Mountain Province Diamonds Declares Completion of C$95 Million Rights Offering

Mountain Province Diamonds declared the successful completion of its C$95 million rights offering, resulting in the issuance of 23.76 million common shares.

A total of 22.08 million common shares were subscribed for under the basic subscription privilege, with the rest 1.68 million shares being filled via the additional subscription privilege. A total of 4.01 million common shares were subscribed for under the additional subscription privilege, representing an oversubscription, as only 41.9% (on a pro-rata basis) of additional subscriptions were able to be filled.

As the rights offering was fully subscribed, the company’s major shareholder Dermot Desmond, who entered into a stand-by agreement to ensure all shares were subscribed for, will not subscribe for any additional shares.
Recall, the earnings of the rights offering will be used to fund a $75 million cost overrun account required for drawdown on the term loan facility. The firm highlighted that finalization of the term loan facility remains subject to completion of the facility documentation, which is anticipated shortly.

We maintain our “Sector Outperform” rating, and look forward to the finalization of the term loan facility. Diamond prices, permitting risk, development risk, technical risk and operating risk are major risks to be considered while trading. Our risk assessment remains “Speculative”.

About

Richard Folds, Post graduate in Finance, is financial analyst and focuses Basic Materials, Technology and Healthcare sectors. Prior joining Broadway Leader, Richard Folds worked with Wells Fargo. If you have a great story idea for Richard Folds, you can write at [richard.folds@broadwayleader.com].

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