TORONTO, March 5, 2018 /CNW/ - Mountain Province Diamonds
Inc. (TSX and NASDAQ: MPVD) ("Mountain
Province") and Kennady Diamonds Inc. (TSX-V: KDI)
("Kennady") are pleased to announce that today Kennady
obtained an interim order from the Ontario Superior Court of
Justice (Commercial List) ("Interim Order") in respect of
the acquisition by Mountain
Province of Kennady by way of plan of arrangement under the
Business Corporations Act (Ontario) (the "Arrangement").
Special Meetings of Shareholders of Mountain Province and Kennady Diamonds
The Interim Order authorizes, among other things, Kennady to
call and hold a special shareholders meeting (the "Kennady
Special Meeting") to approve the Arrangement. In accordance
with the Interim Order, the Kennady Special Meeting is scheduled to
be held at 1:00 p.m. (Pacific Standard Time) on
Monday, April 9, 2018 at the
Terminal City Club, 837 West Hastings Street, Vancouver, British Columbia, Canada V6C 1B4.
Mountain Province has also
scheduled a special shareholders meeting (the "Mountain Province
Meeting") to be held at 2:30 p.m. (Pacific Standard
Time) on Monday, April 9, 2018
at the Terminal City Club, 837 West Hastings Street, Vancouver, British Columbia, Canada V6C 1B4 to
approve an ordinary resolution to approve the issuance of
Mountain Province shares to be
issued to Kennady shareholders, pursuant to the
Arrangement.
The Arrangement Agreement
Under the terms of the Arrangement, holders of Kennady Shares
("Kennady Shareholders") will be entitled to receive 0.975
common shares of Mountain Province ("Mountain Province
Shares") in exchange for each common share of Kennady
("Kennady Shares") held (the "Exchange Ratio"),
representing an implied offer price of $3.46 per Kennady
Share. This Exchange Ratio represents a premium of 26% to
Kennady's closing price and a premium of 15% based on the 20-day
volume- weighted-average-price of Mountain Province Shares on the
TSX and Kennady Shares on the TSX-V, both as of close on
January 26, 2018 (being the last
trading day prior to the announcement of the Arrangement).
Shareholders of Mountain
Province and Kennady as of the record date of March 5, 2018, respectively, will receive notice
of, and be entitled to vote at, their respective special meetings.
A joint management information circular will be mailed to
shareholders of Mountain Province
and Kennady as of March 5, 2018 and
will provide updated information about the companies and provide
information about the Arrangement.
Reasons and Benefits of the Arrangement
Benefits to Mountain Province Shareholders
- Adds Kennady's 100% owned diamondiferous bodies, which contain
indicated resources of 13.62 million carats and inferred resources
of 5.02 million carats
-
- Kelvin kimberlite – indicated resources of 13.62 million carats
at an average grade of 1.60 carats per tonne and average value of
US$63 per carat as estimated by bulk
samples completed in 2015 and 201
- Faraday kimberlites – inferred resources of 5.02 million carats
at an average grade of 1.54 carats per tonne and average value of
US$98 per carat as estimated by a
2017 bulk sampl
- Size and grade of Kelvin and Faraday add to total number of
carats owned by Mountain Province
for future productio
- Addition of these two bodies opens up new mine planning
opportunities that could deliver optimized revenue realization and
operating cost control
- Upside to grow resources at both Kelvin and Faraday and develop
potential resources at the Doyle and MZ kimberlites
- Adds 67,164 hectares of highly prospective and 100%-owned
exploration ground strategically surrounding the Gahcho Kué
mine
- Benefit of complementary assets held by Mountain Province and Kennady
-
- Kennady controls the bulk of the prospective kimberlite belt
and Mountain Province owns 49% of
the belt's operating mine, creating opportunities to add Kennady
assets to Gahcho Kué joint venture (subject to agreement with
Mountain Province's joint venture
partner, De Beers) or advance exploration, building 100%-owned
value that can be combined with Gahcho Kué joint venture at a later
date
- Potential to significantly reduce pre-production capital
expenditures, transportation costs and operating expenses on a
combined basis
- Timing is right
-
- Lead time to develop and permit Kennady assets – potential to
partially displacing lower-grade Tuzo ore scheduled to be mined
from 2023-2025 with higher-grade ore from Kelvin or Faraday should
Kennady assets be integrated into Gahcho Kué joint venture
- Will fully control Kennady's 2018 drill program – 2017 summer
drilling program highlighted key opportunities to grow the current
Faraday resource and 2018 plan is in place to explore other key
value enhancing targets
Benefits to Kennady Shareholders
- All-share deal allows Kennady's current shareholders to retain
ongoing exposure to Kennady's assets as well as gain exposure to
Mountain Province's 49% interest
in the operating Gahcho Kué mine
- Gain access to Mountain
Province's exploration and development expertise and
financial strength to enhance the advancement of Kennady's North
Project, generating enhanced exploration upside for the combined
assets
- Immediate premium on the Kennady Shares
- Enhanced liquidity and improved capital markets profile
- Access to Mountain Province's
expertise – potential to mitigate risks relating to any future
commercialization of Kennady's mineral properties, including risk
of Kennady becoming a stranded asset
Board Recommendations
The joint management information circular will include the
unanimous recommendations of both Mountain Province and Kennady's Board of
Directors for each party's shareholders to vote FOR the
Arrangement. The joint management information circular will be
available on SEDAR under Mountain
Province and Kennady's issuer profiles at www.sedar.com.
The hearing date for the application for the Final Order of the
Court is scheduled for April 11,
2018. The Arrangement is anticipated to become effective on
or about April 13, 2018, subject to
obtaining the required approvals from the shareholders of both
Mountain Province and Kennady, the
final order from the Ontario Superior Court of Justice (Commercial
List) and the satisfaction or waiver of all other closing
conditions.
Shareholder Questions
For shareholder inquiries regarding the Arrangement, please
contact Laurel Hill Advisory Group:
Laurel Hill Advisory Group
North America Toll Free: 1-877-452-7184
Collect Calls Outside North America: 1-416-304-0211
Email: assistance@laurelhill.com
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. Gahcho Kué is the world's largest new diamond
mine, consisting of a cluster of four diamondiferous kimberlites,
three of which are being developed and mined under the initial 12
year mine plan.
About Kennady Diamonds Inc.
Kennady Diamonds Inc. owns 100% of the Kennady North diamond
project located in Canada's
Northwest Territories. Kennady
North is adjacent to the Gahcho Kué diamond mine. Kennady is
focused on expanding its high-grade diamond resources along the
Kelvin-Faraday kimberlite corridor, as well as identifying new
kimberlites outside of the corridor. To date an indicated resource
of 13.62 million carats of diamonds contained in 8.50 million
tonnes of kimberlite, with a grade of 1.60 carats per tonne and an
average value of US$63 per carat, has
been defined for the Kelvin kimberlite and an inferred resource of
5.02 million carats contained in 3.27 million tonnes of kimberlite,
with a grade of 1.54 carats per tonne and an average value of
US$98 per carat, has been defined for
the Faraday kimberlites using a 1mm bottom cutoff size. The
Kelvin–Faraday corridor is also a target for further
exploration.
Scientific and Technical Information and Qualified
Persons
The disclosure in this news release of scientific and technical
information regarding Kennady's mineral properties has been
reviewed and approved by Dr. Tom
McCandless, P. Geo., a director of Kennady Diamonds and a
"qualified person" under National Instrument 43-101 – Standards
of Disclosure for Mineral Projects.
Disclaimers and 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. and
Kennady Diamonds Inc. (collectively, the "Corporations").
Forward-looking statements and forward-looking information include,
but are not limited to, statements with respect to the anticipated
benefits of the Arrangement to Mountain
Province and Mountain Province Shareholders; the anticipated
benefits of the Arrangement to Kennady and Kennady Shareholders;
the Exchange Ratio and value of the Mountain Province Shares being
delivered as arrangement consideration; the timing and receipt of
the required shareholder, court, stock exchange and regulatory
approvals for the Arrangement; the timing and ability of the
Corporations to satisfy the conditions precedent to completing the
Arrangement; the anticipated timing for mailing the joint
management information circular to the Kennady Shareholders and
Mountain Province Shareholders in respect of the matters to be
considered by such shareholders at the Kennady Meeting and Mountain
Province Meeting, as the case may be, in respect of the
Arrangement; the closing of the Arrangement; the timing and receipt
of the required stock exchange and regulatory approvals for the
Arrangement the length of the current market cycle and requirements
for an issuer to survive in the current market cycle; future growth
potential of the Corporations and their respective business; future
mine development plans; estimated production and mine life of the
Corporations' projects; 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; strategic plans; future operations; future
work programs and objectives; and currency exchange rate
fluctuations. Except for statements of historical fact relating to
the Corporations, 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, including,
without limitation, that all conditions precedent to the
transaction will be met and the realization of the anticipated
benefits derived therefrom for shareholders of the Corporations and
the view on (i) the quality and the potential of the Corporations'
assets, (ii) the consideration offered to Kennady's shareholders,
and (iii) the potential of the combined entity. Forward-looking
statements are based on the opinions and estimates of management of
each of the Corporations 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 the
Corporations, there is no assurance they will prove to be correct
and are not guarantees of future performance and actual results may
differ materially from those in the forward-looking
statements.
These forward-looking statements are based on reasonable
assumptions and estimates of management of Mountain Province and Kennady, as the case may
be, at the time such statements were made. Actual future results
may differ materially as forward-looking statements involve known
and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of Mountain Province or Kennady, as the case may
be, to materially differ from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Such factors, among other things, include: satisfaction
or waiver of all applicable conditions to closing of the
Arrangement (including receipt of all necessary shareholder, court,
stock exchange and regulatory approvals or consents and the absence
of material changes with respect to the parties and their
respective businesses, all as more particularly set forth in the
arrangement agreement between Mountain
Province and Kennady dated January
28, 2018); the synergies expected from the Arrangement not
being realized; business integration risks; fluctuations in general
macroeconomic conditions; fluctuations in securities markets and
the market price of Mountain Province Shares and Kennady Shares;
change in national and local government, legislation, taxation,
controls, regulations and political or economic developments;
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; and failure of plant, equipment or
processes to operate as anticipated.
Although the Corporations have 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.
The Corporations undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise 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. Further, the Corporations may make changes
to their respective business plans that could affect 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
and the combined company. 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 its debt facilities, and will depend on Mountain Province's financial results, cash
requirements, future prospects, and other factors deemed relevant
by its board.
Readers should not place undue reliance on the
forward‐looking statements and information contained
in this news release. Except as required by law, Kennady and
Mountain Province assume no
obligation to update the forward‐looking statements
of beliefs, opinions, projections, or other factors, should they
change, except as required by law.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release.
No stock exchange, securities commission or other regulatory
authority has approved or disapproved of the information contained
herein. This news release is not an offer to sell or the
solicitation of an offer to buy any securities in any jurisdiction,
nor shall there be any sale of securities in any jurisdiction in
which such offer, solicitation or sale would be unlawful.
SOURCE Mountain Province Diamonds Inc.