Mountain Province foregoes stake in Gahcho Kué amid pressures
Canadian diamond miner Mountain Province has entered into a consensual restructuring implementation agreement with De Beers Canada, lender Dunebridge Worldwide and the beneficial holders of Mountain Province's senior secured notes due December 2027.
The agreement provides for De Beers to assume full ownership of the Gahcho Kué diamond mine in the Northwest Territories, releases the Mountain Province entities from associated obligations and liabilities, and preserves rights that allow the company to regain an ownership interest in the mine in future.
Mountain Province president and CEP Jonathan Comerford says the agreement follows an extensive review of the alternatives available to the company against the backdrop of a material decline in diamond prices over the past year - driven by tariff-related uncertainty and the conflict in the Middle East.
"The agreement provides the most credible path to protect stakeholder value in the current circumstances. It removes all liabilities, provides greater certainty for the employees and communities connected to Gahcho Kué, and preserves rights that allow Mountain Province to participate again in the mine's future.
"The noteholders and Dunebridge have also agreed to provide the company with a six-month period during which interest and capital repayments and the exercise of specified rights will be suspended, giving it time to restructure the balance sheet and pursue new funding. If diamond market conditions continue to improve, that funding could support the future exercise of the company's rights in relation to Gahcho Kué and the continued development of the Kennady diamonds assets," Comerford explains.
