Mountain Province Diamonds results of seventh diamond sale and exploration update

A 67.87 carat diamond from Mountain Province Diamond Inc.'s Gahcho Kué mine. — Photo courtesy Mountain Province Diamonds Inc.

Sept. 18, 2017 /CNW/ - Mountain Province Diamonds Inc. ("Mountain Province", the "Company") (TSX and NASDAQ: MPVD) today announces the results of its recently completed seventh diamond sale. A total of 463,000 carats were sold for proceeds totalling US$27.1 million, a 30% increase over the preceding sale proceeds despite there being significantly fewer fancies and specials on offer in this sale. This was the Company's largest single sale to date in terms of both total value and carats sold, with carat volume reflecting strong production throughput and grade at the mine as well as the opportunity to fast-track just over 85,000 carats of smaller size diamonds into this sale.

All lots on offer were sold. As previously indicated would be the case, the realized value per carat from this sale was averaged down from the fast-tracked inclusion of just over 85,000 carats of smaller sized goods. As a result of a procedural change by the Government of the Northwest Territories to expedite processing of the Company's smaller sized goods for royalty valuation purposes, the Company is able to bring such diamonds to market sooner than was previously the case. A portion of such accelerated goods was included in this seventh sale, and the remainder will be included in subsequent sales. The seventh sale also included significantly fewer fancies and specials than previous sales, further averaging down the realized value per carat as compared to previous sales, as De Beers Canada was the successful bidder for the main component of the fancies and specials associated with this sale assortment. Adjusting to include the fancies and specials at the value paid by De Beers, and to exclude the fast-tracked smaller sized goods, the value realized per carat in the seventh sale was US$72, generally consistent with the year-to-date adjusted realized sale value of approximately US$75 per carat.

Said Reid Mackie, the Company's Vice President Diamond Marketing, "It is encouraging to see Mountain Province's sales process and customer bidding continue to deliver robust levels of competition. Attendance and average bids per lot were consistent with previous sales, and this sale saw our highest level of lots won by return customers. This demonstrates that, in spite of current trading conditions being somewhat challenging, our diamonds are becoming well established in the market and their positive manufacturing results continue to engender customer support."

At the Gahcho Kué mine site, the joint venture partners have approved a fall exploration program focused on an area between the 5034 and Hearne pipes referred to as the Southwest Corridor, with a total budget of $2.3 million. With much of it already scheduled under the mine plan to be mined as waste rock, in the course of stripping activity this area has been recognized as containing diamondiferous kimberlite that is not included in the project resource statements. Geophysical survey work has already commenced under the program, with follow-up drill work scheduled for later this year. Said David Whittle, the Company's Interim President and Chief Executive Officer, "With the mining of the Southwest Corridor already costed into the project as waste removal, the ability to convert any such tonnage into feed for the plant is a clear opportunity given the small incremental cost per tonne for processing. We look forward to the results of this exploration program."

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 and projected to produce an average of 4.5 million carats a year over a 12 year mine life.

The Gahcho Kué Diamond Mine consists of a cluster of four diamondiferous kimberlites, three of which are being developed and mined under the current mine plan.

This news release has been prepared under the supervision of Carl G. Verley, P.Geo., who serves as the qualified person under National Instrument 43-101.

Forward-Looking Statements Apply