June 3, 2008
Peregrine Diamonds Ltd. (“Diamonds”) and Peregrine Metals Ltd.
(“Metals”) are pleased to announce that they have entered into a letter
of intent for the purpose of effecting a business combination whereby
the two companies will merge to form a new multi-commodity resource
company to be called Peregrine Resources Ltd. (“Peregrine Resources”).
Both companies are currently working to establish independently
calculated, NI 43-101 compliant resources; a copper resource at the
Altar porphyry deposit in San Juan Province, Argentina for Metals and a
diamond resource at the nine hectare DO-27 kimberlite pipe in the
Northwest Territories, Canada for Diamonds. In addition to these two
advanced projects, Peregrine Resources will have a portfolio of quality
base and precious metal, iron ore, diamond and uranium projects in
Chile, Argentina, Peru and Canada.
There are compelling reasons for this business combination including the following:
- Diamonds shareholders will acquire exposure to the Altar copper resource in a time of strong copper prices.
- Metals shareholders will acquire exposure to the DO-27 diamond
resource, located only 27 kilometres from the Diavik Diamond Mine.
- Peregrine Resources will have exposure to numerous excellent
exploration projects in diamonds, copper, iron and other precious and
base metals, thus spreading commodity risk and assuring news flow
throughout the year.
- The merger will capitalize on managerial and technical team
synergies between Diamonds and Metals and increase administration
- Peregrine Resources will have a significantly larger market
capitalization than Diamonds and still maintain a solid and diverse
- Metals will gain a Toronto Stock Exchange public listing
through the merger, creating more liquidity opportunities for
Senior Management of Peregrine Resources will
consist of: Eric Friedland, Chairman and CEO; Brooke Clements,
President; Rod Davey, Chief Operating Officer; Greg Shenton, Chief
Financial Officer; Jeff Toohey, Vice President Exploration-Metals; Peter
Holmes, Vice President Exploration-Diamonds; Wendy Mathison, Vice
President Operations; and Jennifer Pell, Chief Geoscientist. Several
directors from the current Diamonds and Metals Boards are expected to
join the Board of Directors of Peregrine Resources.
Throughout the merger process, Diamonds and Metals will continue to advance their respective projects.
About Peregrine Metals
Peregrine Metals Ltd. is a private, Canadian metals exploration company
formed in 2005 with 86.9 million shares outstanding. The most recent
financing of $7.9 million was completed in April, 2008 at a price of
$0.50 per share and current working capital is $4.5 million. To date,
Metals has spent $16.5 million on exploration including $9.5 million on
the Altar project. Brief descriptions of the main projects of Metals
Altar Porphyry Copper Project, Argentina
The primary focus for Metals has been the advancement of the Altar
porphyry copper-gold-molybdenum deposit in San Juan Province, Argentina.
An independent resource estimation based on a cumulative 28,850 metres
of core drilling in 64 holes is expected to be completed in August
2008. A 24-hole, 12,300 metre, diamond drilling campaign was completed
on schedule in April 2008. Following receipt of the resource estimate,
Metals will initiate a preliminary economic assessment of the deposit.
The first drilling at Altar was in 2003. Some of the better drill intercepts to date include:
- 542 metres @ 0.67% Cu, including 82.00 metres @ 0.97% Cu and 149.90 metres @ 0.93% Cu;
- 408 metres @ 0.63% Cu, including 100.00 metres @ 0.98% Cu;
- 444 metres @ 0.45% Cu, including 116.00 metres @ 0.70% Cu;
- 346 metres @ 0.56% Cu, including 106 metres @ 0.79% Cu;
- 430 metres @ 0.55% Cu, including 46 metres @ 1.32% Cu;
- 518 metres @ 0.72% Cu and 0.14 g/t Au, including 194 metres @ 0.93% Cu and 0.19 g/t Au;
- 394 metres @ 0.49% Cu including 60 metres @ 0.65% Cu.
copper mineralization at Altar includes both supergene chalcocite and
hypogene chalcocite-covellite-bornite replacing earlier chalcopyrite in
the upper 300 metres of the deposit. The average depth of the leached
capping is 70 metres. Preliminary metallurgical test-work on the
chalcocite enrichment zone suggests that this material would be amenable
to relatively low cost heap leaching and solvent
extraction/electrowinning (SX/EW). The alteration zone at Altar
encompasses an area measuring three by two kilometres with a strong,
coincident induced polarization (IP) geophysical anomaly of
approximately the same size; approximately