Mountain Province announces retraction of previous disclosure relating to 2005 Gahcho Kué Study Report

    Shares Issued and Outstanding: 59,723,531
    TSX: MPV
    AMEX:   MDM

    TORONTO and NEW YORK, Aug. 27 /CNW/ - Mountain Province Diamonds Inc.
(TSX: MPV, AMEX:   MDM) (the "Company") today announced that it is retracting
all previous references to the economics of the Gahcho Kué diamond project
derived from the 2005 Study Report, which is a preliminary economic assessment
produced by AMEC Americas Ltd. and DeBeers Canada ("De Beers") under the
direction of the Gahcho Kué project operator De Beers.
    This retraction is being made at the request of the Ontario Securities
Commission ("OSC") which has advised the Company that disclosure of the Gahcho
Kué project economics requires the filing of a technical report in compliance
with National Instrument 43-101 ("NI 43-101"). The 2005 Study Report provided
to Mountain Province by De Beers contains AMEC/De Beers' estimates of capital
and operating costs and was not prepared in the required technical report
format stipulated under NI 43-101. At the present time, shareholders should
not rely on the 2005 Study Report or any references thereto in materials
disclosed by the Company.
    Mountain Province has previously announced that De Beers is currently
preparing an update of the 2005 Study Report with the stated aim of improving
the project economics. This is due for completion before the end of the
calendar year. In view of the material nature of this report and the Company's
reporting obligations, the 2007 Preliminary Economic Assessment will be
prepared under NI 43-101 format standards in order to meet the OSC guidelines
and will be filed on Sedar.
    Mountain Province would also like to clarify the diamond valuation
figures presented by the Company. The estimated values for the Gahcho Kué
diamonds as provided by DeBeers for the bulk sample diamonds were US$77 per
carat for the indicated resource portion of the bulk sample and US$71 per
carat for the inferred portion of the diamonds based on the DeBeers June 2005
price book.
    As previously reported, Mountain Province contracted WWW International
Diamond Consultants to perform an independent analysis of the bulk sample
diamonds. The WWW report, which was prepared in June 2006, indicated an
average price of US$83 per carat for the entire parcel. Mountain Province
continues to use this WWW valuation of the diamonds as the valuation of the
Gahcho Kué diamonds.
    Other diamond value prices previously referred to by Mountain Province
should be disregarded unless the specific basis of the derivation of the price
is appropriately indicated. Likewise, as all diamonds are sold in US$, all
price references will be indicated in US $ terms going forward.
    Located in Canada's Northwest Territories, Gahcho Kué is the largest new
diamond mine under development globally. The project consists of a cluster of
three primary kimberlites with an indicated resource of approximately 14.4
million tonnes grading at 1.64 carats per tonne (approximately 23.6 million
carats) and an inferred resource of approximately 17 million tonnes grading at
1.35 carats per tonne (approximately 22.9 million carats). Gahcho Kué is
currently in the permitting and advanced exploration stage of development.
    Mountain Province Diamonds (49 percent) is a joint venture partner with
De Beers Canada Inc (51 percent) in the Gahcho Kue project. De Beers is the
operator of the project and can be called on to fund the project through to
commercial production. If called on to fund a definitive feasibility study De
Beers' interest in the joint venture will increase to 55 percent upon the
completion of a feasibility study. If called on to fully fund the mine's
construction De Beers' interest in the joint venture will increase to 60
percent following the commencement of commercial production.

    Qualified Person
    This news release has been prepared under the supervision of Carl G.
Verley, P.Geo., who serves as the qualified person under National Instrument

    Forward-Looking Statements
    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.

    %SEDAR: 00005311E          %CIK: 0001004530

For further information:

For further information: Mountain Province Diamonds Inc., Patrick Evans,
President and CEO, Tel: (416) 670-5114

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