Peregrine Announces Filing of Preliminary Prospectus for Rights Offering

August 11, 2014 PDF version

Vancouver, BC - Peregrine Diamonds Ltd. (“Peregrine” or the “Company”) (TSX:PGD) announces that it has filed a preliminary short form prospectus in respect of a proposed financing through a rights offering of units (“Units”) to its shareholders. The offering will be open to all shareholders in all of the provinces and territories of Canada other than Quebec, and in such other jurisdictions where the Company is eligible to make the rights offering.

Under the proposed financing, Peregrine shareholders, as of a record date to be announced, will receive one right for each common share of the Company (“Common Share”) held. Each Unit will be comprised of one Common Share and one common share purchase warrant (“Warrant”). Each Warrant will be exercisable for one Common Share for a period of six months following the closing of the rights offering. The number of rights that will be required to purchase one Unit, the price of the Units and the exercise price of the Warrants, as well as the record date for the rights offering and the expiry date of the rights, will be determined at the time of the filing of the final short form prospectus. Application is being made to the Toronto Stock Exchange for the listing of the rights and the Warrants until their respective expiry dates.

Mr. Eric Friedland (Peregrine’s Chairman and CEO), Newstar Securities SRL (a company wholly owned by Mr. Robert Friedland), and Goodman Merchant Capital Inc. (managed by Mr. Ned Goodman) (collectively, the “Standby Purchasers”) have agreed to enter into a standby purchase agreement (“the Standby Agreement”) with Peregrine pursuant to which the Standby Purchasers will severally agree to purchase all Units they are entitled to under their basic subscription privilege and all Units that are not otherwise subscribed for under the rights offering on the terms to be contained in the Standby Agreement. For the standby commitment, Peregrine will agree to pay the Standby Purchasers a fee equal to 3% of the gross proceeds of the rights offering, excluding proceeds from the Standby Purchasers’ exercise of their basic subscription privilege under the rights offering.

Peregrine intends to use anticipated proceeds from the rights offering to initiate bulk sampling at Chidliak via large diameter reverse circulation drilling which is scheduled to commence in 2015. If all of the Warrants that are expected to be issued are exercised, the additional proceeds are anticipated to be sufficient to advance Chidliak through the completion of resource statements for the CH-6, CH-7, and CH-44 kimberlites and for the delivery of a Preliminary Economic Assessment in 2016.

The rights offering and the Standby Agreement are subject to certain conditions including, but not limited to, settlement and execution of the Standby Agreement, the issuance by applicable securities commissions of a receipt for each of the preliminary and final short form prospectuses, and all other necessary regulatory approvals including the approval of the Toronto Stock Exchange.

Further details concerning the rights offering and the procedures to be followed by shareholders is contained in Peregrine’s preliminary short form prospectus for the rights offering which is available at The preliminary short form prospectus is subject to completion or amendment. There will not be any sale or any acceptance of an offer to buy securities under the rights offering until a receipt for the final short form prospectus has been issued by the relevant securities regulatory authorities and the Toronto Stock Exchange has approved the rights offering.

No U.S. Registration

This news release does not constitute an offer to sell, or the solicitation of an offer to buy securities in any jurisdiction, including the United States. The securities offered under the rights offering will not be or have not been registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”), or the securities laws of any state of the United States, and may not be offered or sold in the United States or to, or for the account or benefit of, any U.S. Person (as defined in Regulation S of the U.S. Securities Act) or person in the United States, unless an exemption from such registration requirements is available. Certain institutional accredited investors in the United States will be permitted to participate in the rights offering on a private placement basis upon satisfying the Company that they qualify for an exemption from the registration requirements of the U.S. Securities Act and any applicable securities laws of any state of t