De Beers Canada and Peregrine Diamonds Ltd. today announced they have entered into an agreement whereby De Beers will acquire 100% of the outstanding shares of Peregrine for $0.24 per share in cash for a total equity value of approximately C$107 million (US$81 million). Peregrine Diamonds is a TSX-listed diamond exploration and development company and owner of the high quality Chidliak diamond resource located in Canada’s Nunavut Territory. The transaction represents a 50% premium to Peregrine’s share price of $0.16 on July 18, 2018, and a premium of 44.5% to the volume weighted average price of the shares for the 20-trading days ended July 18, 2018. It is an all cash offer that is not subject to a financing condition.
The Chidliak resource was discovered in 2008 and is located approximately 120 kilometres northeast of Iqaluit on Baffin Island. A total of 74 kimberlite pipes have been identified at Chidliak, including the CH-6 and CH-7 pipes, which are the current focus of Peregrine’s Chidliak Phase One Diamond Development program. The program has a total Inferred Mineral Resource in excess of 22 million carats. Peregrine’s recent Preliminary Economic Assessment for Chidliak points to the high quality of the CH-6 deposit in particular. An estimated grade of 2.41 carats per ton and a diamond valuation of US$151 per carat (equating to approximately US$360 per ton) make CH-6 one of the most attractive undeveloped diamond resources in Canada. Peregrine also has exploration properties elsewhere in Nunavut and the Northwest Territories.
Bruce Cleaver, CEO, De Beers Group, said: “The Chidliak resource holds significant development potential and will be an exciting addition to our portfolio. With a strong outlook for consumer demand, we are seeking new opportunities to invest in our future supply potential and look forward to growing our portfolio in Canada and working with community partners in the Nunavut Territory as we further develop the project.”
Kim Truter, CEO, De Beers Canada, said: “This investment reinforces De Beers Group’s long-term commitment to Canada, following our investment in the Gahcho Kué diamond mine, which entered commercial production last year. Chidliak is a high value prospect and the Peregrine team has done great work to bring it to this advanced stage. With the transformation of our company in Canada over the past two years, our focused investment in new and innovative mining methods, and our expertise in Canada’s arctic environments, we believe we are very well positioned to now develop the resource further.”
Eric Friedland, Founder and Executive Chairman of Peregrine Diamonds, stated: “The transaction we are jointly announcing today is the next step in the development of the Chidliak diamond project. The team at Peregrine has done an outstanding job advancing Chidliak to this stage and it is particularly gratifying that the quality of the diamond resource we have defined is recognized by the world’s premier integrated diamond company. All stakeholders will benefit from this transaction and the involvement of De Beers as Chidliak advances toward development.” The transaction has been unanimously recommended by Peregrine’s Board of Directors to Peregrine security holders. Completion of the Plan of Arrangement is expected to occur in September.