TSX and OTCQX: MPVD
TORONTO and NEW YORK, March 28, 2022 /PRNewswire/ - Mountain
Province Diamonds Inc. ("Mountain Province" or the "Company") (TSX:
MPVD) (OTCQX: MPVD) provides the details of its Q4 and Full
Year 2021 earnings release and conference call, and announces that
it has closed its previously announced transactions (the
"Transactions"), consisting of: (i) the entry into a new
US$50 million junior secured term
loan credit facility (the "Loan Agreement") with an entity (the
"Lender") ultimately beneficially owned by Dermot Desmond, and (ii) the issuance to the
Lender of warrants (the "Warrants") to purchase up to 41,000,000
common shares of the Company for an aggregate exercise price of
approximately US$25,000,000. The
Warrants are exercisable in whole or in part at any time up to the
Maturity Date (as defined below) at an exercise price of
US$0.60975 per common share. The
Warrants, and any common shares issuable upon exercise thereof, are
subject to a statutory four-month hold period under Canadian
securities laws that will expire on July 29,
2022.
Closing of Junior Credit Facility
The Loan Agreement matures on December
15, 2027 (the "Maturity Date") and is secured by
substantially all of the properties and assets of the Company and
its subsidiaries on a junior basis to the Company's existing second
lien notes. The Loan Agreement bears 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, payable on a semi-annual basis. The
Company is entitled to prepay the Loan Agreement at any time prior
to the Maturity Date without penalty.
The Company issued the Warrants, as described above, as partial
consideration for the extension of credit under the Loan Agreement.
The exercise price and number of common shares underlying the
Warrants are each subject to customary anti-dilution
adjustments.
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 Multilateral
Instrument 61-101 Protection of Minority Shareholders in Special
Transactions ("MI 61-101").
In accordance with MI 61-101 and the rules of the Toronto Stock
Exchange (the "TSX"), the disinterest shareholders of the Company
approved the Transactions at a special meeting of shareholders held
on February 28, 2022.
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 is also not required.
On November 9, 2021, the board of
directors of the Company established a special committee of
independent directors (the "Special Committee") in connection with
the consideration and oversight of options to improve the Company's
capital structure and its short and long-term liquidity, including
by way of a restructuring or refinancing of its outstanding
indebtedness.
The review, direction and supervision of the Transactions fell
within the mandate of the Special Committee. Each member of the
Special Committee was independent of the Company's management and
the Lender and unrelated to the Transactions. The Special Committee
was advised by independent legal counsel and an independent
financial advisor, Eight Capital, in connection with the
Transactions.
The Special Committee reviewed and considered the Transactions
and, giving due consideration to the best interests of the Company
and the impact on shareholders and the Company's other
stakeholders, unanimously concluded that the Transactions were in
the best interests of the Company and that the terms of the
Transactions are reasonable in the circumstances of the
Company.
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 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 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.
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SOURCE Mountain Province Diamonds Inc.