24 May 2018production update▲ Good
The fourth sale of 2018 set another record by value, US$28.3 million for 350,000 carats at US$81 a carat, US$79 normalised. 191 companies attended the tender with an average of 12.4 bids a lot.
Announcements, explained
Each one in plain English, with the numbers worked through for a shareholder.
23 May 2018drilling progress report▲ GoodMajor
First exploration season on the Kennady North ground as owner rather than spectator: 38 holes for 6,826 metres across three rigs, finishing delineation of the north-west extension of Faraday 2 that had added over 150 metres to the kimberlite. The drilling is meant to lift the Faraday 2 pipe model to inferred confidence.
7 May 2018business combination● Neutral
The formal business acquisition report for the Kennady deal, confirming shareholders approved it on 9 April, the court on 11 April and closing on 13 April 2018. Most of the substance is incorporated by reference to the March circular.
19 Apr 2018production update● Neutral
The third sale of 2018 brought US$26.4 million for 451,000 carats, US$59 a carat as the small goods held back from the high-priced second sale came through; on a normalised basis it was US$80, the same as the second sale.
13 Apr 2018business combination● NeutralMajor
Completed the Kennady acquisition, six years after spinning the same ground out. Kennady holders took 0.975 Mountain Province shares each, Kennady was delisted and wound down as a reporting issuer, and its directors and officers all resigned, replaced by Mountain Province's David Whittle and Perry Ing. Kennady shareholders' equity was rolled into Mountain Province stock rather than cashed out.
26 Mar 2018resource reserve update● NeutralMajor
Year-end 2017 probable reserves stood at 31.5 million tonnes containing 49.4 million carats at 1.57 carats per tonne, after a year of mining. The grade differs sharply by pipe: 5034 at 1.91 and Hearne at 1.99 carats per tonne against Tuzo, the largest by tonnage at 15.7 million tonnes, at only 1.22.
26 Mar 2018resource reserve update● Neutral
The full JDS technical report on the Gahcho Kué mine, effective 31 December 2017, filed in support of the year-end reserve and resource statement announced the same day.
23 Mar 2018business combination▲ Good
Both ISS and Glass Lewis recommended shareholders of each company vote for the Kennady combination, ISS citing the added wholly-owned diamond resources and scope to cut pre-production capital, transport and operating costs.
19 Mar 2018material agreement▲ GoodMajor
Signed a non-binding memorandum with De Beers to fold the Kennady kimberlites into the Gahcho Kué joint venture if the acquisition completes, which would let them be mined and processed through the existing plant. Nothing is committed: the parties still have to agree resource work and commercial terms in a definitive agreement.
16 Mar 2018business combination● Neutral
Filed the joint circular for the two shareholder meetings on 9 April 2018 that must approve the Kennady acquisition - Mountain Province voting on issuing the shares, Kennady on the arrangement itself.
16 Mar 2018production update▲ GoodMajor
The second sale of 2018 fetched US$142 a carat, by far the highest Mountain Province had achieved at any tender, though on only 177,000 carats for US$25.1 million; on a normalised basis the price was US$76, so the headline reflects an unusually large-stone assortment rather than a market move. The release also confirmed the company's intention to begin paying a dividend.
15 Feb 2018production update▲ Good
The first sale of 2018 was the largest by value to date, US$27.3 million for 351,000 carats at US$78 a carat, or US$83 normalised, against a weak US$53 to US$66 across the final three sales of 2017. The company put the improvement down to a better stone size mix in the last 2017 production split.
8 Feb 2018business combination● Neutral
Filed the signed arrangement agreement of 28 January 2018 behind the Kennady acquisition, together with related exhibits. It sets out the mechanics - shareholder meetings, court orders, non-solicitation and break provisions - rather than new commercial terms.
29 Jan 2018business combination● NeutralMajor
Agreed to buy back Kennady Diamonds - the exploration ground it spun out in 2012 - in an all-share deal at 0.975 Mountain Province shares per Kennady share, about C$3.46 a share and C$176 million of equity, a 26% premium, leaving Mountain Province holders with 76% of the combined company. It brings in the Kelvin kimberlite at 13.62 million carats indicated, 1.60 carats per tonne, valued at US$63 a carat on a 2016 bulk sample, the Faraday cluster at 5.02 million carats inferred, 1.54 carats per tonne and US$98 a carat, and 67,164 hectares surrounding the mine.
18 Jan 2018drilling progress report▲ GoodMajor
All six holes drilled so far in the Southwest Corridor between the 5034 and Hearne pits hit diamond-bearing kimberlite, with true thicknesses of 3.1 to 26.4 metres, in ground the mine plan currently treats as waste rock and which is in no resource statement. Surveys also flagged a new gravity target between the Tesla and Tuzo pipes and a possible south-west extension of Tesla; 11 more holes were still to drill.
11 Dec 2017capital raising announcement▲ GoodMajor
Closed the US$330 million 8.0% second lien notes, repaying and terminating the project loan and clearing the De Beers development-cost balance. Interim CEO David Whittle said this removed the project loan's cash reserve accounts, lender-approval restrictions and, in his words, any further need for bank waivers - the first mention in the record that the company had been seeking waivers under that facility. Patrick Evans, chief executive through the whole build, was no longer in the role.
1 Dec 2017debt financing● NeutralMajor
Priced the notes at US$330 million, US$5 million more than first proposed, with an 8.0% coupon, issued at 97.992 of face and due 15 December 2022. Alongside them the company would sign a US$50 million first lien revolving facility that ranks ahead of the notes, kept as a liquidity cushion rather than drawn.
27 Nov 2017joint venture update● Neutral
Furnished two older joint venture documents alongside that week's note offering: a binding confirmation of intent dated 2 December 2014 and a joint venture assignment and assumption confirmation agreement dated 26 March 2015. Only the exhibit cover sheets were filed in readable form, so the agreements' terms are not in the document.
27 Nov 2017debt financing● NeutralMajor
Launched a US$325 million private offering of second lien notes due 2022, secured on substantially all assets including the 49% joint venture interest, to repay the US$370 million project loan (US$357 million still drawn at 30 September) and about C$48.5 million owed to De Beers for historic development costs. The notes would rank behind a new US$50 million first lien revolving facility to be signed at the same time, and no interest rate had been set.
18 Sept 2017production update● NeutralMajor
The seventh diamond sale was the largest to date by both value and volume, 463,000 carats for US$27.1 million, but at US$59 a carat against US$72 to US$95 in earlier 2017 sales; the fall was because 85,000 carats of small goods were fast-tracked into it and De Beers won most of the large and coloured stones on offer. On a like-for-like basis the company put the price at US$72 a carat, in line with US$75 year to date. The mine was running well above its 1.57 carats per tonne reserve grade, recovering 2.05 carats per tonne from 1.84 million tonnes in 2017 to the end of August for 3.77 million carats on a 100% basis.
3 Mar 2017production update● Neutral
The company's own version of the same 2 March commercial-production announcement, issued a day later and carrying the same content as the joint De Beers release.
2 Mar 2017production update▲ GoodMajor
Gahcho Kué reached commercial production on 2 March 2017, on budget and ahead of schedule, roughly six years after the environmental review began. Three open pits are expected to yield about 54 million carats over the mine's life; De Beers holds 51% and operates, Mountain Province 49%.
6 Feb 2017production update▲ Good
Recovered a 67.87 carat gem-quality octahedron during ramp-up, the largest stone found at Gahcho Kué so far and well above the 25.13 carat octahedron recovered during bulk sampling. The release also disclosed that conveyor winterisation problems had disrupted the ramp-up, though the mine was said to be back on track for commercial production that quarter, and set the second diamond sale for Antwerp on 20 February to 1 March.
5 Aug 2016production update▲ GoodMajor
Plant commissioning finished ahead of schedule and the ramp-up to production began: first ore exposed in March 2016, first ore through the plant on 20 June and first diamonds recovered on 30 June, including 12.10 and 24.65 carat gem-quality stones. The first split of production with De Beers was set for mid-September and the first sale before the end of 2016, with commercial production targeted for the first quarter of 2017.
7 Apr 2015debt financing▲ GoodMajor
Closed the US$370 million term loan, seven years at US dollar LIBOR plus 5.5%, with Natixis, Scotiabank and Nedbank leading a syndicate that also took in ING, Export Development Canada and Bank of Montreal. With it the company said the whole cost of building and commissioning Gahcho Kué was covered, ending three years in which construction had been paid for entirely out of repeated share issues. All 2015 ice-road deliveries were completed on schedule.
31 Mar 2015capital raising announcement▲ GoodMajor
The C$95 million rights offering was oversubscribed, with 23,761,783 shares issued and Desmond's standby commitment left unused. The money funds the US$75 million cost-overrun facility that is the condition for drawing the US$370 million term loan. Shares outstanding reached 158,966,333, roughly double the 80.7 million of late 2012.
26 Mar 2015debt financing▲ GoodMajor
Primary syndication of the US$370 million loan was completed, leaving documentation and closing. Drawing on it still depended on funding the cost-overrun account out of the C$95 million rights issue closing on 30 March, which Dermot Desmond had agreed to backstop in full.
5 Mar 2015drilling result▲ GoodMajor
Caustic fusion of 434 kilograms of core from the 2014 deep holes recovered 2,514 diamonds weighing 3.24 carats in total, of which 2.46 carats were stones larger than 0.85mm - a sample grade of 5.67 carats per tonne at that cut-off. The coarse end was thin, with a single stone in the +2.36mm class and none above 3.35mm.
3 Feb 2015debt financing▲ GoodMajor
The lenders gave credit approval for the US$370 million facility, with Scotiabank replacing Deutsche Bank as a lead arranger for reasons the company said were unrelated to the project; Natixis and Nedbank stayed. Drawing on the loan still required a separate cost-overrun facility to be arranged first, so no money was available yet. Construction was more than half complete at the end of 2014.
8 Jan 2015debt financing● Neutral
A brief update saying the US$370 million term loan was still being arranged and still awaited final credit approval and documentation. No terms were disclosed and nothing had been signed.