Gahcho Ku winter drilling adds optimism

Vancouver – Mountain Province Diamonds (MPV-T, MDM-X) and De Beers Canada have wrapped up winter drilling on the Tuzo kimberlite pipe at its Gahcho Ku diamond property located about 300 km northeast of Yellowknife in the Northwest Territories. The joint venture project is held 51% by De Beers, 44.1% by Mountain Province and 4.9% Camphor Ventures (CFV-V, CMVIF-O).

Initial results from the winter program indicates the Tuzo kimberlite pipe flares substantially at depth with 4 of the 6 deeper holes (about 400 metres) ending in kimberlite and indicating a potentially significant increase in tonnage.

Designed to further define volume, geology, dilution, density and grade of Tuzo, the program also looked to upgrade the resource that stands at 10.55 million inferred tonnes averaging 1.15 carats per tonne with a modeled value of US$57.00 per carat.

Winter drilling consisted of more than 8,400 metres in 26 core holes based on a 35-metre grid pattern over the Tuzo pipe.

Additionally, five holes were also completed between the North and East Lobes of the 5034 pipe on the project successfully confirming kimberlite continuity between them at a depth of about 150 metres. With verification of the kimberlite between the two lobes, the joint venture partners have an increased confidence to apply the diamond revenue model from the 5034 East Lobe (that is in the indicated resource category) to the North Lobe using a much smaller diamond parcel.

The JV plans a large diameter (5.75-inch) core drilling program on 5034 North Lobe this summer to extract about 60 tonnes of kimberlite hopefully returning a 100-carat diamond sample for its revenue modeling. Several holes totaling about 1,500 metres are expected to be sufficient for the program that is also planned to upgrade the North Lobe resource to the indicated category.

In February 2007 Mountain Province tabled a takeover bid for Camphor Ventures and it recently reports holding more than 93% of its shares. The company has launched for compulsory acquisition of the remaining shares at which point it will hold 49% interest in the Gahcho Ku joint venture.

De Beers, which is project operator, can be called to fund the project through to commercial production. Upon funding a feasibility study De Beers will increase its interest to 55% and can gain an additional 5% if Mountain Province asks it to fully fund mine construction.

The Gahcho Ku development project is comprised of three main kimberlite pipes (5034, Hearne and Tuzo) hosting a combined indicated resource of 14.4 million tonnes grading 1.64 carats per tonne with a modeled value of US$77.00 per carat. The pipes contain a further 17 million inferred tonnes at 1.35 carats per tonnes with a modeled value of US$70.00 per carat.

The project, currently in the permitting phase, is undergoing advanced-stage, pre-development exploration. Planned development foresees a full diamond production rate of about 3-million carats annually over 15 years and it is scheduled to commence in 2011. Operating costs of $65 per tonne are forecast for the open pit mine with capital expenditures of about $825 million tabled.

Shares of Mountain Province have recently traded at the $5.00-level and have a 52-week trading range of $3.05-to-$5.25.


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