Mountain Province Gets Approval for Investor Bailout

RAPAPORT... Mountain Province shareholders have approved a refinancing deal that will allow one of its major investors to buy out its current credit facility.Dunebridge Worldwide, which is controlled by Dermot Desmond, who owns just over 32% of Mountain Province's stock, will take ownership of the $25 million secured loan held by the miner's existing lenders, Mountain Province said Wednesday. Dunebridge will also amend the loan to include a lower, fixed interest rate, remove certain financial covenants, and extend the life of the facility.Mountain Province's shareholders also approved an increase to the sales agreement with Dunebridge for rough diamonds from its Gahcho Ku?(C) mine in Canada at the September 29 meeting. Dunebridge will now purchase up to $100 million of the miner's run-of-mine goods, as opposed to the $50 million it had previously agreed on in June. The transaction allows Mountain Province to receive a share of the profit should Dunebridge resell the diamonds at a higher price in the future. The board "unanimously found that the company is in serious financial difficulty," Mountain Province said. It also noted that approval of these transactions "will significantly strengthen the company's financial position as it responds to the challenges posed by the Covid-19 pandemic."Mountain Province owns 49% of Gahcho Ku?(C), with De Beers holding the remainder.Image: The Gahcho Ku?(C) mine. (Mountain Province)