TSX and OTCQX: MPVD
TORONTO and NEW YORK, March 1,
2022 /PRNewswire/ -- Mountain Province Diamonds Inc.
("Mountain Province" or the
"Company") (TSX: MPVD) and (OTCQX: MPVD) is pleased to
announce that at its special meeting of shareholders held on
February 28, 2022 (the "Special
Meeting") 87% of the votes held by disinterested shareholders were
cast in favour the previously announced debt financing transaction
that significantly strengthens the Company's financial position
ahead of a broader refinancing of the Company's indebtedness later
in 2022. The Company is also pleased to announce that a new,
discovery-focused, 6,000 metre drill and geophysics program has
been initiated on the Company's 100% owned Kennady North
Project.
At the Special Meeting, the Company's disinterested shareholders
approved: (i) the entry into a US$50
million junior secured term loan credit facility (the "Loan
Agreement") with an entity (the "Lender") ultimately beneficially
owned by Mr. Dermot Desmond, and
(ii) the issuance to the Lender or another entity ultimately
beneficially owned by Mr. Desmond of warrants (the "Warrants" and
together with the Loan Agreement, the "Transactions") to purchase
up to 41,000,000 common shares of the Company for an aggregate
exercise price of approximately US$25,000,000. The Loan Agreement will bear
interest at a rate of 8% per annum until December 15, 2022, after which the interest rate
will be 2% per annum greater than the interest rate on the debt
that replaces or refinances the Company's existing second lien
notes. The Warrants will be exercisable in whole or in part at any
time up to the December 15, 2027, the
Maturity Date of the Loan Agreement, by paying US$0.60975 per common share. The Warrants will be
subject to customary anti-dilution adjustments.
Full results of the motion put before shareholders can be seen
in the table below (excluding any votes cast by "interested
parties" as defined in Multilateral Instrument 61-101 Protection
of Minority Shareholders in Special Transactions ("MI
61-101")).
MOTION AND
ISSUANCE OF WARRANTS
|
NUMBER OF
SHARES
|
% OF VOTES
CAST
|
FOR
|
AGAINST
|
WITHHELD/
|
RESTRICTED
|
NON-VOTE
|
FOR
|
AGAINST
|
WITHHELD/
|
ABSTAIN
|
ABSTAIN
|
US$50M Loan
Agreement
|
42,853,146
|
6,414,672
|
0
|
70,115,071
|
0
|
86.98%
|
13.02%
|
0.00%
|
The Company expects to complete the Transactions on or before
March 31, 2022.
In addition to the results of the Special Meeting, the Company
is pleased to announce the initiation of a 6,000 metre,
discovery-focused drill program taking place at the Kennady North
Project during the winter 2022 drill season. A second drill
has been transported on the ice road and one drill at site is set
to commence drilling imminently. This program represents the first
time in several years that drilling is 100% focused on new
discoveries, rather than delineation of the currently identified
Kelvin and Faraday kimberlites.
The Company is also pleased to announce that a second Minerals
Incentive Program (MIP) award was received from the Government of
Northwest Territories to help
offset the costs of drilling of high priority targets near the
Faraday kimberlites.
Mark Wall, the Company's
President and Chief Executive Officer, commented:
"On the back of an improving rough diamond market, the
shareholder's approval of this US$50M
Loan Agreement represents a very positive step forward as we move
towards the refinancing of our bonds coming due at the end of this
year. With this loan in place, along with the promising rough
diamond market and our exciting 6,000 metre, discovery-focused
drill and geophysics program, we are on track to unlock shareholder
value throughout 2022 and beyond."
A special committee of independent directors of Mountain Province, all of whom are independent
of management and Mr. Desmond (the "Special Committee"), undertook
a deliberate and full consideration of the Transaction and
alternative financing options available to Mountain Province. The Special Committee
concluded that the Transaction is reasonable and represents the
best option for Mountain Province,
having regard to the best interests of Mountain Province and its stakeholders. The
Special Committee unanimously recommended the Transaction to the
board of directors of the Company (the "Board"). The Board
received the recommendations and findings of the Special Committee
and, Mr. Jonathan Comerford and Mr.
Brett Desmond having declared
conflicts of interest and not attending any part of any meeting
where the Transaction was discussed and not voting on the
Transaction, unanimously approved the Transaction.
Mr. Dermot Desmond is an insider
and a related party of Mountain
Province. The Transactions therefore each constitute a
"related party transaction" within the meaning of MI 61-101.
The Loan Agreement constitutes the borrowing of money from, or
the entering into of, a credit facility with a related party.
Accordingly, pursuant to Section 5.4(1) of MI 61-101, a formal
valuation in respect of the Loan Agreement was not required.
In respect of the Warrants, Section 6.3(1) of MI 61-101 provides
the subject matter of a formal valuation are the non-cash assets
involved in a related party transaction. Pursuant to Section 6.3(2)
of MI 61-101, because the non-cash assets, being the Warrants, are
securities of a reporting issuer, a formal valuation in respect of
the Warrants was not required.
About Mountain Province Diamonds Inc.
Mountain Province Diamonds is a 49% participant with De
Beers Canada in the Gahcho Kué diamond mine located in Canada's Northwest
Territories. The Gahcho Kué Joint Venture property consists
of several kimberlites that are actively being mined, developed,
and explored for future development. The Company also controls
107,373 hectares of highly prospective mineral claims and leases
surrounding the Gahcho Kué Mine that include an Indicated mineral
resource for the Kelvin kimberlite and Inferred mineral resources
for the Faraday kimberlites. Kelvin is estimated to contain 13.62
million carats (Mct) in 8.50 million tonnes (Mt) at a grade of 1.60
carats/tonne and value of US$63/carat. Faraday 2 is estimated to contain
5.45Mct in 2.07Mt at a grade of 2.63 carats/tonne and value of
US$140/ct. Faraday 1-3 is estimated
to contain 1.90Mct in 1.87Mt at a grade of 1.04 carats/tonne and
value of US$75/carat. All resource
estimations are based on a 1mm diamond size bottom cut-off.
For further information on Mountain Province Diamonds and to
receive news releases by email, visit the Company's website at
www.mountainprovince.com.
Qualified Person
The disclosure in this news release of scientific and technical
information regarding Mountain
Province's mineral 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 Inc. and Qualified
Persons as defined by National Instrument 43-101 Standards of
Disclosure for Mineral Projects.
Caution Regarding Forward Looking Information
This news release contains certain "forward-looking
statements" and "forward-looking information" under applicable
Canadian and United States
securities laws concerning the business, operations and financial
performance and condition of Mountain Province Diamonds Inc.
Forward-looking statements and forward-looking information include,
but are not limited to, statements with respect to the ability to
negotiate and enter into binding documentation for the
Transactions, the ability to obtain necessary approvals for the
Transactions, operational hazards, including possible disruption
due to pandemic such as COVID-19, its impact on travel,
self-isolation protocols and business and operations, estimated
production and mine life of the project of Mountain Province; the realization of mineral
reserve estimates; the timing and amount of estimated future
production; costs of production; the future price of diamonds; the
estimation of mineral reserves and resources; the ability to manage
debt; capital expenditures; the ability to obtain permits for
operations; liquidity; tax rates; and currency exchange rate
fluctuations. Except for statements of historical fact
relating to Mountain Province,
certain information contained herein constitutes forward-looking
statements. Forward-looking statements are frequently characterized
by words such as "anticipates," "may," "can," "plans," "believes,"
"estimates," "expects," "projects," "targets," "intends," "likely,"
"will," "should," "to be", "potential" and other similar words, or
statements that certain events or conditions "may", "should" or
"will" occur. Forward-looking statements are based on the
opinions and estimates of management at the date the statements are
made, and are based on a number of assumptions and subject to a
variety of risks and uncertainties and other factors that could
cause actual events or results to differ materially from those
projected in the forward-looking statements. Many of these
assumptions are based on factors and events that are not within the
control of Mountain Province and
there is no assurance they will prove to be correct.
Factors that could cause actual results to vary materially
from results anticipated by such forward-looking statements include
the negotiating stances taking by the parties with respect to the
Transactions, the ability to obtain approval of regulators, parties
and shareholders, as may be required, on conditions acceptable to
the parties, the development of operation hazards which could arise
in relation to COVID-19, including, but not limited to protocols
which may be adopted to reduce the spread of COVID-19 and any
impact of such protocols on Mountain
Province's business and operations, variations in ore grade
or recovery rates, changes in market conditions, changes in project
parameters, mine sequencing; production rates; cash flow; risks
relating to the availability and timeliness of permitting and
governmental approvals; supply of, and demand for, diamonds;
fluctuating commodity prices and currency exchange rates, the
possibility of project cost overruns or unanticipated costs and
expenses, labour disputes and other risks of the mining industry,
failure of plant, equipment or processes to operate as
anticipated.
These factors are discussed in greater 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 base themselves
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 those forward-looking
statements are reasonable, but no assurance can be given that these
expectations will prove to be correct and such forward-looking
statements included in this news release should not be unduly
relied upon. These statements speak only as of the date of this
news release.
Although Mountain Province
has attempted to identify important 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 actions, events or results not to be anticipated,
estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Mountain
Province undertakes no obligation to update forward-looking
statements if circumstances or management's estimates or opinions
should change except as required by applicable securities laws. The
reader is cautioned not to place undue reliance on forward-looking
statements. Statements concerning mineral reserve and resource
estimates may also be deemed to constitute forward-looking
statements to the extent 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.
Further, Mountain Province
may make changes to its business plans that could affect its
results. The principal assets of Mountain
Province are administered pursuant to a joint venture under
which Mountain Province is not the
operator. Mountain Province is
exposed to actions taken or omissions made by the operator within
its prerogative and/or determinations made by the joint venture
under its terms. Such actions or omissions may impact the future
performance of Mountain Province.
Under its current note and revolving credit facilities Mountain Province is subject to certain
limitations on its ability to pay dividends on common stock. The
declaration of dividends is at the discretion of Mountain Province's Board of Directors,
subject to the limitations under the Company's debt facilities, and
will depend on Mountain Province's
financial results, cash requirements, future prospects, and other
factors deemed relevant by the Board.
Mark Wall, President and CEO, 161
Bay Street, Suite 1410, Toronto,
Ontario M5J 2S1, Phone: (416) 361-3562, E-mail:
info@mountainprovince.com; Matthew
MacPhail, Chief Technical Officer, 161 Bay Street, Suite
1410, Toronto, Ontario M5J
2S1, Phone: (416) 361-3562, E-mail: info@mountainprovince.com