TSX and OTC: MPVD
TORONTO and NEW
YORK, Dec. 12, 2022 /PRNewswire/ - Mountain
Province Diamonds Inc. ("Mountain Province" or the "Company") (TSX:
MPVD) (OTC: MPVD) is pleased to announce that at its special
meeting of shareholders held on December 12,
2022 (the "Special Meeting") 99.3% of the votes held by
disinterested shareholders were cast in favour the previously
announced refinancing transaction involving the issuance of
approximately US$195.0 million
aggregate principal amount of new senior secured second lien loan
notes (the "New Loan Notes") to
refinance US$189,150,000 of the
Company's existing 8.000% Senior Secured Second Lien Notes due 2022
(the "Existing Notes").
At the Special Meeting, the Company's disinterested shareholders
approved the issuance of the New Loan Notes in an aggregate
principal amount of $195,000,000,
including to certain entities ultimately beneficially owned by Mr.
Dermot Desmond (the "Related
Investor"), which would be used to refinance $189,150,000 of the Existing Notes (the
"Transaction") with the remaining portion of the Existing Notes
being repaid with cash on hand.
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 Security holders in Special
Transactions ("MI 61-101")).
MOTION
|
NUMBER OF
SHARES
|
% OF VOTES
CAST
|
FOR
|
AGAINST
|
WITHHELD/
ABSTAIN
|
RESTRICTED
|
NON-
VOTE
|
FOR
|
AGAINST
|
WITHHELD
/ ABSTAIN
|
Entry into
refinancing
transaction
|
32,761,233
|
212,750
|
0
|
75,402,269
|
0
|
99.35 %
|
0.65 %
|
0.00 %
|
The Company expects to complete the Transaction on December 14, 2022.
Mark Wall, the Company's
President and Chief Executive Officer, commented:
"This refinancing package is a very positive result for the
Company and for shareholders. To refinance in today's market
with a solution that involves no share dilution of existing
shareholders, and with a 9% coupon for US$195 million in debt addresses the refinancing
requirement cloud that has faced the Company for the last
year. Achieving an Original Issue Discount (OID) of 97%,
against the previous notes 97.992% OID is also a very good result
for the Company. The diamond market is relatively strong which
places the Company in a position to be able to further reduce debt
during 2023 while also pursuing exciting growth opportunities in
the Hearne discovery and Kennady
North project. As a Company, Mountain Province has approximately
$292 million in sales in the first
nine months of 2022, with an adjusted EBITDA of approximately
$154 million in that nine months,
against a current market capitalization of some $105 million. Now that the refinancing
cloud has been lifted the company can work to have the value of the
business reflected in the Company's share price."
A special committee of independent directors of Mountain Province, (the "Special Committee"),
after giving due consideration to the best interests of the
Company, current market conditions and the impact of entering into
the Transaction on shareholders and the Company's other
stakeholders, unanimously concluded that the Transaction is in the
best interests of the Company and that the terms of the Transaction
are reasonable in the circumstances. 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.
The Related Investor is an insider and a related party of
Mountain Province. The Transaction
therefore constitutes a "related party transaction" within the
meaning of MI 61-101.
The Company is relying on
the exemption from the MI
61-101 formal valuation requirements
provided under section 5.5(c) of
MI 61-101 as the Transaction is
a distribution of securities of
the Company to a related party
for cash consideration and (i)
neither the Company nor, to the knowledge of the Company after
reasonable inquiry, the Related Investor has
knowledge of any material information
concerning the Company or its
securities that has not been generally disclosed, and (ii)
completion of the Transaction will have no effect on the direct or
indirect voting interest of the Related Investor.
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 consists of
several kimberlites that are actively being mined, developed, and
explored for future development. The Company also controls over
113,000 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.
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 Transaction,
the ability to obtain necessary approvals for the Transaction, the
ability to complete the Transaction on the expected timeline or at
all, 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
Transaction, 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.
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SOURCE Mountain Province Diamonds Inc.