Last updated on April 18, 2014 at 15:44 EDT

Mountain Province Diamonds Announces $31.3M Initial Gahcho Kue Capital Program

May 28, 2012
        --  Final court approval received for Kennady North Spin-out

        --  Kennady North drill program set to commence

        --  Gahcho Kué diamond prices increase marginally

Shares Issued and Outstanding: 80,715,558

TORONTO AND NEW YORK, May 28, 2012 /PRNewswire/ – Mountain Province Diamonds
Inc. (“Mountain Province”, the “Company”) (TSX: MPV, NYSE MKT: MDM)
today announced that the Gahcho Kué Joint Venture partners, De Beers
Canada Inc. (“De Beers”) and Mountain Province, have approved the
initial capital to advance the Gahcho Kué diamond mine at Kennady Lake
in Canada’s Northwest Territories in preparation for development.

The C$31.3M budget (C$21.3M for 2012 and C$10M for Q1, 2013) will focus
on advancing:

      1. Preparation work for the construction and operating permit
      2. Front-end engineering and design (FEED);
      3. Preparations and procurement for the 2013 winter road;
      4. Detailed engineering;
      5. Purchase of critical long-lead equipment; and
      6. Feasibility study update

Commenting, Mountain Province CEO Patrick Evans said: “Permitting of the
Gahcho Kué diamond mine continues to progress satisfactorily. This has
provided the joint venture partners with sufficient confidence to
continue to progress the Gahcho Kué project according to schedule”.

The Technical Sessions of the Environmental Impact Review (EIR), which
were intended to resolve as many technical issues as possible prior to
the public hearings, took place in Yellowknife from May 22 to May 25,
2012 and concluded successfully. The EIR continues to progress in
accordance with the work plan established by the Mackenzie Valley
Environmental Impact Review Board (MVEIRB) with the closure of the
public record under the EIR expected prior to the end of 2012.
Shareholders are reminded that they can follow the EIR progress on the
website of the MVEIRB at www.reviewboard.ca.

In addition, final court approval for the planned spin-out of the
Kennady North project was received on April 30, 2012, and the Company
is currently awaiting final regulatory approval for the planned listing
of Kennady Diamonds Inc. on the TSX-V. A further announcement on the
record and effective dates is expected to be made shortly.

Preparations have been made for the commencement of the first phase of
the planned Kennady North drill program, which will commence as soon as
the Company receives its land use permit. Mountain Province is pleased
to have received the support of the Lutsel K’e Dene First Nation for
the Kennady North land use permit application and expects the permit
will be issued prior the end of Q2, 2012.

Plans are in place for two drill rigs to be mobilized to Kennady North
with the first rig focussed on in-fill drilling along the Kelvin -
Faraday kimberlite corridor, where a number of high priority drill
targets have been identified. The second drill rig will test
approximately twelve newly discovered kimberlite targets that are
accessible during summer. The remainder of the high priority targets
will be tested during a second phase winter drill program which will be
conducted in early 2013.

Patrick Evans added: “Our priority at Kennady North is to define a
resource along the Kelvin – Faraday kimberlite corridor, while also
testing a number of newly discovered high priority geophysical targets
which correspond with unexplained kimberlite mineral trains not
associated with the known kimberlites at Kennady North. We are very
excited about the planned Kennady North exploration program and are
also keen to commence drilling of the newly discovered geophysical
targets at the De Beers JV.”

Final analysis of the data from the Fugro airborne gravity gradiometry
(AGG) survey over the De Beers JV leases has resulted in the
identification of 55 geophysical targets of which 23 are interpreted as
high priority. The JV partners are expected to announce a follow-up
exploration program in the near future.

Finally, the Company commissioned an updated independent valuation of
the diamonds recovered from the Gahcho Kué project. The valuation was
conducted by WWW International Diamonds Consultants Ltd. and is based
on the WWW Price Book as at March 7, 2012. The updated valuation
indicates that the valuation of the Gahcho Kué diamonds increased
marginally from April 2011 to March 2012 with the actual value per
carat increasing by approximately 1 percent from $185 to $186. The
modeled values also remained essentially unchanged.

Mountain Province Diamonds is a 49% participant with De Beers Canada in the Gahcho Kué JV located
at Kennady Lake in Canada’s Northwest Territories. The Gahcho Kué
Project consists of a cluster of four diamondiferous kimberlites, three
of which have a probable mineral reserve of 31.3 million tonnes grading
1.57 carats per tonne for total diamond content of 49 million carats.

Gahcho Kué is the world’s largest and highest grade new diamond
development project. A December 2010 feasibility study filed by
Mountain Province (available on SEDAR) indicates that the Gahcho Kué
project has an IRR of 33.9%.

Mountain Province also controls 100% of the Kennady North Diamond Project comprising thirteen leases and claims immediately to adjacent to the De
Beers JV property. The 123.6 square kilometer Kennady North Project
hosts three known diamondiferous kimberlites and a number of
unexplained kimberlite mineral indicators.

Qualified Person
This news release has been prepared under the supervision of Carl G.
Verley, P.Geo., who serves as the qualified person under National
Instrument 43-101.

Forward-Looking Statements
This news release may contain forward-looking statements, within the
meaning of the “safe-harbor” provision of the Private Securities
Litigation Reform Act of 1995, regarding the Company’s business or
financial condition. Actual results could differ materially from those
described in this news release as a result of numerous factors, some of
which are outside the control of the Company.

SOURCE Mountain Province Diamonds Inc.

Source: PR Newswire