from will purcell
Patrick Evans's Mountain Province Diamonds Inc. (MPV) fell 19 cents to $5.41 on 441,000 shares on word it has sold 20 million shares at $5 in two concurrent placements, raising $100-million. The company's major shareholder, Dermot Desmond, is buying five million shares. The rest will go to a syndicate of underwriters on a bought-deal basis. The company had $60-million at the end of June but it is going quickly. Mountain Province is facing increasing cash calls from De Beers Canada to cover its 49-per-cent share of construction costs at Gahcho Kue, 250 kilometres northeast of Yellowknife. The mine was projected to cost $1.02-billion in a feasibility study updated in May, so Mountain Province will be needing considerably more cash. Fortunately, Mr. Evans, CEO since 2007, already has a line on much of it. He appointed three major banks to arrange and underwrite up to $370-million in term loans in late July and promises that the due diligence investigation and required paperwork will be complete by the end of the year. It is a frantic schedule for a junior company -- just ask Matt Manson, who needed 18 months to arrange a $945-million financing so Stornoway Diamond Corp. (SWY: $0.60) could start work this year on its $850-million Renard mine. Of course, Mr. Evans has the advantage of having De Beers as a co-venturer; Mr. Manson is going it alone. As well, Mr. Evans is one of the most effective stock promoters in the business, perhaps because he was once a South African diplomat -- in many ways a similar profession. Mr. Evans's Kennady Diamonds Inc. (KDI) gained three cents to $7.83 on 1,000 shares after it quickly closed its placement of 769,500 shares at $6.50, raising $5-million to speed up work at the rich Kelvin and Faraday kimberlite complex, 10 kilometres northeast of Gahcho Kue. The quick sale bolsters Mr. Evans's reputation further but once again, Mr. Desmond, a shrewd Irish billionaire who made his fortune through offbeat but timely investments, deserves much of the credit: his Bottin International Investments Ltd. bought $3.5-million of the shares. (Mr. Desmond, once a banker and then a broker, has invested in hotels, professional soccer and international gambling. He also made millions in the dot-com sector before there was a dot-com sector, but his most celebrated move was buying the foundering London City Airport for $50-million in 1995 and selling it 11 years later for about $1.5-billion.) Mr. Desmond is revered by Mr. Evans's shareholders as one of the "Three Irish Guys," but he is the only Irish guy who matters. He first fell for Canadian diamonds in the mid-1990s and has bankrolled Mountain Province and its Kennady spin-off ever since. So far, it has been a mutually pleasing arrangement.