JOINT VENTURE: Gahcho Ku deal reworked

NORTHWEST TERRITORIES — The joint venture agreement between De Beers Canada and Mountain Province Diamonds covering the Gahcho Kué diamond project 300 km northeast of Yellowknife has been revised. The original agreement was reached in 2002, but now with a feasibility study on the horizon and the environmental assessment underway, the partners have chosen to revamp the deal.

De Beers will continue to hold 51% of the project and Mountain Province 49%. Each company will market its proportionate share of diamond production independently. Future development costs will also be shared proportionally.

Mountain Province has agreed to repay De Beers $59 million (49% of an agreed sum of $120 million already spent at the Gahcho Kué). Payments are staged to be made at various project milestones, and Mountain Province has given De Beers certain security for the repayment. Mountain Province has also agreed to pay all of the costs for the feasibility study.

The Gahcho Kué projects consists of a cluster of kimberlites, three of which have an indicated resources of 30.2 million tonnes grating 1.67 carats/ tonne or 50.5 million contained carats. There is also an inferred resources of 6.0 million tonnes grading 1.73 ct/t.

Visit www.MountainProvince.com to view pictures of the 25-ct diamond unearthed during last year's bulk sampling program (it is close to the size of a Canadian 25-cent coin).