Mountain Province Diamonds Inc.
TSX : MPV
AMEX : MDM

Mountain Province Diamonds Inc.

January 12, 2006 09:01 ET

Mountain Province Provides Update on Gahcho Kue Diamond Project

TORONTO, ONTARIO--(CCNMatthews - Jan. 12, 2006) -

Winter drill program expected to increase resource confidence

Mountain Province Diamonds Inc. (TSX:MPV)(AMEX:MDM) (the "Company") today announced details of the 2005/6 winter drill program at the Gahcho Kue Diamond Project in Canada's Northwest Territories. The focus of the program, which is being managed by the project operator De Beers Canada, is to:

1. Upgrade the diamond resource of the north lobe of the 5034 kimberlite pipe to the indicated category;

2. Improve the Joint Venture's understanding of the grade and diamond value of the Tuzo kimberlite pipe;

3. Collect sufficient data to support a definitive feasibility study; and

4. Establish the overall potential upside of the project.

A core drilling program, consisting of 42 holes totaling 11,300 meters, commenced in early December with two core drill rigs. The focus of this program is to:

1. Further delineate the kimberlite ore bodies in those areas where there is insufficient data;

2. Obtain additional micro diamond data;

3. Pilot the seven planned large diameter drill holes;

4. Drill geotechnical holes for construction designs; and

5. Drill geotechnical holes for final mine design.

The core drilling program is expected to be completed during the second quarter of 2006.

Two large diameter (24-inch) drill rigs are also being mobilized to the project site. One of the large diameter rigs will drill collars through the granite overburden and the other will take bulk samples. Current plans are to drill six large diameter holes into the north lobe of the 5034 kimberlite pipe and one large diameter hole into the Tuzo kimberlite pipe. This program is expected to commence during February 2006.

Commenting, Mountain Province Diamonds President and CEO Patrick Evans said: "The winter drill program is expected to deliver important data on the north lobe of the 5034 kimberlite as well as the Tuzo kimberlite, which will improve our confidence in the Gahcho Kue project. Furthermore, critical data required for the final mine design will be gathered. With an estimated annual production of three million carats over 15 years, we believe Gahcho Kue will become one of Canada's major diamond mines."

The Gahcho Kue diamond project is a joint venture between Mountain Province Diamonds Inc. (44.1%), De Beers Canada (51%) and Camphor Ventures (4.9%) and is located at Kennady Lake in the Northwest Territories, approximately 300 kilometers northeast of Yellowknife. It is 90 kilometers east of Snap Lake, where De Beers' first Canadian diamond mine is currently under construction.

As currently proposed, the Gahcho Kue project will be an open pit mine. Capital costs to construct the mine are estimated at C$ 825 million. It will employ up to 600 people during the peak of its three-year construction period and close to 400 people during the operations phase of the mine. Based on the current resource, the project is expected to have a life of 20 years from start of construction to closure and will produce an average of three million carats annually over 15 years of operations.

Mountain Province Diamonds Inc has provided the following project summary:



---------------------------------------------------------------------
Pipe Resource Tonnes Carats Grade Average Value
Category (cpht)(1) (US$/ct)(2)
---------------------------------------------------------------------
5034 Indicated 8,715,000 13,943,000 160 $82.00
Inferred 4,921,000 8,366,000 170 $90.00
---------------------------------------------------------------------
Hearne Indicated 5,678,000 9,676,000 170 $70.00
Inferred 1,546,000 2,373,000 153 $70.00
---------------------------------------------------------------------
Tuzo Inferred 10,550,000 12,152,000 115 $57.00
---------------------------------------------------------------------
Summary Indicated 14,392,000 23,619,000 164 $77.00
Inferred 17,017,000 22,890,000 135 $70.00
---------------------------------------------------------------------


1. Resource cut-off is 1.5mm

2. June 2005 DTC Price Book in US$

Qualified Person

This press 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 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.

Shares Issued and Outstanding: 52,790,847

Contact Information

  • Mountain Province Diamonds Inc.
    Patrick Evans
    President and CEO
    416-361-6176
    www.mountainprovince.com
    or
    BarnesMcInerney Inc.
    Capital Market Communications
    Tanis Robinson - Senior Account Executive
    416-367-5000 ext. 252