Mountain Province Diamonds Inc. (MPVD) Earnings Call Transcript & Summary

Hello, and welcome to the Special Meeting of Stockholders of Mountain Province Diamonds. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Mark Wall, President and CEO of Mountain Province Diamonds. The floor is yours.

Thank you. Good morning, and welcome to the Special Meeting of Shareholders of Mountain Province Diamonds. My name is Mark Wall, and I'm the President and CEO of Mountain Province and a member of the Board of Directors. With the permission of the meeting, I will act as Chair of this meeting. With the consent of the meeting, I will ask Mr. Steven Thomas, the Secretary, Vice President, Finance and Chief Financial Officer of the corporation, to act as secretary of this meeting. In accordance with current public health guidelines surrounding the COVID-19 pandemic, Mountain Province Diamonds call today's meeting in a virtual format, in which we are currently convened. As this meeting is held virtually via live webcast, I would like to set out a few rules for the orderly conduct of the meeting. Firstly, questions in respect for the motion can be submitted to our moderator by any registered shareholder or duly appointed proxy holder using the messaging service of the virtual interface. Secondly, when asking a question please indicate which entity you represent, if any, and confirm that you are a registered shareholder or duly appointed proxy holder. Third, for the purposes of the meeting today, voting on all matters will be conducted by electronic ballot. Registered shareholders and duly appointed proxy holders will be asked to vote on the sole business item after the presentation of the same. Fourth, when you're asked to vote, you will receive a message on the virtual interface requesting you to register your votes. You will only have a certain amount of time to do so when the polls are open. Before we commence, I would like to introduce the directors and senior management of Mountain Province Diamonds who are present virtually at this meeting. The directors present other than myself, are Dean Chambers, Karen Goracke, Daniel Johnson and Ken Robertson. The other members of management present are Steven Thomas, Vice President of Finance, Chief Financial Officer and Secretary; Dr. April Haywood, Chief Sustainability Officer; Matt Macphail, Chief Technical Officer; Dr. Tom McCandless, Vice President and Head of Exploration; and Reid Mackie, Vice President and Head of Diamond Marketing. Following the formalities, we will take any questions anyone may have. I ask that the meeting come to order. In order to make best use of our time and expedite the formal portion of this meeting, we have asked certain shareholders or proxy holders to move and second the formal motions. Scrutineers, with the consent of the meeting, Roxanne Parsaud of Computershare is hereby appointed as scrutineer to report on the shareholders attending the meeting and the number of shares represented at this meeting or by proxy at this meeting and any adjournment hereof and to compute the votes of any poll taken at this meeting and any adjournment hereof and to report thereon to me on these matters. The notice calling this meeting and a form of proxy were mailed to all registered shareholders in accordance with the National Instrument 54-101 of the Canadian Securities Administrators. The affidavit of mailing has been duly filed, and I direct the affidavit to be attached to the minutes of this meeting as a schedule. A quorum for the transaction of business at the meeting of shareholders is at least 2 persons present in person or virtually, each being a shareholder entitled to vote at the meeting or a duly appointed proxy or representative for an absent shareholder so entitled. Scrutineer, can you please confirm a quorum.

Yes, I confirm quorum.

The scrutineers report -- thanks, Ruby, shows a quorum to be present, and I, therefore, declare the meeting to be regularly constituted. I direct that the report of the scrutineer be annexed to the minutes of this meeting as a schedule. Dean Chambers and I will now briefly describe the rationale for the resolutions before us today. In light of the maturity of Mountain Province existing USD 25 million revolving credit facility on March 31, 2022, the maturity of the corporation's 8% senior secured second lien notes due on December 15, 2022, and the corporation's operational cash flow needs, the Board determined it would be in the best interest of the corporation to review, evaluate and consider options to improve its capital structure and its short- and long-term liquidity, including by way of restructuring or refinancing of its outstanding indebtedness. At a meeting of the Board of Directors held on November 9, 2021, the Board established a special committee of independent directors for this purpose. Dean Chambers is the Chair of the Special Committee, and I will now turn it over to Dean to discuss the special committee's process in connection with the proposed transactions shareholders are considering today. Dean?

Thank you, Mark, and thank you to all shareholders and proxy holders for joining today. As Mark mentioned, the special committee was established in November of last year, in connection with the consideration and oversight of a potential debt refinancing transaction as well as any other potential alternative transactions that may be identified to address the corporation's short- and long-term financial liquidity needs. The special committee is comprised of directors who are disinterested in the proposed transactions being considered by the corporation shareholders today and independent for the purposes of corporate and securities laws. In December 2021, the corporation received a proposal for a new USD 50 million junior secured term loan credit facility from a company ultimately beneficially owned by its largest shareholder, Mr. Dermot Desmond. In accordance with its mandate, the special committee oversaw the negotiation and execution by the corporation of a nonbinding term sheet, setting up the terms of the proposed loan agreement, including as partial consideration, therefore, the issuance of warrants to purchase up to 41 million common shares of the corporation on the terms described in the management information circular. The special committee has formally met 10 times in connection with its evaluation and oversight of the proposed transactions. The special committee was advised by independent legal and financial advisers and considered the factors and potential risks associated with the proposed transaction set out in the management information circular. The special committee reviewed and considered the proposed transactions and giving due consideration to the best interest of the corporation and the impact on shareholders and the corporation's other stakeholders, unanimously concluded that the proposed transactions are in the best interest of the corporation. Accordingly, on February 1, 2022, the special committee and ultimately all nonconflicted directors approve the proposed transactions and resolved to put the proposed transactions before the corporation shareholders other than those affiliated with Mr. Desmond for their approval at this meeting as required by the rules of the TSX. Subject to obtaining the required approval of the shareholders here today, the final form of the definitive documents in respect of the proposed transactions will be approved by the special committee. Mark and on behalf of the special committee, I will be happy to address any questions later in the meeting. I will now turn it back over to Mark to attend to the formal business of the meeting.

Thanks, Dean. The first and only item of business is the approval of the entry into the USD 50 million junior term loan credit facility and the related issuance of warrants to purchase up to 41 million common shares of the corporation. May I have a motion to approve the proposed transactions, resolution set out in Schedule A to the Management Information Circular.

Mr. Chair, I move that the proposed transactions resolution set out in Schedule A to the Management Information Circular be approved.

Do I have a seconder for this.

Mr. Chair, I second the motion.

Thanks, Karen. As we mentioned, voting today will be conducted by electronic ballot. I will now take a moment to ask that the balloting be opened to registered holders and appointed proxy holders. The polls are now open, and at this point, all registered holders and proxy holders who have properly logged in with their control numbers or invitation code and wish to vote will be able to see on the screen all motions being brought forth at this meeting. At this point, shareholders and duly appointed proxy holders, that is, anyone who logged on with a control number or invitation code will see their screen change to show the proposals and they cast their votes accordingly. Please register your votes by accessing the voting page and selecting the For or Against buttons next to the motion to approve the entry into the junior term loan credit facility and the issuance of warrants. We will provide registered shareholders and duly appointed proxy holders approximately 1 more minute to complete the electronic ballot. Once the electronic balloting closes, the voting page will disappear, and your votes will automatically be submitted. [Voting]

The balloting is now closed. I've been advised by the scrutineers that the proxies deposited for the meeting have been voted in favor of the resolutions presented. The entry into the term loan agreement and the issuance of warrants has been approved. I direct that the final results of the poll be included with the minutes of this meeting, and the results of the voting will be announced in a press release in accordance with the policies of the Toronto Stock Exchange. The formal items of business as set out in the notice of meeting have now been dealt with. I move and second that this meeting now terminate. As there is no further business to come before the meeting, I declare the formal part of the meeting to be concluded. We will now take any questions that shareholders may have. [Operator Instructions]

At this time, there are no questions.

It appears there are no further questions. With that, I will close the meeting. Thank you all for your time and attention.

This concludes the meeting. You may now disconnect and have a nice day.