The deal will see De Beers acquire all of the Peregrine’s outstanding common shares for C$0.24 per share, for a grand total of approximately C$107 million.
The Canadian branch of global mega miner De Beers has entered into an arrangement agreement to purchase Canadian diamond miner Peregrine Diamonds (TSX:PGD).
The deal will see De Beers acquire all of Peregrine’s outstanding common shares for C$0.24 per share, for a grand total of approximately C$107 million. The transaction represents a 50-percent premium to Peregrine’s stock price of C$0.16 on July 18, 2018.
Peregrine’s flagship asset is its wholly-owned, 317,213-hectare Chidliak project, located 120 kilometers from Iqaluit, the capital of Nunavut. To date, 74 kimberlites have been discovered at the site, with eight being potentially economic.
“We have consistently stated that Chidliak holds significant diamond mine development potential and this transaction is an excellent outcome for the company’s stakeholders, including shareholders, community members and the territory of Nunavut,” said Tom Peregoodoff, Peregrine’s president and CEO.
An updated preliminary economic assessment, completed earlier this month, pegged the inferred mineral resource for Chidliak at 17.96 million carats, with a life of mine of 13 years.
It was likely these positive results motivated De Beers to pursue Peregrine.
“The transaction ensures the next steps in mine development are taken by a world-class operator with recognized arctic mine development and operational experience, and ensures stakeholders will benefit from responsible development of this rare and unique diamond resource,” added Peregoodoff.
The deal was dependent on Mountain acquiring Kennady Diamonds, a purchase which was completed at the end of March. Kennady had owned the property adjacent to the Gahcho Kué diamond mine in Canada’s Northwest Territories, a project now owned by joint partners De Beers and Mountain Province.
The Peregrine acquisition further bolsters De Beers presence in northern Canada.
“The Peregrine team has done outstanding work progressing the Chidliak project, demonstrating its quality and high potential. With our extensive De Beers Group operating experience in similar Canadian arctic environments and employing innovative mining methods, we believe we are very well positioned to develop this resource further,” said Kim Truter, CEO, De Beers Canada.
Following the announcement that Peregrine would be acquired, the company’s share price jumped almost 46 percent, sitting at C$0.23 at 2:53 p.m. EST.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.