain of its subsidiaries and Dunebridge Worldwide Ltd. This will allow the Company to continue selling its run of mine diamonds (below 10.8 carats) at the prevailing market price, and potentially share in the future upside should the traditional sales channels for rough diamonds remain closed or subdued.