Mountain Province Diamonds Inc. will transfer its remaining stake in the Gahcho Kué diamond mine to De Beers Canada Inc. under a restructuring agreement designed to settle outstanding debts and environmental obligations.
De Beers will assume full ownership of the Northwest Territories mine by acquiring the 49% interest held by a Mountain Province subsidiary, according to an Oct. 1 announcement. The transaction resolves reclamation payments and all debts owed to De Beers under existing joint venture and security agreements.
With Rio Tinto’s Diavik mine closing in March and the Ekati mine filing for solvency in spring, Gahcho Kué is currently the last producing mine in Canada. It recovered more than 2 million carats in the first quarter, up 163% year on year. It sold 858,173 carats for $29.2 million, with an average value of $34 per carat against $72 a year earlier.
Jonathan Comerford, president and CEO of Mountain Province, attributed the restructuring to a sharp decline in diamond prices over the past year, driven by tariff-related uncertainty and conflict in the Middle East.
The restructuring also includes Dunebridge Worldwide Ltd. and holders of the company’s senior secured lien notes, who agreed to suspend interest and capital repayments for six months while Mountain Province seeks new funding and restructures its balance sheet.
“It provides the most credible path to protect stakeholder value in the current circumstances,” Comerford said in a statement. “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.”
Despite relinquishing operational control, Mountain Province secured several provisions for potential future involvement. The company holds both a right of first offer and right of first refusal should De Beers decide to sell the asset. Mountain Province also retains an option to repurchase its 49% interest before Dec. 31, 2029, at a price equivalent to decommissioning costs.
The restructuring unconditionally releases Mountain Province and its subsidiaries from all outstanding indebtedness and obligations related to the joint venture with De Beers.
Mountain Province will continue to control more than 96,000 hectares of mineral claims and leases surrounding the GK Mine located in Canada’s Northwest Territories, including mineral resources for the Kelvin and Faraday kimberlites that could be developed if market conditions improve.
The JCK News Desk uses AI to help research and produce the first draft of articles. This story was then reviewed by staff writer Libby Rutkey.
(Photo courtesy of De Beers Group)
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