Shares Issued and Outstanding: 80,345,558
NYSE- AMEX: MDM
TORONTO AND NEW YORK, Jan. 12, 2012 /CNW/ - Mountain Province Diamonds
Inc. ("Mountain Province", the "Company") (TSX: MPV, NYSE-AMEX: MDM) is
pleased to announce that its Board of Directors has approved a proposal
to spin-out the Company's 100 percent-controlled Kennady North diamond
project into a newly incorporated company, Kennady Diamonds Inc.
Patrick Evans, President and CEO, commented: "The proposed spin-out of
Kennady North is intended to deliver greater value to Mountain Province
shareholders by unlocking the value of this highly prospective diamond
project. The transaction will also enable Mountain Province to focus on
its flagship Gahcho Kué Project while Kennady Diamonds focuses on
advancing the 123 square-kilometer Kennady North Project."
The proposed spin-out will occur through a plan of arrangement (the
"Arrangement") and will be subject to regulatory and court approval, as
well as shareholder approval at a special meeting currently planned for
Upon completion of the Arrangement and the proposed listing of Kennady
Diamonds on the TSX Venture Exchange ("TSXV"), the Company intends to
distribute 100 percent of the shares of Kennady Diamonds to Mountain
Province shareholders on a pro rata basis. Mountain Province will also
provide Kennady Diamonds with sufficient working capital to fund the
planned exploration activities for 2012.
Additional details of the spin-out and the time and place for the
special meeting will be announced as soon as all the commercial, legal
and procedural formalities are finalized.
About Kennady Diamonds
The Kennady Diamonds comprises thirteen leases and claims located to the
west and north of the four leases controlled by the Gahcho Kué Joint
Venture between De Beers Canada Inc. (51%) and Mountain Province (49%).
Exploration at Kennady North commenced in the late 1990's and resulted
in the discovery of the diamondiferous Kelvin, Faraday and Hobbes
kimberlites. The number of diamonds recovered from these kimberlites
and the size-frequency distribution indicate that they may be of
comparable grade to the 5034 (1.77 carats per tonne) and Hearne (2.10
carats per tonne) kimberlites at the Gahcho Kué JV. Exploration samples
from Kelvin and Faraday returned a relatively large number of macro
diamonds with the two largest being a 0.4 carat diamond from Faraday
and a 0.09 carat diamond from Kelvin.
The known kimberlites at Kennady North do not explain all the
kimberlitic indicators previously recovered from glacial till sampling.
Exploration at Kennady North was suspended in 2004 when Mountain
Province focused the Company's attention on the Gahcho Kué
pre-feasibility and feasibility studies. Exploration at Kennady North
recommenced during 2011 with a 50-meter line spacing airborne gravity
gradiometry survey over the entire 123.6 square kilometer project area.
The survey has identified 29 high priority geophysical targets many of
which will be the subject of follow-up drilling during 2012.
About Mountain Province Diamonds
Mountain Province is a 49% participant with De Beers Canada in the
Gahcho Kué JV located at Kennady Lake in Canada's Northwest
Territories. The Gahcho Kué Project consists of a cluster of four
diamondiferous kimberlites, three of which have a probable mineral
reserve of 31.3 million tonnes grading 1.57 carats per tonne for total
diamond content of 49 million carats.
Gahcho Kué is the world's largest and highest grade new diamond mine
development. A December 1, 2010 feasibility study filed by Mountain
Province (available on SEDAR) indicates that the Gahcho Kué project has
an IRR of 33.9%. Gahcho Kué is currently being permitted.
Mountain Province Diamonds is included in the S&P/TSX Global Mining
This news release has been prepared under the supervision of Carl G.
Verley, P.Geo., who serves as the qualified person under National
This news release may contain forward-looking statements, within the
meaning of the "safe-harbor" provision of the Private Securities
Litigation Reform Act of 1995, regarding the Company's business or
financial condition. Actual results could differ materially from those
described in this news release as a result of numerous factors, some of
which are outside the control of the Company.
SOURCE Mountain Province Diamonds Inc.
For further information:
Patrick Evans, President and CEO