Peregrine Diamonds Announces Acquisition Of Botswana Diamond Exploration Company

March 30, 2015 PDF version
Peregrine Diamonds Ltd. (“Peregrine” or “the Company”) (TSX:PGD) is pleased to announce that it has entered into an agreement to acquire all of the shares of Diamexstrat Botswana (Proprietary) Ltd. (“DES Botswana”), a privately held Botswana registered diamond exploration and development company, from Diamond Exploration Strategies Limited, a UK registered private company (“DES UK”). DES Botswana’s primary assets are eight highly prospective diamond Prospecting Licences, covering 5,746 km2 in Botswana.

Tom Peregoodoff, President and CEO commented “This transaction is a significant milestone in the strategic development of the Company. With this single transaction, we have become a significant diamond exploration player in Botswana. The principals of DES Botswana have over 60 years of combined diamond exploration experience in the country, most of that time with the De Beers Group. Using their extensive experience, they have compiled a county-wide data set that is unparalled in its scope and depth. They have assembled what we believe is the most prospective land package for new diamond discoveries in Botswana. This is one of the most compelling diamond exploration opportunities that I have seen in many years. Exploration work is ongoing and we expect to be drilling kimberlite targets in 2015.”

Eric Friedland, Executive Chairman said, “This transaction immediately gives Peregrine access to some of the world’s most prospective diamond hunting ground. Botswana is the largest producer of diamonds in the world by value. It is true Tier 1 diamond mine country as shown by such world class diamond mines as Orapa and Jwaneng. We believe there is tremendous diamond discovery potential in Botswana and the unique combination of the DES team with the Peregrine team gives us a real competitive advantage.”

The Purchase Agreement
The purchase agreement between Peregrine and DES UK transfers ownership of DES Botswana and all of its assets to Peregrine in consideration for the grant by Peregrine of a 1% gross overriding royalty (the “Royalty”) to DES UK on all precious stone mineral interests held at the time of closing and those which may be acquired in specific target areas. In addition, Peregrine will assume a $450,000 loan that is currently owed by DES Botswana to DES UK and which was originally advanced by Peregrine. The agreement allows for Peregrine to buy out the Royalty at various milestones as follows:
  • For US$2 million if within 60 days of the discovery of a diamondiferous kimberlite as defined by confirmation of the presence of microdiamonds or recovery of macrodiamonds in drill core/percussion chips
  • For US$5 million if within 60 days of delivery of Pre-Feasibility
  • For US$7.5 million if within 60 days of positive construction decision
In the event that Peregrine chooses to not pursue exploration on any of the Prospecting Licences, title for those licences shall revert to DES UK and Peregrine shall be granted a 1% gross overriding royalty on those properties with the same buy-out provisions as above.

As part of the transaction, DES UK will enter into a services agreement with Peregrine under which DES UK will provide Botswana-based operational management of all Peregrine defined work programs. The transaction is expected to close April 15, 2015.

The Diamond Exploration Strategies Team
Mr. Barry Bayly has over 36 years diamond exploration and development experience including 28 years with De Beers. He was a member of the De Beers South African exploration team that discovered and evaluated the Venetia, Palmietgat, Marsfontein and The Oaks kimberlites. Mr. Bayly was the De Beers Exploration Manager for Botswana and Tanzania. In addition to his extensive experience with De Beers exploration, he also spent seven years with De Beers Marine, most recently as General Manager. He spent the last two years with De Beers as General Manager, Group Exploration for Southern Africa, India and Australasia.

Mr. Andre Fourie is a professional geologist who has been involved with African mineral exploration for over 23 years, including twelve years with the De Beers Group. He was the Mineral Resource Manager for several of De Beers