KEY POINTS
- De Beers Canada will take full ownership of Gahcho Kué.
- Mountain Province will be released from the mine’s liabilities.
- The company gets six months to restructure and seek new funding.
Canadian diamond miner Mountain Province has agreed to give up its ownership stake in the Gahcho Kué diamond mine as part of a restructuring deal aimed at easing financial pressure on the company.
Under the agreement, De Beers Canada will take full ownership of the mine, located in Canada’s Northwest Territories. The deal will also release Mountain Province and its related entities from obligations and liabilities associated with the operation.
Mountain Province said the agreement provides a path to protect stakeholder value amid difficult conditions in the global diamond market.
De Beers to take full ownership
The restructuring implementation agreement was reached between Mountain Province, De Beers Canada, lender Dunebridge Worldwide and the beneficial holders of Mountain Province’s senior secured notes, which are due in December 2027.
As part of the agreement, De Beers will assume full ownership of Gahcho Kué.
Mountain Province will be released from the liabilities linked to the mine, reducing the financial obligations weighing on the company.
The agreement also preserves certain rights that could allow Mountain Province to regain an ownership interest in Gahcho Kué in the future.
Diamond prices put pressure on miner
Mountain Province president and CEO Jonathan Comerford said the restructuring followed an extensive review of the alternatives available to the company.
The review came against the backdrop of a significant decline in diamond prices over the past year.
According to Comerford, tariff-related uncertainty and the conflict in the Middle East have contributed to the challenging market conditions facing the diamond industry.
The weaker diamond market has placed pressure on producers, making it more difficult for companies to maintain operations and meet financial obligations.
Six-month breathing space
The restructuring agreement also gives Mountain Province additional time to stabilise its finances.
Noteholders and Dunebridge have agreed to suspend interest and capital repayments, as well as the exercise of specified rights, for six months.
The temporary suspension is expected to give Mountain Province time to restructure its balance sheet and seek new sources of funding.
The company hopes that improved diamond market conditions could strengthen its ability to raise capital and potentially exercise its rights relating to Gahcho Kué in the future.
Kennady assets remain in focus
Mountain Province also intends to use the restructuring period to pursue opportunities linked to its Kennady diamond assets.
Comerford said new funding, if secured and supported by an improvement in diamond market conditions, could help the company participate in the future of Gahcho Kué and continue developing the Kennady assets.
The agreement therefore does not completely close the door on Mountain Province’s involvement in Gahcho Kué.
Instead, the company is giving up its current ownership position while retaining rights that could provide an opportunity to return to the mine later.
Company seeks to protect stakeholders
Comerford described the agreement as the most credible route for Mountain Province to protect stakeholder value under the current circumstances.
He said the restructuring removes liabilities, provides greater certainty for employees and communities connected to Gahcho Kué, and gives the company time to work on its balance sheet and funding position.
The outcome reflects the pressure facing diamond miners as weaker prices and broader geopolitical and trade uncertainties affect the industry’s financial outlook.
