Mountain Province Investment Case

Transcription

1 TSX & NASDAQ: MPVD

2 Mountain Province Investment Case World s largest and richest new diamond mine Partnered with De Beers Projected top quartile operating margin March 2017 commercial production declared Mid 2017 full production achieved Initial mine life 12 years Potential for mine life extension Vision: To be a Tier 1 asset: +20 year LOM, +$20 Billion in situ value 2

3 Share Structure Markets: TSX & NASDAQ: MPVD Market cap: ~C$650M Shares outstanding: 160.2M Fully diluted: 163.1M 3

4 Mine Location 4

5 Gahcho Kué Mine 5

6 Joint Venture with De Beers MPV 49% / De Beers 51% JV Board - 2 representatives each All material decisions by consensus Effectively 50/50 JV De Beers: mine operator Each markets their own share of diamonds 6

7 2017 Production Guidance 2017 Full Year Guidance Original H1 Actual 2017 Full Year Guidance Revised 2 Ore Tonnes 000s (100% basis) 2,720 1,259 2,720 Grade (cts/t) Total Cts 000s (100% basis) MPV Cts 000s (49% basis) 4,400 2,481 5,500 2,200 1,216 2,700 Price Guidance of US$70-$90 per carat, provided in Q Original guidance provided in news release of April 25, 2017 entitled Mountain Province Diamonds Production Report for the First Quarter ended March 31, Revised guidance provided in news release of August 9, 2017 entitled Mountain Province Diamonds Announces June 30, 2017 Quarter End Results 7

8 Value Realization Production Period 3 Incept to EOY 2016 Sale in Which Goods Were Primarily Sold n/a 2 n/a 2 n/a 2 Q Apr 2017 May 2017 Jun 2017 Jul 2017 Aug 2017 YTD Total 2017 Tonnes Processed (100%) ( 000s) ,841 Recovered Grade (carats per tonne) Carats Recovered (100%) ( 000s) ,772 Carats Recovered (49% share) ( 000s) ,848 Attributed Value per Tonne in CAD n/a 2 n/a 2 n/a 2 1 Attributed Value per Tonne has been determined based on realized sale results, with any accelerated or deferred goods adjusted to their period of production, reflecting only the Company s 49% share of all diamonds including fancies and specials. 2 Not applicable as goods from this production period have not yet been sold. 3 Total figures may differ slightly from the sum of monthly figures due to the effects of rounding. Ore production rates have been strong Diamond processing plant functioning at and above nameplate capacity Total production costs to date broadly consistent with budget Per-carat price realization impacted by: current rough market price levels; quality distribution of 5034 pipe s upper layer not yet representative of bulk sample results; market valuation of stone fluorescence; and price discovery process Partially mitigated by grade over-performance and weaker Canadian dollar 8

9 Rough Diamond Price Index August 2014 Valuation -20% 9

10 5034 Kimberlite Six Lobes Diamond distribution in North and East lobes variable by layer Three layers: upper transitional tuffisitic, middle transitional hypabyssal and lower hypabyssal (HK) Center lobe only HK Center and West lobe diamond distribution highly variable 10

11 5034 Bulk Sample Bulk samples taken from across the length, breadth and depth of ,957 carats from Center and East Lobes 1,132 carats from West Lobe Total: 3,089 carats 23.2 M ct Reserve Early diamond sales not yet representative of bulk sample results 11

12 Fluorescence Approx 1/3 of all natural diamonds fluoresce Fluorescence seen in bulk sample limited to white colors (approx. 25% of bulk sample) Blue fluorescence only visible under black light. Under natural light fluorescing diamonds look brighter Fluorescence varies from faint to medium to very strong 9.9 carat 5034 C/E bulk sample diamond has strong fluorescence; 25 carat Tuzo diamond has faint fluorescence Market tolerance for fluorescence corresponds to strength of market. Weak diamond market = lower tolerance; strong diamond market = higher tolerance Pricing discounts from equivalent grade, but non-fluorescing, stones have generally ranged from 5% for faint to 35% for very strong fluorescence Marketing strategy is to maximize participation from buyers tolerant of fluorescent diamonds Target is to reduce fluorescence discount 12

13 Fluorescence Under Black Light Very Strong Strong Medium Faint 13

14 Price Discovery Example Feasibility modeled price +$300/ct 14

15 CAD/USD Feasibility assumption US$0.91 CAD down ~ 13% against feasibility assumption 15

16 Product Profile in Early Production Wide product variation Fancies and Specials <0.5% by weight and approx. 15% of value Gem and near gem 60% by weight and approx. 80% of value Industrial and boart 40% by weight and approx. 5% by value Significant population of large Special stones Multiple Special stones in recent sales achieved +$10,000/ct 16

17 Fancies and Specials Less than 0.5% by volume but high value concentration Quality is variable gem, near gem and boart Color is variable white, grey, brown 9.9 ct stone from 5034 C/E bulk sample, D colour, valued at $18,500/ct. Sample large gem quality stones sold by MPVD to date include a carat white gem and a carat of off-white gem, and a carat white gem 156 carat largest diamond to date, but boart No quality trend is evident yet 17

18 Sale Results 2017-Q1 Sales May Sale Jun Sale Jul Sale Sep Sale 7 Tender Sale Proceeds (USD million) Carats Sold ( 000s) Value per Carat (USD) Normalized Value per Carat (USD) Diamonds sold at individual sale events will not directly reflect run-of-mine production from specific processing periods. The timing of the sale of some goods may be accelerated or deferred for tactical marketing purposes. Realized average value per carat is also impacted by the binary nature of the fancies and specials bidding process within each production split, conducted approximately every five weeks with the Company s joint venture partner, De Beers Canada Inc. The winning party of each fancies and specials bid then markets 100% of those diamonds. 2 Normalized to adjust for goods accelerated or deferred, and to include fancies and specials acquired through bid by De Beers Canada Inc. Early sales weak due to Indian demonetization, market s price discovery of a new production, and higher percentage of browns and lower quality Specials Indian demonitization impact largely dissipated by July Price discovery impact now becoming reduced General rough diamond market, particularly for Indian goods, currently weighed down by excess polished inventories and financial weaknesses within the Indian cutting and polishing sector Tender process functioning well bids per lot consistently averaging between 10.4 and 11.4 since early sales, customer participation strong and steady, feedback is positive 18

19 Debt Service Debt Service Schedule (US$) based on $357 million Loan Year Principal + Interest Reserve Account ,461, ,900, ,865,000 (28,600,000) ,968,000 (42,000,000) ,048,000 (74,000,000) ,650,000 (31,000,000) ,147,000 (3,300,000) Total 435,139,000-19

20 Status of Bank Waiver Requirement to fund cash call reserve accounts waived until November 30, 2017 Draft updated Life of Mine Plan has been provided to Lenders for review Plan has been optimized following initial months of operations, will include impact of winterization improvements and 5034 east wall push-back, plus impact of positive grade experience to date Draft Plan undergoing detailed review by Lenders technical advisors and by Anglo Technical Services Detailed discussions with Lenders are ongoing as to restructuring alternatives Management s top priority: achieve substantive agreement on a revised debt facility framework by end of waiver period 20

21 Path to Tier 1 Asset Phase Carats LOM Phase 1: Reserve 55M 12 years Phase 2: Resource 18.4M 5 years Phase 3: Tuzo Deep ~12M ~3 years Phase 4: Tesla & Other TBD* TBD* Phase 5: New Targets TBD* TBD* *To be determined Vision: +20 years LOM, +$20B in-situ Value 21

22 Phase 2 Development Pipe Tonnes (Mt) (Inferred) Grade (cpt) Carats (Mct) Tuzo Hearne Total Mine life potential from 12 to 17 years 22

23 Phase 3: Tuzo Deep Tuzo Deep Potential ~7M tonnes ~14M carats Mine Potential: years 23

24 Diamond Engagement Ring Demand Percent of Brides Receiving Diamond Engagement Rings 24

25 Declining Diamond Supply Chart source: Figure 41, The Global Diamond Report , Bain & Company, Inc. 25

26 Corporate Information Head Office 161 Bay Street Suite 1410 Toronto, ON M5J 2S1 Canada Tel. +1 (416) TSX & NASDAQ: MPVD 26

27 Forward Looking Statements Caution Regarding Forward Looking Information Cautionary Statement: This news release contains forward-looking statements under applicable Canadian and US securities regulations and legislation in which Mountain Province discusses its potential future performance. Forward-looking statements are all statements other than statements of historical facts, such as projections or expectations relating to ore grades and processing rates, production and sales volumes, cash costs, operating cash flows, capital expenditures, debt management initiatives, exploration efforts and results, development and production activities and costs, liquidity, tax rates, the impact of diamond price changes, reserve estimates, and future dividend payments. The words anticipates, may, can, plans, believes, estimates, expects, projects, targets, intends, likely, will, should, to be, potential and any similar expressions are intended to identify those assertions as forward-looking statements. Under its current project finance facility Mountain Province is not permitted to pay dividends on common stock unless and until obligations under the facility have been satisfied. The declaration of dividends is at the discretion of Mountain Province s Board of Directors, subject to restrictions under the Company s project finance facility, and will depend on Mountain Province s financial results, cash requirements, future prospects, and other factors deemed relevant by the Board. Mountain Province cautions readers that forward-looking statements are not guarantees of future performance and actual results may differ materially from those anticipated, projected or assumed in the forward-looking statements. Important factors that can cause Mountain Province s actual results to differ materially from those anticipated in the forward-looking statements include supply of and demand for, and prices of, diamonds, mine commissioning, mining sequencing, production rates, cash flow, industry risks, regulatory changes, political risks, labor relations, weather- and climate-related risks, environmental risks and other risk factors. Investors are cautioned that many of the assumptions upon which Mountain Province s forward-looking statements are based are likely to change after the forward-looking statements are made, including for example diamond prices, which Mountain Province cannot control, and production volumes and costs, some aspects of which Mountain Province may not be able to control. Further, Mountain Province may make changes to its business plans that could affect its results. Mountain Province disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required by law. This presentation has been prepared under the supervision of Carl Verley, P. Geo., a Qualified Person under National Instrument

28 Appendices 28

29 Resource category: Probable reserve Source: JDS Mining, March 2014 (100% basis) * After depletion from mining in 2016 Reserve Statement Pipe Tonnes (Mt) Grade (cpt) Carats (Mct) * * Tuzo Hearne Total 34.9* * Geological Model 29