TSX and NASDAQ: MPVD
HIGHLIGHTS
The updated Mineral Resource Estimate for the Faraday 2
kimberlite contains:
- 5.45 million carats of diamonds
- 2.07 million tonnes of kimberlite
- Average value of US$140 per
carat
TORONTO and NEW YORK, May 28,
2019 /PRNewswire/ - Mountain Province Diamonds Inc.
("Mountain Province", the "Company") (TSX and NASDAQ: MPVD)
announces the filing on SEDAR of its National Instrument ("NI")
43-101 technical report titled "Project Exploration and Faraday
Inferred Mineral Resource Estimate Update, Kennady North Project,
Northwest Territories, Canada"
dated effective April 24, 2019 (the
"Technical Report"). The Technical Report describes the updated
Inferred Mineral Resource of 5.45 million carats for the Faraday 2
kimberlite as previously announced on April
11, 2019. Also included is an update of exploration work
conducted on the Kennady North Project to the end of 2018, and
summaries for the Inferred Mineral resource of 1.90 million carats
at the adjacent Faraday 1-3 kimberlite complex and the Indicated
Mineral Resource of 13.62 million carats at the nearby Kelvin
kimberlite.
The updated Inferred Mineral Resource for Faraday 2 includes
5.45 million carats of diamonds contained in 2.07 million tonnes of
kimberlite, with an overall grade of 2.63 carats per tonne and an
average value of US$140 per carat.
This represents a 49% increase in total tonnes and a 74% increase
in total carats for the Faraday 2 kimberlite. The Inferred Mineral
Resource at Faraday 2 has been updated to include the northwest
extension, which was discovered in 2017 and extended the kimberlite
by 150 meters. The average value of US$140 per carat is a 25% increase from the 2017
average values of US$112 per carat,
using a recoverable (+1 mm) diamond size frequency distribution for
each geological domain.
The updated resource was determined by Aurora Geosciences Ltd.
('Aurora') and SRK Consulting Inc. ('SRK'), who were engaged by the
Company to conduct the exercise.
President and CEO of Mountain Province Stuart Brown
commented: "We are very pleased with the diligent
efforts of our technical team in bringing to fruition the updated
technical report for the Faraday 2 kimberlite. I thank the authors
of the report, Mr. Gary Vivian of
Aurora Geosciences, and Mr. Cliff
Revering and Mr. Casey Hetman of SRK Consulting for
delivering a professional product that enhances our value portfolio
for the Kennady North Project."
Faraday 2 Updated Inferred Resource
The Faraday 2, Faraday 1-3, and Kelvin kimberlites are located
approximately 10 kilometers northeast of the Gahcho Kué Mine. The
Faraday 2 kimberlite is an irregularly shaped, inclined pipe-like
body that has been drill delineated for over 600 meters and remains
open to the northwest. The body varies in width between 30-50
meters and the vertical thickness ranges between 10-100 meters in
subcrop at the southeast end beneath Faraday Lake, to about 50
meters thick at the furthest end of the northwest extension.
The full scope of the 2019 mineral resource update for Faraday 2
has incorporated the following components:
- An updated geology model that includes drill-delineation of the
approximately 150-meter northwest extension;
- Additional microdiamond sampling of drill core and analysis of
results from the northwest extension;
- Revision of the diamond size frequency distributions and
revised estimates of average diamond grade for the four major
kimberlite domains within Faraday 2, based either on
commercial-sized (>1mm) diamonds recovered from large diameter
drilling, or on grade projections derived from corresponding
microdiamond data; and,
- Estimation of the average diamond value (US$ per carat) for
each domain, based on the revised diamond size frequency
distribution and a February 2019
re-pricing of the diamond parcels collected during 2016 and 2017
bulk sampling of Faraday 2 using large diameter reverse circulation
drilling.
The geological model for Faraday 2 is based on drilling and bulk
density data acquired to the end of 2018 that includes the
northwest extension. The database is comprised of 22,183 meters of
core drilling from 102 drill holes and 3,688 meters of large
diameter drilling from 31 RC drill holes. A total of 811 bulk
density measurements were derived from drill core within Faraday 2,
of which 250 are located within northwest extension. A total of
6.42 tonnes of core was processed for microdiamonds, and 726.47
carats of +1 DTC sieve diamonds contained in 275.38 tonnes of
kimberlite recovered by large diameter drilling were used for grade
and value determinations. The 2017 valuation of the +1DTC diamonds
was updated by WWW International according to their February 2019 price book. SRK then used the
updated valuation to determine an adjusted value distribution model
which was applied against the modeled size frequency distribution
curves for each geological domain to derive a weighted average US$
per carat estimate for the Faraday 2 kimberlite. Due to the small
quantity of carats available for grade and valuation estimates
there is a high degree of uncertainty in these estimates;
additional bulk sampling of Faraday 2 would increase the confidence
in the diamond grade and value estimates.
SRK Consulting Inc. (Vancouver,
B.C.) provided guidance on the evaluation program at Faraday
2 and recently completed a comprehensive review of geological,
microdiamond, bulk sampling, and valuation results in order to
estimate an Inferred Mineral Resource for the Faraday 2 kimberlite,
as provided in the table below.
Inferred Mineral Resource Estimate for the Faraday 2
Kimberlite1 (effective date of February 28, 2019)
Kimberlite
|
Tonnes
|
Grade2
|
Carats
|
Value
|
(million
tonnes)
|
(carats per
tonne)
|
(million
carats)
|
(US$ per
carat)
|
Faraday 2
(2019)
|
2.071
|
2.63
|
5.45
|
$1403
|
|
|
1)
|
The estimate includes
the entire Faraday 2 kimberlite as defined by the current
geological model, extending from the base of overburden (~390 masl)
in the southeast to depths of approximately 160 masl
|
2)
|
Grade is expressed as
recoverable diamonds above 1 mm bottom cut-off
|
3)
|
Average value is
derived by applying a base case value distribution model to models
of recoverable (+1 mm) diamond size frequency distribution for each
geological domain. Some rounding error may occur in the values
reported.
|
The NI 43-101 Standards and Canadian Institute of Mining and
Metallurgy guidelines for Mineral Resources and Mineral Reserves
stipulate that a Mineral Resource needs to have a "reasonable
prospect of economic extraction of the specified ore". SRK
concluded that the Faraday 2 kimberlite has reasonable prospects
for eventual economic extraction. Inferred Mineral Resources are
considered too speculative geologically to have the economic
considerations applied to them that would enable them to be
categorized as Mineral Reserves. Mineral Resources are not Mineral
Reserves and do not have demonstrated economic viability.
About the Company
Mountain Province Diamonds is a 49% participant with De
Beers Canada in the Gahcho Kué diamond mine located in Canada's Northwest Territories. Gahcho
Kué is the world's largest new diamond mine, consisting of a
cluster of various diamondiferous kimberlites, four of which are
being developed and mined under the current mine plan. The Company
also controls 67,164 hectares of highly prospective mineral claims
and leases immediately adjacent to the Gahcho Kué Mine that include
an indicated mineral resource at the Kelvin kimberlite and inferred
mineral resources for the Faraday kimberlites.
Qualified Person
The updated (2019) Inferred Mineral Resource estimate for the
Faraday 2 kimberlite was prepared by SRK Consulting Inc. under the
supervision of Mr. Cliff Revering,
P.Eng. Mr. Revering is a Professional Engineer and an
independent, external Qualified Person to Mountain Province under National Instrument
43-101. The technical contents of this news release were reviewed
and approved by Dr. Tom McCandless,
P.Geo., Vice President Exploration for Mountain Province and a Qualified Person as
defined by National Instrument 43-101 Standards of Disclosure for
Mineral Projects.
Caution Regarding Forward Looking Information
This news release contains certain "forward-looking
statements" and "forward-looking information" under applicable
Canadian and United States
securities laws concerning the business, operations and financial
performance and condition of Mountain Province Diamonds Inc.
Forward-looking statements and forward-looking information include,
but are not limited to, statements with respect to estimated
production and mine life of the project of Mountain Province; the realization of mineral
reserve estimates; the timing and amount of estimated future
production; costs of production; the future price of diamonds; the
estimation of mineral reserves and resources; the ability to manage
debt; capital expenditures; the ability to obtain permits for
operations; liquidity; tax rates; and currency exchange rate
fluctuations. Except for statements of historical fact
relating to Mountain Province,
certain information contained herein constitutes forward-looking
statements. Forward-looking statements are frequently
characterized by words such as "anticipates," "may," "can,"
"plans," "believes," "estimates," "expects," "projects," "targets,"
"intends," "likely," "will," "should," "to be", "potential" and
other similar words, or statements that certain events or
conditions "may", "should" or "will" occur. Forward-looking
statements are based on the opinions and estimates of management at
the date the statements are made, and are based on a number of
assumptions and subject to a variety of risks and uncertainties and
other factors that could cause actual events or results to differ
materially from those projected in the forward-looking
statements. Many of these assumptions are based on factors
and events that are not within the control of Mountain Province and there is no assurance
they will prove to be correct.
Factors that could cause actual results to vary materially
from results anticipated by such forward-looking statements include
variations in ore grade or recovery rates, changes in market
conditions, changes in project parameters, mine sequencing;
production rates; cash flow; risks relating to the availability and
timeliness of permitting and governmental approvals; supply of, and
demand for, diamonds; fluctuating commodity prices and currency
exchange rates, the possibility of project cost overruns or
unanticipated costs and expenses, labour disputes and other risks
of the mining industry, failure of plant, equipment or processes to
operate as anticipated.
These factors are discussed in greater detail in Mountain Province's most recent Annual
Information Form and in the most recent MD&A filed on SEDAR,
which also provide additional general assumptions in connection
with these statements. Mountain
Province cautions that the foregoing list of important
factors is not exhaustive. Investors and others who base
themselves on forward-looking statements should carefully consider
the above factors as well as the uncertainties they represent and
the risk they entail. Mountain
Province believes that the expectations reflected in those
forward-looking statements are reasonable, but no assurance can be
given that these expectations will prove to be correct and such
forward-looking statements included in this news release should not
be unduly relied upon. These statements speak only as of the
date of this news release.
Although Mountain Province
has attempted to identify important factors that could cause actual
actions, events or results to differ materially from those
described in forward-looking statements, there may be other factors
that cause actions, events or results not to be anticipated,
estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those
anticipated in such statements. Mountain Province undertakes no obligation to
update forward-looking statements if circumstances or management's
estimates or opinions should change except as required by
applicable securities laws. The reader is cautioned not to
place undue reliance on forward-looking statements.
Statements concerning mineral reserve and resource estimates may
also be deemed to constitute forward-looking statements to the
extent they involve estimates of the mineralization that will be
encountered as the property is developed.
Further, Mountain Province
may make changes to its business plans that could affect its
results. The principal assets of Mountain Province are administered pursuant to
a joint venture under which Mountain
Province is not the operator. Mountain Province is exposed to actions taken
or omissions made by the operator within its prerogative and/or
determinations made by the joint venture under its terms.
Such actions or omissions may impact the future performance of
Mountain Province. Under its current note and revolving
credit facilities Mountain
Province is subject to certain limitations on its ability to
pay dividends on common stock. The declaration of dividends
is at the discretion of Mountain
Province's Board of Directors, subject to the limitations
under the Company's debt facilities, and will depend on
Mountain Province's financial
results, cash requirements, future prospects, and other factors
deemed relevant by the Board.
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SOURCE Mountain Province Diamonds Inc.