Mountain Province Diamonds has agreed to transfer its 49% stake in the Gahcho Kué diamond mine in Canada to De Beers as part of a comprehensive restructuring deal, freeing it of associated obligations and liabilities.
The main condition of the transfer is that De Beers will assume the responsibility for the remaining reclamation payments and all other debts owed by Mountain Province. At the same time, the company preserves certain rights that allow it to regain an ownership interest in the mine until December 31, 2029.
"This agreement follows an extensive review of the alternatives available to the Company against the backdrop of a material decline in diamond prices over the past year," said Mountain Province president and CEO Jonathan Comerford.
"It removes all liabilities, provides greater certainty for the employees and communities connected to Gahcho Kué, and preserves rights that allow Mountain Province to participate again in the mine's future."
Dunebridge Worldwide, a major Mountain Province shareholder, has also agreed to provide the company with a six-month period during which interest and capital repayments and the exercise of specified rights will be suspended, to give it more time to find new sources of funding.
"If diamond market conditions continue to improve, that funding could support the future exercise of the company's rights in relation to Gahcho Kué and the continued development of the Kennady diamonds assets," Comerford noted.
Theodor Lisovoy, Managing Editor, Rough&Polished
