OTHER

Mountain Province up on diamond deal

Mountain Province Diamonds' share price has surged more than 20% after it announced a proposed US$50 million sales deal with Dunebridge Worldwide for rough diamonds from the half-owned Gahcho Kue mine in Canada's Northwest Territories.

Mountain Province Diamonds could sell rough diamonds worth about US$50 million to a company controlled by its major shareholder

Mountain Province Diamonds could sell rough diamonds worth about US$50 million to a company controlled by its major shareholder

Dunebridge is controlled by Dermot Desmond, who also owns about 32% of Mountain Province. Mountain Province has 49% of Gahcho Kue in a joint venture with De Beers Canada.

Diamond producers are being forced to find alternative sales routes for stores of rough stones as the world's traditional markets remain disrupted by COVID-19 restrictions.

Mountain Province expects the sale of the first tranche - $22 million worth of diamonds from Gahcho Kue inventories - to close this week, providing much-needed liquidity.

The company said the transaction covered run-of-mine stones below 10.8 carats. It would retain about 50% of the value when the gems were sold to third parties.

A board committee unanimously approved the sales deal after considering alternatives, and financing options. The company completed two diamond sales this year before having to cancel a third.

BMO Capital Markets analyst Edward Sterck said the company's balance sheet was "manageable" short term, with about $16 million in interest payments to come in the June and September quarters.

At the end of the March quarter, Mountain Province had $32 million cash. During April, it drew down $25 million from a revolving credit facility.

Shares in the company traded at C38c on Monday, capitalising it at $80 million (US$60 million).

 

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

editions

Mining Journal Intelligence Investor Sentiment Report 2024

Survey revealing the plans, priorities, and preferences of 120+ mining investors and their expectations for the sector in 2024.

editions

Mining Journal Intelligence Mining Equities Report 2023

Access an exclusive, inside look on the quarterly mining IPOs and secondary raisings data and mining equities performance tables with an annual Stock Exchange Comparisons supplement.

editions

Mining Journal Intelligence World Risk Report 2023 (feat. MineHutte ratings)

A detailed analysis of mining investment risks across 121 jurisdictions globally, built on 11 ‘hard risk’ metrics and an industrywide survey.

editions

Mining Journal Intelligence Global Leadership Report 2023: Social licence

Gain insights into social licence trends and best practices from interviews with 20+ top mining company executives and an industrywide survey.