Mountain Province Investor to Buy $50M in Rough

RAPAPORT... Mountain Province plans to sell $50 million worth of rough diamonds to an entity owned by one of its major shareholders, generating liquidity amid weak prices.The first sale of $22 million in diamonds to Dunebridge Worldwide will take place on June 11, Mountain Province said Monday. The deal will enable the miner to sell its run-of-mine goods - under 10.8 carats - at the current market price at the time of each sale, the company explained. It will use the income for its operations and corporate expenses.Dunebridge is controlled by Dermot Desmond, who owns just over 32% of Mountain Province stock. The transaction allows Mountain Province to profit should Dunebridge resell the diamonds at a higher price in the future: Dunebridge will deduct its fees and expenses and split the remaining proceeds between itself and Mountain Province."The traditional markets for rough diamonds have been closed since mid-March 2020 due to the impacts of Covid-19," Mountain Province said. "This transaction is expected to provide the liquidity required in the short term whilst the company awaits the gradual reopening of the global economy and traditional selling methods."The sale is subject to approval by the Toronto Stock Exchange, Mountain Province's lenders, and other regulatory bodies. Mountain Province owns 49% of the Gahcho Ku?(C) diamond mine in Canada, with De Beers controlling the rest.Last month, BlueRock Diamonds, which owns the Kareevlei mine in South Africa, agreed to a financing deal with Delgatto Diamond Finance Fund under which BlueRock would sell its rough to Delgatto at a discount and retain an option to buy the goods back within a year at the same price.Image: The Gahcho Ku?(C) mine. (Mountain Province)