corporate presentation sept 2019filecache.investorroom.com/mr5ircnw_mountainprovince/1337/mountain...

W W W. M O U NTA I NP ROV I NC E . C O M

T S X : M P V D | N A S D A Q : M P V D

CORPORATEPRESENTAT ION

SEPT 2019

MOUNTAIN PROVINCE DIAMONDS

FORWARD LOOKING STATEMENT

Cautionary Statement Regarding Forward Looking Information

Cautionary Statement: This presentation contains certain “forward-looking statements” and “forward-looking information” under applicable Canadian and United States securities laws concerning the business, operations and financial performance and condition of Mountain Province Diamonds Inc. (“Mountain Province”). Forward-looking statements and forward-looking information include, but are not limited to, statements with respect to estimated production and mine life of the project of Mountain Province; the realization of mineral reserve estimates; the timing and amount of estimated future production; costs of production; the future price of diamonds; the estimation of mineral reserves and resources; the ability manage debt; capital expenditures; the ability to obtain permits for operations; liquidity; tax rates; and currency exchange rate fluctuations. Except for statements of historical fact relating to Mountain Province, certain information contained herein constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as “anticipates,” “may,” “can,” “plans,” “believes,” “estimates,” “expects,” “projects,” “targets,” “intends,” “likely,” “will,” “should,” “to be”, “potential” and other similar words, or statements that certain events or conditions “may”, “should” or “will” occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are based on a number of assumptions and subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. Many of these assumptions are based on factors and events that are not within the control of Mountain Province and there is no assurance they will prove to be correct.

Factors that could cause actual results to vary materially from results anticipated by such forward-looking statements include variations in ore grade or recovery rates, changes in market conditions, changes in project parameters, mine sequencing; production rates; cash flow; risks relating to the availability and timeliness of permitting and governmental approvals; supply of, and demand for, diamonds; fluctuating commodity prices and currency exchange rates, the possibility of project cost overruns or unanticipated costs and expenses, labour disputes and other risks of the mining industry, failure of plant, equipment or processes to operate as anticipated.

These factors are discussed in greater detail in Mountain Province's most recent Annual Information Form and in the most recent MD&A filed on SEDAR, which also provide additional general assumptions in connection with these statements. Mountain Province cautions that the foregoing list of important factors is not exhaustive. Readers who base themselves on forward-looking statements should carefully consider the above factors as well as the uncertainties they represent and the risk they entail. Mountain Province believes that the expectations reflected in those forward-looking statements are reasonable, but no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this presentation should not be unduly relied upon. These statements speak only as of the date of this presentation.

Although Mountain Province has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Mountain Province undertakes no obligation to update forward-looking statements if circumstances or management’s estimates or opinions should change except as required by applicable securities laws. The reader is cautioned not to place undue reliance on forward-looking statements. Statements concerning mineral reserve and resource estimates may also be deemed to constitute forward-looking statements to the extent they involve estimates of the mineralization that will be encountered as the property is developed. Comparative market information is as of a date prior to the date of this document.

Further, Mountain Province may make changes to its business plans that could affect its results. The principal assets of Mountain Province are administered pursuant to a joint venture under which Mountain Province is not the operator. Mountain Province is exposed to actions taken or omissions made by the operator within its prerogative and/or determinations made by the joint venture under its terms. Such actions or omissions may impact the future performance of Mountain Province. Under its current note and revolving credit facilities Mountain Province is subject to certain limitations on its ability to pay dividends on common stock. The declaration of dividends is at the discretion of Mountain Province’s Board of Directors, subject to the limitations under the Company’s debt facilities, and will depend on Mountain Province’s financial results, cash requirements, future prospects, and other factors deemed relevant by the Board.

TSX: MPVD | NASDAQ: MPVD 2


ABOUT THE COMPANY


GAHCHO KUÉ

VICTOR

CANADA

Mountain Province is a Canadian company listed on the TSX andNASDAQ with approximately C$225m market capitalization.

The Company’s primary asset is its 49% interest in the Gahcho KuéDiamond Mine, a JV with De Beers Canada (51%), who also act as theoperator, located 300km northeast of Yellowknife in North WestTerritories of Canada.

Mountain Province also holds 100% of Kennady Diamonds, anadvanced diamond exploration project immediately adjacent to, andsurrounding, the Gahcho Kué site, with 3 identified kimberlites withapproximately 18.5M carats of diamonds in all resource categories.

• Open Pit Operation, comprised of 3 Kimberlite Pipes; 5034, South West Corridor, Hearne, and Tuzo

• Discovery of NEX and Wilson Kimberlites after commercial production

• C$1.1bn of construction and development capital to achieve commercial production (100% basis), completed on time and on budget

• Located at Kennady Lake, c. 280km northeast of Yellowknife

• Mine opened in September 2016 and commercial production was declared in March 2017

• Initial mine plan extends to FY 2028, recovering c. 50Mcts of diamonds (100% basis)

• Highly prospective land package within the JV land package and potential to find additional kimberlites near existing plant

• The Kennady North Project is located 280 kilometers east-northeast ofYellowknife, NT in the District of Mackenzie. The Kennady North projectconsists of 16 mineral leases and 58 mineral claims totaling 61,000hectares.

• These properties were acquired by MPV in early 2018 as part of theKennady Diamonds Inc. transaction

• Kelvin & Faraday Kimberlite Pipes with over 18 million carats of diamondsin all resource categories

• Highly prospective land package within 20 km radius of the GK Plant withnumerous potential targets for kimberlites

FLAGSHIP ASSET: GAHCHO KUÉ MINE JOINT VENTURE KENNADY NORTH PROJECTS AND GREENFIELD EXPLORATION


2019 FULL YEAR GUIDANCE


2018 FULL YEARACTUAL

2019 FULL YEARGUIDANCE

Total Tonnes ‘000s(ore & waste on100% basis)

41,444 43,000

Tonnes Treated ‘000s(100% basis)

3,194 3,300 – 3,400

Grade (cts/t) 2.17 1.9

Total Cts ‘000s(100% basis)

6,937 6,600 – 6,900

MPV Cts ‘000s(49% basis)

3,399 3,300 – 3,450

Cost per Tonne Treated($/tonne) $101 $110 - $115


LIFE OF MINE PLAN – BY ZONE


• Hearne South is a roughly circular pipe abundant with Tuffisitic Kimberlite Breccia

• Hearne North is a narrow elongate pipe abundant with Hypabyssal Kimberlite and Tuffisitic Kimberlite Breccia

• Recent drilling confirms kimberlite between the two pipes

• Mining commenced in Q2 2018

NI 4

3-10

1 (1

) Grade(cpt) 1.99 1.41 1.91 1.22

Production(Mct) 10.9 2.2 18.4 19.1

Life of mine CURRENT LIFE OF MINE EXTENDS TO 2028

• SWC is the extension of the 5034 Pipe towards Hearne

• Drilling completed on this zone has confirmed kimberlite which would have originally mined as waste in the original mine plan

• The first kimberlite discovered at Gahcho Kué and main ore body

• Abundant hypabyssal kimberlite

• Subdivided on the basis of internal geology into four lobes

• Extensions of kimberlite confirmed to the northeast and southwest not yet included in the mine plan

• Three zones heading to a depth of 300m

• Potential to further develop Tuzo Deep to extend the mine life

HEARNE Pipe South West Corridor 5034 Tuzo

Hearne

SWC

5034Tuzo

WilsonNEX


KENNADY NORTH PROJECTS – KELVIN & FARADAY


• Kennady acquisition completed in April 2018 through all-share transaction

• Kennady adds 13.62 million carats of indicated resources with the Kelvin kimberlite (8.50 million tonnes at 1.60cpt) and 5.02 million carats of inferred resources with the Faraday kimberlites (3.27 million tonnes at 1.54 cpt)1

• Strong expectations for substantial further resource addition with new kimberlite discoveries in the Kelvin-Faraday corridor

• Recently-completed microdiamond results for Faraday 2 north extension will greatly increase the inferred resource

• Memorandum of Understanding with De Beers outlines framework for potentially incorporating Kennady Project into Gahcho Kué joint venture

• The Kelvin-Faraday Corridor “KFC” is a NE-SW structural feature that includes the Faraday and Kelvin kimberlites, and the Gahcho Kué Mine

• Kennady Project consists of 22 mining leases and 58 mineral claims totaling 67,164 ha., located adjacent to and surrounding Gahcho Kué

• Five kimberlite bodies to date with three having resources (Kelvin, Faraday 1-3, Faraday 2)

1. See Technical Report filed on SEDAR by Kennady Diamonds Inc. titled “2017 Technical Report – Project Exploration Update and Faraday Inferred Mineral Resource Estimate – Kennady North Project – Northwest Territories, Canada”, with an effective date of November 16, 2017.


DIAMOND INDUSTRY FUNDAMENTALS


Long Term Diamond Jewelry Market Projections 20 Year Global Rough Diamond Production Forecast (2004 – 2023)

Source: Paul Zimnisky, paulzimnisky.com

271 3

40

645

87 108

173

40 52

110

2018 2 023 2035

IN BILLIONS USD

Total Jewelry Market Diamond Jewelry Market Fashion Jewelry Market

• Demand for Jewelry and diamonds is expected to nearly double in the next 15 years. (Chart on the left)

• Production of rough diamonds is expected to remain the same or decline over the next 3-5 years


INDUSTRY FUNDAMENTALS – LAB GROWN DIAMONDS


Lab – Created Diamond Price Relative to Natural Diamonds

Sample Prices of Lab – Created Diamonds Relative to Natural

Source: Paul Zimnisky, paulzimnisky.com

Prices Shown as of August 201987

108

173

1.74

3.24

8.65

2 0 1 8 2 0 2 3 2 0 3 5

Lab-created diamond % of Market

Diamond Jewelry Market

Total Diamond market forecast to 20351


PEER COMPARISON – 2020 Estimates


$74

$502

$2,131

$105 $121$75

$1,313

$68

$463

$1,697

$79 $128$76

$1,434

MountainProvince

Diamonds

Lucara Diamonds Gem Diamonds Stornoway Petra Diamonds Firestone Lucapa Diamonds

GLOBAL DIAMOND PRICES REALIZED in 2018 - 2019 ($USD/Carat)

2018

H1 2019

H1 2019 Median Price

YTD 2019 Median Price Realized for Listed Companies:

$US127 / carat


PEER COMPARISON – 2020 Estimates

TSX: MPVD | NASDAQ: MPVD 10Source: Research Provided by Panmure Gordon

51

35

18

(2)

2 3

(19)

MountainProvince

Lucara Gem Diamonds Lucapa Stornaway Firestone Petra

Free Cash Flow (USD million)

38%

17%

48%

1%

19% 18% 18%

MountainProvince


Operating Margin (%)

38%

49%

31%

24%

32%

18%

34%

MountainProvince


EBITDA (%)

87 100

74

6

53

11

172

MountainProvince


EBITDA (USD million)


MEDIUM TO LONG TERM STRATEGY


OPERATIONS• Continuous optimization at the GK Mine and Plant• Roll out new Life of Mine Plan• Explore and develop Kimberlites within the GK Mine JV

GROWTH• Exploration upside within the GK Joint Venture• Incorporating the Kelvin/Faraday resources into the GK Mine JV• Exploration of greenfield targets within 20km radius of the GK mine (fully owned

by MPV)

• Source based branding opportunities for Canadian Diamonds

BALANCE SHEET• Continuous debt reduction• Capital structure discipline


INVESTMENT THESIS


1. Top-tier, long life asset with globally significant scale

2. Leading industry margins driven by high grade ore and low operating costs

3. Mine located in a highly favorable jurisdiction

4. Beneficial Joint Venture agreement that maintains equal partner rights (1)

5. Independent sales and marketing rights

6. Attractive free cash flow profile

7. Positioned to benefit from long term attractive natural diamond industry fundamentals

8. Experienced management team

9. Attractive greenfield exploration portfolio within 20km radius of GK Mine

(1) With respect to material decisions relating to the Gahcho Kué Mine.


CORPORATE INFORMATION


C O R P O R A T E O F F I C E

161 Bay Street, Suite 1410

Toronto, ON M5J 2S1

Canada

Tel. +1 (416) 361-3562

W E B S I T E / E M A I L

www.mountainprovWince.com

[email protected]

TSX & NASDAQ: MPVD


A P P E N D I C E S



ASSET LOCATION


• Gahcho Kué is located in Canada’s Northwest Territories (“NWT”)• The NWT represents a mining friendly, politically stable jurisdiction; top

ranked across multiple factors

• NWT GDP of c. $3.7bn(1); the mining and oil and gas extraction industry is the largest contributor (c. 25%)

• Situated within a prolific kimberlite camp in close proximity to two other operating diamond mines (Diavik and Ekati)

• Mountain Province maintains strong relationships with the First Nations and local communities

OVERVIEW

Country Country

risk Sovereign

risk Currency

risk Banking

sector risk Political

risk Economic

structure risk

Canada AA AA A AA AAA A Australia A A A A AA BBB Botswana A A A BBB A BB India BB BBB BBB BB BBB BB Russia BB BB BB B CCC BB South Africa BB BB BB BB BBB B Tanzania BB BB BB B B B Angola CCC CCC CCC CC CCC CC Sierra Leone CCC CCC B CCC CCC CC

Fraser Institute’s Investment Attractiveness Index(2) ranks Canada amongst the best jurisdictions in the world

RANKING OF DIAMOND PRODUCING COUNTRIES PER THE ECONOMIST INTELLIGENCE UNIT

Kennady Diamonds

ASSET LOCATION

(1) Per NWT Bureau of Statistics.(2) Composite index that combines both the Policy Perception Index and results from the Best Practices Mineral Potential Index.

Country

Country risk

Sovereign risk

Currency risk

Banking sector risk

Political risk

Economic structure risk

Canada

AA

AA

A

AA

AAA

A

Australia

A

A

A

A

AA

BBB

Botswana

A

A

A

BBB

A

BB

India

BB

BBB

BBB

BB

BBB

BB

Russia

BB

BB

BB

B

CCC

BB

South Africa

BB

BB

BB

BB

BBB

B

Tanzania

BB

BB

BB

B

B

B

Angola

CCC

CCC

CCC

CC

CCC

CC

Sierra Leone

CCC

CCC

B

CCC

CCC

CC


GK MINE SITE PLAN AND INFRASTRUCTURE


6

7

8

21

3

45

1 Accommodation 4 Fuel storage 7 5034 pipe

2 Processing plant 5 Coarse processed kimberlite pile 8 Hearne pipe

3 Maintenance center 6 Tuzo pipe


FINANCIAL POSITION AND CAPITAL STRUCTURE


Financial position (CDN) at June 30th, 2019:

Cash $ 30.2 M

Net working capital $ 107.4 M

Secured notes payable $ 393.4 M

Shareholders’ equity $ 477.3 M

Current share capital:

Issued and outstanding 210.0 M

Fully diluted 214.0 M

Top Shareholders:

Vertigol Unlimited Company 29.75%

Blackrock 3.81%

Bank of Nova Scotia 2.44%

Tiedemann Advisors, LLC 2.05%

Mackenzie Financial Corp 1%


MINERAL RESOURCE AND RESERVE SUMMARY


8.5

3.3

13.6

5

1.6

1.54

0 5 10 15

Indicated

Inferred

MPV EXPLORATION PROPERTIES (EFFECTIVE DATE DEC 31, 2018)

Grade (cpt) Carats (Mct) Tonnes (Mt)

31.1

47.9

1.54

0 10 20 30 40 50 60

Probable

GK MINE JOINT VENTURE – 100% BASIS (EFFECTIVE DATE DEC 31, 2018)


1.8

12.1

2.5

17

1.41

1.4

0 5 10 15 20

Indicated

Inferred

RESOURCES (EXCLUSIVE OF RESERVES)



MINERAL RESOURCE AND RESERVE SUMMARY


Resources (Exclusive of Reserves)

Classification Tonnes (Mt) Carats (Mct) Grade (cpt)

5034 Indicated 1.4 2.1 1.49Inferred 0.4 1 2.09

Hearne Indicated 0.2 0.3 1.54Inferred 0.9 1.4 1.61

Tuzo Indicated 0.2 0.1 0.57Inferred 10.8 14.6 1.35

Summary Indicated 1.8 2.5 1.41Inferred 12.1 17 1.4

Stockpiles(6) Indicated 0 0 0Inferred 0 0 0

Reserves Classification Tonnes (Mt) Carats (Mct) Grade (cpt)

5034 Probable 9.1 17.4 1.91Hearne Probable 4.4 8.7 1.98Tuzo Probable 16.6 19.9 1.2Subtotal Probable 30.1 46 1.53Stockpile Probable 1 1.9 2.04Total Probable 31.1 47.9 1.54

Resources (Exclusive of Reserves)

Classification Tonnes (Mt) Carats (Mct) Grade (cpt)

TotalIndicated 8.5 13.6 1.6

Inferred 3.3 5.0 1.54

MPV Exploration Properties Kelvin and Faraday (Effective Date Dec 31, 2018)

Mineral Reserves and Resources, 100% Basis (Effective Date Dec 31, 2018)


GK MINE PRODUCTION PROFILE BY SIZE


SALES DATA BY VOLUME % SALES DATA BY $USD VALUE

4%7%

88%

> 2.5 carat 1 - 2.5 carat < 1 carat

53%

17%

31%

> 2.5 carat 1 - 2.5 carat < 1 carat


UPDATE ON LAB-CREATED DIAMONDS


De Beers Group enters the Lab Grown consumer market• De Beers Group surprised the industry back in May by entering the Lab Grown Diamond (LGD) sector.• De Beers Group was clear that they entered the market because they saw an opportunity that’s been missed by

existing LGD producers to provide LGDs in fashion jewelry.• Their research on the sector showed that consumers see LGDs as ‘fun, fashion accessories’ that are for more

casual occasions and their pricing should reflect this.• Unbeknownst to many, De Beers Group has been producing lab grown diamonds for more than 50 years through

their Element Six business unit, a world leading producer of LGDs, which one would believe should make them an instant competitor in the consumer space.

Consumer market• Lab Grown Diamond demand by consumers is very small, but growing, compared to the global demand for natural

diamonds.• The current global demand of LGDs is roughly 3% of the total diamond jewelry market. • Consumer research has shown that LGDs are not what people want for celebrating life’s great moments

(engagements, anniversaries, birth of a child etc.) – those are occasions where only a natural diamond will do.

Mass production• Consumers shouldn’t have to pay diamond prices for laboratory-grown products. Given the relatively low cost of

production, the fact that they are mass-produced (meaning they are neither unique nor finite), prices should be reflective of their value and of consumer expectations for what they should cost.

• Like any product created through a technological process, the price of LGDs will inevitably fall as technology continues to improve.

Core Priorities• For comparison: De Beers Group is investing $100M in their Lightbox Jewelry project.• Over the next 5-6 years, De Beers Group is investing more than $10B in their natural diamond business. (1) Source: Paul Zimnisky – paulzimnisky.com

Total Diamond market forecast to 20351

87108

173

1.74

3.24

8.65

2 0 1 8 2 0 2 3 2 0 3 5

Lab-created diamond % of Market

Diamond Jewelry Market


OVERVIEW OF 5034 PIPE



OVERVIEW OF TUZO PIPE



KELVIN AND FARADAY PIPES


Faraday 2 Faraday 1 & 3 Kelvin

Inferred Resource of:• 1.39 million tonnes• 2.24 carats per tonne• 3.13 million carats• US$112 per carat

Inferred Resource of:• 1.87 million tonnes• 1.01 carats per tonne• 1.90 million carats• US$75 per carat

Indicated Resource of:• 8.50 million tonnes• 1.60 carats per tonne• 13.62 million carats• US$63 per carat


DISCLOSURE OF TECHNICAL INFORMATION


Qualified Person

Technical information included in this presentation regarding the Company’s mineral property has been reviewed by Keyvan Salehi, P.Eng., MBA, a Qualified Person as defined by National Instrument 43-101 – Standard of Disclosure for Mineral Properties (“NI 43-101”). All material technical information included herein has previously been disclosed by the Company, and the reader is particularly directed to the Company’s most recently filed AIF and U.S. Form 40-F and its most recently filed interim and annual financial reports; as well as the remaining filings completing Company’s continuous disclosure records. Those records include the technical report dated March 16, 2018 titled “Gahcho Kué Mine, NI 43-101 Technical Report, NWT, Canada” (with an effective date of December 31, 2017).

Cautionary Note to U.S. Investors Regarding Mineral Reserve and Resource Estimates

The Company is subject to the reporting requirements of applicable Canadian securities laws and, as a result, reports its mineral reserve and mineral resource estimates as well as other scientific or technical information regarding its mineral properties in accordance with Canadian reporting requirements. Canadian reporting requirements for disclosure of mineral properties are governed by NI 43-101. As a result, information contained in this presentation containing descriptions of the Company’s mineral properties or estimates of mineral reserves or mineral resources is not comparable to similar information generally disclosed by U.S. companies in reports filed with the SEC, which are governed by the SEC’s Industry Guide 7 (“Guide 7”). These reporting standards have similar goals in terms of conveying an appropriate level of confidence in the disclosures being reported, but embody different approaches and definitions. For example, under Guide 7 mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization can be economically and legally produced or extracted at the time such reserve determination is made. “Probable reserves” disclosed in this presentation and reported in compliance with NI 43-101 may differ in certain material respects from “probable reserves” reported in compliance with Guide 7. Also disclosed in this presentation are estimates of “inferred resources” reported in compliance with NI 43-101. While the terms “mineral resource” and “inferred resource” are recognized by NI 43-101, they are not defined terms under standards of the SEC and, generally, U.S. companies are not permitted to report estimates of mineral resources of any category in documents filed with the SEC. As such, certain information contained in this presentation concerning descriptions of mineralization and estimates of mineral reserves and mineral resources under Canadian standards is not comparable to similar information disclosed by U.S. companies subject to the reporting requirements of the SEC. The reader should not assume that all or any part of a mineral resource will ever be converted into mineral reserves. The reader is also cautioned not to assume that all or any part of an inferred resource exists, or is economically or legally mineable. Further, an inferred resource has a great amount of uncertainty as to its existence and as to its economic and legal feasibility, and a reader cannot assume that all or any part of an inferred resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred resources may not form the basis of feasibility or other economic studies.

Slide Number 1FORWARD LOOKING STATEMENTABOUT THE COMPANY2019 FULL YEAR GUIDANCELIFE OF MINE PLAN – BY ZONEKENNADY NORTH PROJECTS – KELVIN & FARADAYDIAMOND INDUSTRY FUNDAMENTALSINDUSTRY FUNDAMENTALS – LAB GROWN DIAMONDSPEER COMPARISON – 2020 EstimatesPEER COMPARISON – 2020 EstimatesMEDIUM TO LONG TERM STRATEGYINVESTMENT THESISCORPORATE INFORMATIONAPPENDICESASSET LOCATIONGK MINE SITE PLAN AND INFRASTRUCTUREFINANCIAL POSITION AND CAPITAL STRUCTUREMINERAL RESOURCE AND RESERVE SUMMARYMINERAL RESOURCE AND RESERVE SUMMARYGK MINE PRODUCTION PROFILE BY SIZEUPDATE ON LAB-CREATED DIAMONDSOVERVIEW OF 5034 PIPEOVERVIEW OF 5034 PIPEOVERVIEW OF TUZO PIPEKELVIN AND FARADAY PIPESDISCLOSURE OF TECHNICAL INFORMATION

corporate presentation sept 2019filecache.investorroom.com/mr5ircnw_mountainprovince/1337/mountain...

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