TORONTO (miningweekly.com) – Toronto-based Mountain Province Diamonds will raise C$5-million to fund a feasibility study at its Gahcho Kué project, in Canada's Northwestern Territories, the junior announced on Wednesday.

The firm has entered into an agreement with a syndicate of underwriters, led by Paradigm Capital, Salman Partners and Scotia Capital, which will sell 1,85-million units, each comprising one common share and one half of a share-purchase warrant.

The units have been priced at C$2,70 each, and Mountain Province has given the underwriters an option to buy up to another 15% of the offering, which is expected to close on or about December 8.

The company will use the proceeds to complete a feasibility study on Gahcho Kué, which it owns with diamond miner De Beers, and for general working capital purposes.

Gahcho Kue is 51% owned by De Beers Canada and 49% by TSX- and Amex-listed Mountain Province.

The smaller firm announced in September that JDS Energy and Mining had been hired to do the study, which was expected to take about 12 months and cost C$10-million.

The Gahcho Kué project has an indicated resource of 30,2-million tons, grading 1,67 ct/t, for about 50,5-million carats, and plus 6-million tons in the inferred category, grading at 1,73 ct/t, for around 10,3-million carats.

In July, De Beers Canada and Mountain Province agreed to revise their joint venture – De Beers had been sole funding work on the project, as part of an earn-in agreement, but the ownership split will now stay at current levels, and the partners will fund their respective share of spending.

Shares in Mountain Province slid 6,8% on Wednesday, to C$2,59 apiece by 14:38 in Toronto.