Peregrine Diamonds Ltd. (TSX:PGD) announced that it completed an option and subscription agreement with De Beers Canada Inc. that allows De Beers to enter into an earn-in and joint venture agreement with Peregrine for the Chidliak diamond project. De Beers has the right to enter the agreement — which would be 50.1 percent owned by De Beers and 49.9 percent owned by Peregrine — until December 13, 2013.
As quoted in the press release:
Under the Joint Venture, De Beers will be the project operator and will undertake mineral exploration and development work potentially leading to the completion of a National Instrument (“NI”) 43-101 compliant, Bankable Feasibility Study (“BFS”) and, if warranted, the construction of a diamond mine.
As consideration for the Option, De Beers will complete a $2.5 million private placement unit offering in Peregrine priced at $0.75 per unit. Each unit consists of one common share and one-half share purchase warrant with each whole warrant entitling De Beers to buy a common share in Peregine for $2.00 per share for a period of 24 months.
In addition, De Beers will make the January 31, 2013, $2.5 million payment due to BHP Billiton Canada Inc. (“BHP Billiton”) that is required under Peregrine’s agreement to purchase BHP Billiton’s 51% interest in Chidliak as first announced on December 20, 2011. Both the private placement and this payment will be credited towards De Beers’ earn-in requirements described below.