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Mountain Province Diamonds raising US$325M to restructure debt

Mountain Province Diamonds Inc. is planning a private offering of senior secured second-lien notes due 2022 to raise US$325 million. The liens securing the notes will be junior to liens securing a new US$50 million revolving credit agreement the company expects to enter into concurrently.

The new notes will be guaranteed by Mountain Province's subsidiaries and will also be secured by its assets on a second-priority basis, according to the company's Nov. 27 statement, with terms to be subject to market and other conditions.

Mountain Province's main asset is a 49% participating interest in the Gahcho Kué diamond mine in Canada's Northwest Territories, which is a joint venture with Anglo American Plc's De Beers SA subsidiary. The operation achieved commercial production earlier this year.

The company will use the funds to repay and terminate a US$370 million project loan facility as well as debts owed to De Beers related to the development of the mine.

Mountain Province said that as of Sept. 30, US$357 million of the US$370 million facility was outstanding, with C$48.5 million owed to De Beers.