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Mountain Province to Up Investor Sales Agreement

Aug 19, 2020 8:22 AM   By Rapaport News
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Mountain Province plans to sell an additional $50 million worth of rough diamonds from its Gahcho Kué mine to Dunebridge Worldwide to help generate liquidity and bolster the company.

The sale “will significantly strengthen the company's financial position as it responds to the challenges posed by the Covid-19 pandemic,” Mountain Province said Tuesday, describing it as being in “serious financial difficulty.”

Dunebridge, which is controlled by Dermot Desmond, who owns just over 32% of Mountain Province stock, previously purchased $50 million of the miner’s run-of-mine goods in June. The transaction allows Mountain Province to profit should Dunebridge resell the diamonds at a higher price in the future.

The sale is subject to approval by Mountain Province’s shareholders, as well as the Toronto Stock Exchange, the miner noted. It will hold a special shareholder meeting on September 29.

“The impact of the Covid-19 pandemic on the diamond industry and in turn the company has been profound,” said Mountain Province CEO Stuart Brown. “This [agreement] will be a substantial positive step in stabilizing the company and brings more certainty to its future. In particular, the $50 million increase of the sales agreement allows the company the flexibility to sell its diamonds under the agreement or through the traditional sales channels as they begin to open after the summer holidays.”

Mountain Province owns 49% of Gahcho Kué, with De Beers holding the remainder.

Image: A large-haul truck at the Gahcho Kué mine. (Mountain Province)
Tags: COVID-19, De Beers, Dermot Desmond, Dunebridge Worldwide, Gahcho Kué mine, mountain province, Rapaport News, stuart brown
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