Thursday 22 February 2018

Desmond diamond mine to raise €21m in placing

STAKE: Dermot Desmond
STAKE: Dermot Desmond
Nick Webb

Nick Webb

MOUNTAIN Providence, the €350m-valued Canadian diamond mining firm backed by billionaire Dermot Desmond, is seeking to raise close to €21m from investors to help fund the development of the biggest new diamond mining project in the world.

The non-brokered private placement was increased in size due to the strong support of existing shareholders.

Desmond's Bottin Investments holds a 24 per cent stake in the firm, worth around €80m.

Desmond's firm has indicated that it will subscribe for shares in the placement.

Mountain Province Diamonds has a 49 per cent stake in the landmark Gahcho Kue project in Canada's Northwest Territories.

De Beers Canada is the other shareholder in the project. It is likely that the mine could hold as much as 49 million carats of diamonds.

The mine could cost close to €600m to bring into production.

The Toronto-listed company has seen its share price rise fivefold over the last four years as it brings the ambitious Gahcho Kue project closer to fruition.

Just over a year ago, Mountain Province tapped up shareholders in a €33m rights issue to fund the capital-intensive development of the mine.

Analysts have tipped Mountain Province as a potential takeover target for De Beers.

In 2011, Mountain Province revealed that it had rebuffed a buyout approach.

"After receiving unsolicited expressions of interest from third parties, the company has decided to cease discussions and other engagement with those third parties," it told Canada's stock market.

Diamonds are only one part of the financier's wealth, as he has interests in biometrics, travel software, football and blue-chip debt.

Last week it emerged that Desmond was to take a 15 per cent stake in INM following a €40m capital raise as part of a major debt restructure.

Sunday Independent

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