Mountain Province Diamonds has entered a definitive arrangement agreement to acquire all the issued and outstanding common shares of Kennady Diamonds in a deal worth C$176m ($142.4m).
Under the deal, Kennady shareholders will receive 0.975 Mountain Province common shares for each Kennady unit.
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After completion of the transaction, Mountain Province shareholders will hold a 76% stake in the combined company, while the remaining 24% interest will be with Kennady shareholders.
Mountain Province interim president and CEO David Whittle said: “The Kennady assets are a strong complement to Mountain Province’s interest in the Gahcho Kué project, significantly adding to our attributed resource base.
“Kennady’s exploration efforts have been very successful and we have high confidence in our ability to continue that success, not only through expanding the existing resources at Kelvin and Faraday but through the potential for further discoveries, not just in the Kelvin-Faraday corridor but elsewhere across the property.”
The transaction is expected to improve Mountain Province’s portfolio, with the addition of Kennady’s 100%-owned diamondiferous bodies that host indicated resources of 13.62 million carats and inferred resources of 5.02 million carats.
The acquisition is expected to close by April this year and is subject to shareholder, as well as court approval.
It is also subject to customary deal protections with a mutual break fee of C$6m ($4.86m), which would be payable under certain situations.
