Mountain Province buys Kennady Diamonds

Mountain Province Diamonds Inc. April 13 completed its acquisition of Kennady Diamonds Inc. in an all-share deal worth roughly C$176 million.

Kennady Diamonds owns Kennady North, a rapidly advancing diamond project about seven kilometers (4.5 miles) northeast of Gahcho Kué – a mine owned by Mountain Province (49 percent) and De Beers Canada (51 percent).

Since being spun out of Mountain Province in 2012, Kennady has identified a series of diamond-rich kimberlites along a corridor that trends northeast from the Gahcho Kué property 3,000 meters onto the Kennady North property.

Kelvin, the most advanced kimberlite on the Kennady North property, hosts an indicated resource of 13.62 million carats of diamonds contained in 8.5 million metric tons of kimberlite averaging 1.6 carats per metric ton, according to a resource calculated at the end of 2016.

In October, Kennady reported a maiden inferred resource for the Faraday kimberlites, which are about 2,000 meters northeast of Kelvin, of 5.02 million carats of diamonds in 3.27 million metric tons of kimberlite averaging 1.54 carats per metric ton.

In February, Kennady Diamonds began a roughly 10,500-meter winter drill program focused largely on high priority exploration targets along the Kelvin-Faraday corridor.

The Kennady North property also wraps around the west and southwest sides of Gahcho Kué. If time permits, Kennady plans to test new targets, immediately southwest of the Gahcho Kué Mine.

"Mountain Province is well positioned for future growth with the completion of this Kennady acquisition, given Kennady's already-established resource base as well as the success Kennady continues to achieve through its ongoing exploration endeavors," said David Whittle, interim president and CEO, Mountain Province Diamonds.

With the completion of the buy-out, Kennady shareholders received 0.975 Mountain Province shares for each Kennady share held, representing the equivalent of C$3.46 per Kennady share on Jan. 26, just before the arrangement was announced. This represents a premium of 26 percent to Kennady's closing price on that day.

Mountain Province intends to delist Kennady shares from the TSX Venture Exchange and Kennady intends to submit an application to cease to be a reporting issuer and to terminate its public reporting obligations.

The directors and officers of Kennady have been replaced by David Whittle (director and CEO) and Perry Ing (CFO and corporate secretary).

–SHANE LASLEY