Mountain Province Diamonds Announces Details of Proposed Kennady Diamonds Spin-out

Mountain Province Diamonds

is pleased to announce further details on the proposed spin-out of the Company's 100 percent-controlled Kennady North diamond project into a newly-incorporated company Kennady Diamonds Inc. The proposed spin-out will occur through a plan of arrangement (the "Arrangement") and will be subject to regulatory and court approval, as well as shareholder approval at a special meeting currently planned for April 25, 2012. The Company has taken steps, subject to court approval, to set the record date for notice of and voting at the special meeting as March 23, 2012. Upon completion of the transfer of the Kennady North property and working capital in the amount of C$3M to Kennady Diamonds, Mountain Province intends to distribute 100 percent of the shares of Kennady Diamonds to Mountain Province shareholders on the basis of one Kennady Diamond share for every five shares of Mountain Province held by shareholders. Patrick Evans, President and CEO, commented: "The proposed spin-out of Kennady North is intended to deliver greater value to Mountain Province shareholders by unlocking the value of this highly prospective diamond project. The transaction will also enable Mountain Province to focus on its flagship Gahcho Ku JV with De Beers while Kennady Diamonds focuses on advancing the 123 square-kilometer Kennady North Project."