Mountain Province Diamonds Obtains Waiver Under Revolving Credit Facility
TORONTO and NEW YORK, July 13, 2020 – Mountain Province Diamonds Inc. (the “Company”) (TSX: MPVD) (OTCQX: MPVD) today announces that, further to previously disclosed challenges in the diamond markets, it has entered into a waiver agreement (the “Waiver”) related to the senior secured revolving credit facility agreement dated as of December 11, 2017 (as amended prior to the date hereof, the “Credit Agreement”) among the Company, as parent guarantor, 2435572 Ontario Inc., a wholly owned subsidiary of the Company, as borrower (the “Borrower”), 2435386 Ontario Inc., a wholly owned subsidiary of the Company, as guarantor, The Bank of Nova Scotia, as administrative agent and lender, and Nedbank Limited, London Branch, as lender.
The Waiver exempts the Company from compliance with financial covenants including the total leverage ratio, total net worth tests that it would otherwise have had to satisfy as of June 30, 2020. The Waiver also removes the Borrower’s covenant to maintain a minimum cash balance. In exchange, the Company has agreed to a reduction in the size of the revolving credit facility to US$25 million from US$50 million and the imposition of additional covenants. These covenants include weekly reporting, a covenant with respect to the sale of diamonds and limitations on the payment of bonuses and incentive payments, the incurring of indebtedness, the dispositions of assets and the incurring of liens. Moreover, the obligors under the Credit Agreement are required to maintain certain performance metrics with respect to net cash flows and expenditures. In addition, the Borrower is required to demonstrate progress by August 31, 2020 to be able to enter into a binding financing commitment by September 30, 2020 in order to repay the revolving credit facility. The Waiver contains customary representations and warranties and events of default.
The Company also continues its negotiations with its major shareholder and other financial institutions to secure additional debt facilities in order to repay the current lenders and meet short term obligations and will update the market accordingly.
About Mountain Province Diamonds Inc.
Mountain Province Diamonds is a 49% participant with De Beers Group in the Gahcho Kué diamond mine located in Canada’s Northwest Territories. The Gahcho Kué Joint Venture property consists of several kimberlites that are actively being mined, developed, and explored for future development. The Company also controls 67,164 hectares of highly prospective mineral claims and leases immediately adjacent to the Gahcho Kué Joint Venture property that include an indicated mineral resource at the Kelvin kimberlite and inferred mineral resources for the Faraday kimberlites.
For further information on Mountain Province Diamonds and to receive news releases by email, visit the Company’s website at www.mountainprovince.com