UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 40-F
or
[ X ] Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
| For the fiscal year ended |
Commission File Number: |
(Exact name of registrant as specified in its charter
)
N/A
(Translation of Registrant’s name into English (if applicable))
(Province or other jurisdiction of incorporation or organization)
1499
(Primary Standard Industrial Classification Code Number (if applicable))
N/A
(I.R.S. Employer Identification Number (if applicable))
Tel: 416 361 3562
(Address and telephone number of Registrant’s principal executive offices)
Tel: 888 705 7274
(Name, address (including zip code) and telephone number (including area code)
of agent for service in the United States)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
None
Securities registered or to be registered pursuant to Section 12(g) of the Act.
Common Shares
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
(Title of Class)
For annual reports, indicate by check mark the information filed with this Form:
[ |
[ |
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
The number of common shares of the issuer outstanding as of December 31, 2021 was 210,697,474 .
Indicate by check mark whether the Registrant by filing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule
12g3-2(b)
under the Securities Exchange Act of 1934 (the “Exchange Act”). If “Yes” is marked, indicate the filing number assigned to the Registrant in connection with such Rule. | Yes [ ] | NO [X] |
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
| NO [ ] |
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). | NO [ ] |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule
12b-2
of the Exchange Act. Emerging growth company [ ]
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report: [X]
Auditor Name: |
Auditor Location: |
Auditor Firm ID: |
2
EXPLANATORY NOTE
Mountain Province Diamonds Inc. (the “Registrant) is a Canadian issuer eligible to file its annual report pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on Form
”
40-F
pursuant to the multi-jurisdictional disclosure system of the Exchange Act. The Registrant is a “foreign private issuer” as defined in Rule 3b-4
under the Exchange Act. Equity securities of the Registrant are accordingly exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act pursuant to Rule 3a12-3.
NOTICE TO UNITED STATES READERS
DIFFERENCES IN UNITED STATES AND CANADIAN REPORTING PRACTICES
The Registrant is permitted, under the multi-jurisdictional disclosure system adopted by the United States Securities and Exchange Commission (the “Commission) and Canadian securities regulators, to prepare this annual report in accordance with Canadian disclosure requirements, which are different from those of the United States. The Registrant has prepared its consolidated financial statements, which are filed as
”
Exhibit 99.2
to this annual report on Form 40-F,
in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. Financial statements prepared in accordance with IFRS may differ from financial statements prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and they may not be comparable to financial statements of United States companies. Unless otherwise indicated, all dollar amounts in this annual report on Form
40-F
are in Canadian dollars. The exchange rate of Canadian dollars into U.S. dollars, on March 25, 2022, based upon the closing rate published by the Bank of Canada, was U.S.$1.00=CDN$ 1.2502. Bank of Canada exchange rates are nominal quotations and are not buying or selling rates. These rates are intended for statistical or analytical purposes. Rates available from financial institutions will differ. Rates are expressed in Canadian dollars, converted from U.S. dollars. FORWARD-LOOKING INFORMATION
Certain information included in this annual report and the exhibits attached hereto, along with other documents the Registrant has publicly filed on SEDAR and with the Commission may constitute forward-looking information within the meaning of Canadian and U.S. securities laws, including Section 21E of the Securities Act of 1933, as amended (the “Securities Act”), the U.S. Private Securities Litigation Reform Act of 1995 (the “PSLRA”), or in releases made by the Commission, all as may be amended from time to time. The following cautionary statements are being made pursuant to the Securities Act, the Exchange Act and the PSLRA with the intention of obtaining the benefits of the “safe harbor” provisions of such laws.
In some cases, forward-looking information can generally be identified by the use of terms such as “may”, “will”, “should”, “could” “expect”, “plan”, “anticipate”, “foresee”, “appears”, “believe”, “intend”, “estimate”, “predict”, “potential”, “continue”, “objective”, “modeled”, “hope”, “forecast” or other similar expressions concerning matters that are not historical facts. Forward-looking information relates to management’s future outlook and anticipated events or results, and can include statements or information regarding plans, timelines and targets for mining, development, production and exploration activities at the Registrant’s mineral property held through a joint venture with De Beers Canada Inc. (“De Beers”) (51% De Beers and 49% the Registrant), projected capital expenditure requirements, liquidity and working capital requirements, estimated reserves and resources at, and production from, the Gahcho Kué Diamond Mine (“GK Diamond Mine”), exploration activities at the Kennady North Project (“KNP”), and expectations concerning the diamond industry, and expected cost of sales and operating costs. Forward-looking information included in this annual report on Form
40-F
and exhibits attached hereto, include the current production forecast for the GK Diamond Mine, estimated reserves and resources at the GK Diamond Mine, and plans, timelines and targets for mining, development, permitting, production and exploration activities at the Registrant’s mineral property. The timing and quantum will depend on a number of factors including production ramp-up,
the production profile and realized diamond prices. 3
Forward-looking information is based on certain factors and assumptions regarding, among other things, the current mine plans for the GK Diamond Mine; mining, production and exploration activities at the Registrant’s mineral property; currency exchange rates; required operating and capital costs, labour and fuel costs, world and United States economic conditions, future diamond prices, and the level of worldwide diamond production. While the Registrant considers these assumptions to be reasonable based on the information currently available to it, they may prove to be incorrect. Forward-looking information is subject to certain factors, including risks and uncertainties, which could cause actual results to differ materially from what the Registrant currently expects. These factors include, among other things, the uncertain nature of mining activities, including risks associated with joint venture operations, including risks associated with the inability to control the timing and scope of future capital expenditures, variations in mineral resource and mineral reserve estimates, grade estimates or expected recovery rates, failure of plant, equipment or processes to operate as anticipated, risks associated with regulatory requirements and the ability to obtain all necessary regulatory approvals, modifications to existing practices so as to comply with any future permit conditions that may be imposed by regulators, the risk of fluctuations in diamond prices and changes in United States and world economic conditions, uncertainty as to whether dividends will be declared by the Registrant’s Board of Directors, the risk of fluctuations in the Canadian/U.S. dollar exchange rate and cash flow and liquidity risks. See “Risk Factors” in the Registrant’s Annual Information Form attached hereto as
Exhibit 99.1
for additional material risk factors that could cause actual results to differ materially from the forward-looking information. Readers are cautioned not to place undue importance on forward-looking information, which speaks only as of the date of this Annual Report, and should not rely upon this information as of any other date. Due to assumptions, risks and uncertainties, including the assumptions, risks and uncertainties identified above and elsewhere in this Annual Report, actual events may differ materially from current expectations. The Registrant uses forward-looking statements because it believes such statements provide useful information with respect to the currently expected future operations and financial performance of the Registrant, and cautions readers that the information may not be appropriate for other purposes. While the Registrant may elect to, it is under no obligation and does not undertake to update or revise any forward-looking information, whether as a result of new information, future events or otherwise at any particular time, except as required by law. Additional information concerning factors that may cause actual results to materially differ from those in such forward-looking statements is contained in the Registrant’s filings with Canadian and United States securities regulatory authorities and can be found at www.sedar.com and www.sec.gov, respectively.
4
NOTICE TO UNITED STATES READERS REGARDING
RESOURCE AND RESERVE ESTIMATES
The Registrant is subject to the reporting requirements of applicable Canadian securities laws, and as a result reports information regarding mineral properties, mineralization and estimates of mineral reserves and mineral resources in accordance with Canadian reporting requirements, which are governed by Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects. As such, the information included in this annual report on Form 40-F or incorporated by reference herein, concerning mineral properties, mineralization and estimates of mineral reserves and mineral resources is not comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements of the Commission.
PRINCIPAL DOCUMENTS
The following documents have been filed as part of this annual report on Form
40-F:
A. Annual Information Form
The Registrant’s Annual Information Form for the fiscal year ended December 31, 2021 is attached as
Exhibit 99.1
to this annual report on Form 40-F,
and is incorporated by reference herein. 5
B. Audited Annual Financial Statements
The Registrant’s consolidated audited annual financial statements as at and for the years ended December 31, 2021 and 2020, including the report of the independent registered public accounting firm with respect thereto, are included in
Exhibit 99.2
attached to this annual report on Form 40-F
and are incorporated by reference herein. C. Management’s Discussion and Analysis
The Registrant’s management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2021 is included in
Exhibit 99.2
attached to this annual report on Form 40-F
and is incorporated by reference herein. TAX MATTERS
Purchasing, holding or disposing of securities of the Registrant may have tax consequences under the laws of the United States and Canada that are not described in this annual report on Form
40-F.
DISCLOSURE CONTROLS AND PROCEDURES
We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in reports filed under the U.S. Securities Exchange Act of 1934, as amended, (the “Exchange Act”) is recorded, processed, summarized and reported within the appropriate time periods and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely disclosures regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that any disclosure controls and procedures, no matter how well conceived or operated, can only provide reasonable, not absolute, assurance that the objectives of the control system are met, and management is required to exercise its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
As required by Rule 13a-15(b) under the Exchange Act, we conducted an evaluation, under the supervision and with the participation of our management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2021, the end of the period covered by this annual report on Form
40-F.
Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2021, the design and operation of the Company’s disclosure controls and procedures provide reasonable assurance that they are effective. The Registrant’s Management’s Annual Report on Internal Control Over Financial Reporting as of December 31, 2021, is included in Exhibit 99.2
attached to this annual report on Form 40-F.
6
MANAGEMENT’S ANNUAL REPORT ON
INTERNAL CONTROL OVER FINANCIAL REPORTING
The Registrant’s management’s annual report on internal control over financial reporting as of December 31, 2021, is included in
Exhibit 99.2
attached to this annual report on Form 40-F
and is incorporated by reference herein. ATTESTATION REPORT OF THE REGISTERED PUBLIC ACCOUNTING FIRM
The Company’s auditor has attested to internal control over financial reporting as of December 31, 2021. The auditor’s attestation immediately precedes the audited consolidated financial statements of the Company in
Exhibit 99.2
and is incorporated by reference in this annual report on Form 40-F.
7
NOTICES PURSUANT TO REGULATION BTR
There were no notices required by Rule 104 of Regulation BTR that the Registrant sent during the year ended December 31, 2021 concerning any equity security subject to a blackout period under Rule 101 of Regulation BTR.
CODE OF ETHICS FOR CHIEF EXECUTIVE OFFICER,
CHIEF FINANCIAL OFFICER, OFFICERS, DIRECTORS AND EMPLOYEES
The Registrant has adopted a written “code of ethics” (as defined by the rules and regulations of the Commission), entitled “Code of Ethics and Business Conduct” that applies to each director, officer and employee, including the Registrant’s Chief Executive Officer, Chief Financial Officer and principal accounting officer.
The code is attached hereto as
Exhibit 99.16
to this annual report on Form 40-F.
The code may also be obtained from SEDAR at www.sedar.com or free of charge upon request from Investor Relations of the Registrant at Suite 1410, 161 Bay Street, Toronto, Ontario, M5J 2S1, (416) 361-3562,
or by viewing the Registrant’s web site at www.mountainprovince.com
under the tab entitled “Company/Governance”.
There were no amendments to the code, and no waivers of the code with respect to any director, executive officer or principal financial and accounting officers.
CORPORATE GOVERNANCE GUIDELINES
The Registrant has adopted corporate governance guidelines and established committees and charters for its Audit Committee, Nominating Corporate Governance Committee and Compensation Committee regarding such matters as, but not limited to, the Audit Committee, director qualification standards and responsibilities, director compensation and management succession. These guidelines and charters are available on the Registrant’s website at
www.mountainprovince.com
under the tab entitled “Company/Governance”.
8
AUDIT COMMITTEE
The Board of Directors of the Registrant has a separately designated standing Audit Committee. The members of the Audit Committee are:
Chair: Ken Robertson
Members: Dean Chambers
Dan Johnson
Ken Robertson was appointed to the Audit Committee and assumed the role of Chairman effective July 2020.
AUDIT COMMITTEE FINANCIAL EXPERT
The Registrant’s Board of Directors has determined that it has two Audit Committee financial experts serving on its Audit Committee. Ken Robertson and Dean Chambers have been determined by the Board of the Registrant to be an “audit committee financial expert” as that term is defined by the rules and regulations of the Commission and are independent, as that term is defined by applicable securities laws and the Nasdaq Stock Market LLC. The Commission has indicated that the designation of directors as audit committee financial experts does not (i) make them an “expert” for any purpose, (ii) impose any duties, obligations or liability on them that are greater than those imposed on members of the Audit Committee and Board of Directors who do not carry this designation, or (iii) affect the duties, obligations or liability of any other member of the Audit Committee or Board of Directors of the Registrant.
Mr. Robertson is a Chartered Professional Accountant, Chartered Accountant and financial executive with strong financial experience in the mining industry.
Mr. Chambers holds a Bachelor of Engineering and Management degree from McMaster University. He is a professional engineer and financial executive with strong operational, financial, MA and major capital project experience in the mining industry.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
Our independent registered public accounting firm is KPMG LLP, Toronto, ON, Canada, Auditor Firm ID: 85.
The aggregate fees billed for professional services rendered by KPMG LLP to the Registrant and its subsidiaries for the years ended December 31, 2021 and December 31, 2020 totaled $642,263 and $640,441, respectively, as detailed in the following table:
Auditor’s Fees |
2021 CAD$ |
% of Total Fees |
2020 CAD$ |
% of Total Fees | ||||
Audit Fees: |
||||||||
| Audit |
608,657 | 94.8 | 605,598 | 94.6 | ||||
| Audit related |
Nil | 0.0 | Nil | 0.0 | ||||
| Total Audit and Audit Related Fees | 608,657 |
94.8 |
605,598 |
94.6 | ||||
Tax Fees: |
||||||||
| Planning and advice |
33,606 |
5.2 | 34,843 |
5.4 | ||||
| Compliance |
Nil | 0.0 | Nil | 0.0 | ||||
| Total Tax Fees | 33,606 |
5.2 |
34,843 |
5.4 | ||||
| Total Fees |
642,263 |
100.0 |
640,441 |
100.0 |
9
Tax Fees
Tax fees were for tax compliance, tax advice and tax planning professional services. These services consisted of: tax compliance including the review of tax returns, and tax planning and advisory services.
PRE-APPROVAL
OF AUDIT AND NON-AUDIT
SERVICES PROVIDED BY INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
It is within the mandate of the Registrant’s Audit Committee to approve all audit and
non-audit
related fees and accordingly 100% of the Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees were approved by the Audit Committee. The charter of the Audit Committee requires the Audit Committee to review and approve the engagement of the external auditors to perform non-audit
services, together with the fees therefore, and the impact thereof, on the independence of the external auditors. The Registrant’s Audit Committee has implemented a policy restricting the services that may be provided by the Registrant’s auditors and the fees paid to the Registrant’s auditors. Prior to the engagement of the Registrant’s auditors to perform both audit, and
non-audit
services, the Audit committee pre-approves
the provision of the services. In making their determination regarding non-audit
services, the Audit Committee considers compliance with the policy and the provision of non-audit
services in the context of avoiding an adverse impact on auditor independence. All audit and non-audit
fees paid to KPMG LLP, for the financial year ended December 31, 2021, were pre-approved
by the Registrant’s Audit Committee and none were approved on the basis of the de minimis exemption set forth in Rule 2-01(c)(7)(i)(C)
of Regulation S-X.
Based on the Audit Committee’s discussions with management and the independent auditors, the Audit Committee is of the view that the provision of non-audit
services by KPMG LLP described above is compatible with maintaining the firm’s independence from the Registrant. OFF-BALANCE
SHEET ARRANGEMENTS The Registrant currently has no
off-balance
sheet arrangements. 10
TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
The following table lists as of December 31, 2021, information with respect to the Registrant’s known contractual obligations in Canadian dollars:
Less than |
1 to 3 |
4 to 5 |
After 5 |
|||||||||||||||||
1 Year |
Years |
Years |
Years |
Total |
||||||||||||||||
| Gahcho Kué Diamond Mine commitments |
$ | 4,391 | $ | - |
$ | - |
$ | - |
$ |
4,391 |
||||||||||
| Gahcho Kué Diamond Mine decommissioning fund |
10,000 | 20,000 | - |
- |
30,000 |
|||||||||||||||
| Notes payable - Principal |
379,034 | - |
- |
- |
379,034 |
|||||||||||||||
| Notes payable - Interest |
30,323 | - |
- |
- |
30,323 |
|||||||||||||||
$ |
423,748, |
$ |
20,000 |
$ |
- |
$ |
- |
$ |
443,748, |
|||||||||||
For further information on the tabular disclosure of contractual obligations, see page 25 of the management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2021 of the Registrant, incorporated by reference and included herein as
Exhibit 99.2
of this annual report on Form 40-F.
11
MINE SAFETY DISCLOSURE
Not applicable.
UNDERTAKING
The Registrant undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form
40-F;
the securities in relation to which the obligation to file an annual report on Form 40-F
arises; or transactions in said securities. ADDITIONAL INFORMATION
Additional information relating to the Registrant may be found on the System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com and on the Commission’s Electronic Data Gathering, Analysis and Retrieval (EDGAR) system at www.sec.gov.
SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all of the requirements for filing on Form
40-F
and has duly caused this annual report to be signed on its behalf by the undersigned, thereto duly authorized. DATED
MOUNTAIN PROVINCE DIAMONDS INC.
(Registrant)
By: |
/s/ MARK WALL |
| Name: Mark Wall | ||
12
EXHIBIT INDEX
EXHIBIT |
DESCRIPTION OF EXHIBIT | |||
| 99.1 | ||||
| 99.2 | ||||
| 99.3 | ||||
| 99.4 | ||||
| 99.5 | ||||
| 99.6 | ||||
| 99.7 | ||||
| 99.8 | ||||
| 99.9 | ||||
| 99.10 | ||||
| 99.11 | ||||
| 99.12 | ||||
| 99.13 | ||||
| 99.14 | ||||
| 99.15 | ||||
| 99.16 | ||||
| 101 | Interactive Data File (formatted as Inline XBRL) | |||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||
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