Lenders Grant Waiver to Mountain Province

RAPAPORT… Mountain Province has obtained a waiver for its revolving-loan agreement as it struggles with challenges in the diamond market amid the coronavirus pandemic.

The Bank of Nova Scotia and Nedbank, which hold the loan, have agreed to exempt the Canadian miner from complying with the terms of the credit agreement, including maintaining a minimum cash balance, Mountain Province said Tuesday. The company, which owns the Gahcho Kué mine together with De Beers, will also be released from performing the total-net-worth tests that it would normally be obliged to satisfy under the loan-facility agreement.

To secure the waiver, Mountain Province has agreed that the banks will lower the size of its revolving credit facility to $25 million from the original $50 million. The miner will also be required to report weekly to its lenders, fulfill certain terms regarding the sale of its diamonds, and limit payment of any bonuses or incentives. In addition, it will need permission to secure any further debt or sell any of its assets.

At the same time, Mountain Province will have to maintain certain levels of cash flow, it said. The company will need to show it has progressed in its performance by August 31 and that it will be able to repay the loan by September 30.

The miner is currently in negotiations with its major shareholders and other banks to try to secure loans to help it repay its current lenders, it added.


Image: The Gahcho Kué mine. (Mountain Province)