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Mountain Province Diamonds Inc T.MPVD

Alternate Symbol(s):  MPVDF

Mountain Province Diamonds Inc. is a Canada-based diamond company. The Company’s primary asset is its 49% interest in the Gahcho Kue Mine, a Joint Venture with De Beers Canada. The Gahcho Kue Joint Venture property consists of several kimberlites that are actively being mined, developed, and explored for future development. The Company’s Kennady North Project includes approximately 113,000 hectares of claims and leases surrounding the Gahcho Kue Mine that include an indicated mineral resource for the Kelvin kimberlite and inferred mineral resources for the Faraday kimberlites. Kelvin is estimated to contain 13.62 million carats (Mct) at 8.50 million tons (Mt) at a grade of 1.60 carats/ton and a value of US$63/carat. Faraday 2 is estimated to contain 5.45Mct in 2.07Mt at a grade of 2.63 carats/ton and a value of US$140/ct. Faraday 1-3 is estimated to contain 1.90Mct to 1.87Mt at a grade of 1.04 carats/ton and a value of US$75/carat.


TSX:MPVD - Post by User

Comment by lilbirdieon Jul 04, 2008 1:52am
323 Views
Post# 15256532

RE: debeers got Winspear for....

RE: debeers got Winspear for....Hammerbit et al:

You are making me dig a long ways back in my notes BUT here it is:

News of Aug. 27/00 De Beers announces it has successfully secured over 90% of the shares (of Winspear) in its bid to buy Winspear's 67.76% in Snap Lake for $301 MM CDN ($203MM USD's).

News of Feb. 01/01 Aber reports completion of  the SALE of its 32.24% of Snap Lake for $171 MM CDN ($114MM USD's).

Doing a bit of math here, based on the Winspear BUYOUT, 100% of Snap Lake was worth $301MM/67.76% = $444.21M CDN

Based on the Aber BUYOUT, 100% of Snap Lake was worth $171MM/32.24% = $530.40MM CDN

Interestingly enough, $530.40/$444.21 = 1.19. This means than De Beers paid close to a 20% PREMIUM to buyout the MINORITY Aber share.

In an article carried by the National Post of August 11/08 or thereabouts probably with reference to a News Release from Winspear on August 10/00,  the "updated Resource Study" by MRDI Canada Ltd. pegged the Indicated, Inferrred and Total Resource numbers as follows:

Indicated Resources : 21.6MM tonnes with 41.1MM Carats (1.90 c/t)

Unferred Resources: 24.0MM tonnes with 45.3 MMt Carats (1.89 c/t)

TOTAL Resources: 45.6MM tonnes with 86.4 MM Carats

USING the 100% IMPLIED Snap Lake BUYOUT Price of $444.21MM CDN based on the Actual Winspear SALE Price of $301MM CDN, this puts the $/ct for the Total Resource of 86.4 MM carats at a BUYOUT Price of $5.14 CDN/carat

USING the 100% IMPLIED Snap Lake BUYOUT Price of $530.40MM CDN based on the Actual Aber SALE Price of $171MM CDN, this put the $/ct for the Total Resource of 86.4 carats at a BUYOUT Price of $6.14 CDN/carat.

The average appraised value for the Snap Lake diamonds was about $118/ct.

So the "VALUE IN THE GROUND" which ranges from $5.14/ct to $6.14/ct is LESS than 10% of the appraised value of $118/ct.

Of course if you applied the IMPLIED BUYOUT Price to ONLY the INDICATED 41.1MM carats the Price/Carat would range from $10.81/carat to $12.90/ct

With escalating value of rough in the past couple of years and an expectation that this appreciation will continue plus a population of large valuable stones, I wouldn't be surprised if $10 - $15/ct (or even somewhat higher)would be closer to the mark in determining the "Value In The Ground" of the Gahcho Kue Deposit using the TOTAL of Indicated + Inferred.

Feel free to check and verify the information as presented above from sources that you may have and do your own calculations.

Cheers,

LB




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