Mountain Province Diamonds Announces Mailing of Meeting Materials For Annual and Special Meeting of Shareholders, Seeks Approvals to Facilitate Potential Restructuring Transaction

Mountain Province Diamonds has mailed proxy materials for its June 30, 2026 shareholder meeting, seeking approval to facilitate a sweeping restructuring that could effectively take the company private. The proposed resolutions include a share consolidation that would squeeze out minority holders, voluntary delisting from the TSX, a US$1 million facility fee, and continuance from Ontario to British Columbia. The release also discloses that, as of March 31, 2026, the company had only CAD$219,000 in cash against total indebtedness of approximately USD$290.6 million (excluding unpaid interest). Critical obligations loom: US$26.2 million of deferred interest on 9% senior secured notes due June 15, 2026; CAD$33 million in reclamation payments to De Beers due June 30; and CAD$129.5 million in arrears on diamond‑proceeds in‑kind election notices. The board has lost three directors and its auditor, KPMG, resigned.

The most‑recent announcement is a clear signal that the company is insolvent and that existing equity is effectively worthless. The proposed “going‑private” share consolidation—coupled with the staggering debt pile and immediate payment defaults—strongly suggests that common shareholders will be cashed out for pennies, if anything, or left holding illiquid scrap after delisting. The news is not an incremental step but the formalization of a terminal restructuring. It materially changes the risk profile: the stock now represents a bet on a highly dilutive rescue that most shareholders will not survive. The earlier releases throughout 2025‑2026 painted a deteriorating picture—plunging diamond prices, negative EBITDA, relentless debt extensions—and the May 26 mailing confirms that management and its lenders are moving decisively to restructure in a way that prioritizes creditors over equity. This is a textbook Material – Negative event.

Mountain Province Diamonds holds a 49% interest in the Gahcho Kué (GK) diamond mine in the Northwest Territories, a joint venture with De Beers Canada (51% operator). The mine is a world‑class open‑pit operation. The company also controls the Kelley and Faraday kimberlite resources nearby. GK has historically been a high‑value asset, but extreme market headwinds, falling rough‑diamond prices, and heavy cost burdens have erased its equity value.