Image credit: Mountain Province
Mountain Province Diamonds Inc. announced that it proposes to enter into an agreement to sell U.S.$50,000,000 of diamonds to Dunebridge Worldwide Ltd.
The first sale for approximately U.S.$ 22,000,000 is expected to occur on June 11th, 2020 following the execution of a binding agreement.
The transaction with Dunebridge will permit the company to sell its run of mine diamonds (below 10.8 carats) at the prevailing market price at the time of each sale. The transaction will also allow the company to participate, after fees and expenses in a portion of any increase in the value of the diamonds realized by Dunebridge upon its future sale of the diamonds to a third party.
Once all fees and expenses have been deducted any surplus will be shared equally between Dunebridge and the Company.
The traditional markets for rough diamonds have been closed since mid March 2020 due to the impacts of COVID-19. In the interim, and as previously announced, the company had been seeking alternative sales channels and sources of financing to ensure sufficient funding for operational and corporate expenses as the mine continues to be operational.
This transaction is expected to provide the liquidity required in the short term whilst the company awaits the gradual re-opening of the global economy and traditional selling methods.
The terms of the sale were unanimously approved by the Independent members of Mountain Province's board of directors.
Proceeds of the sale will be used for operations and corporate expenses, including the funding of bond interest, all in the ordinary course as having been budgeted by the Company prior to COVID-19.
Alex Shishlo, Editor of the Rough&Polished European Bureau
