Mountain Province Diamonds announced the closing of a non-brokered private placement for gross proceeds of approximately $11.5 million.

Under the placement, the diamond producer issued 5,476,177 common shares at a price of $2.10 per share. The offer was picked up by subscribers JP Morgan, Capital Group, Colonial First State and CQS/City Natural Resources.

Along with the private placement, an overhang block of approximately three million shares from the Lehman bankruptcy was acquired by some of the same subscribers.

Proceeds from the private placement will be used to support the feasibility study and permitting for the Gahcho Kue diamond project, and for general corporate purposes.

Located in Canada's Northwest Territories, Gahcho Kue is one of the largest new diamond projects being developed. The project consists of a cluster of kimberlites, three of which have an indicated resource of approximately 30.2 million tons grading at 1.67 carats per ton (approximately 50.5 million carats).