July 10, 2017
Peregrine Diamonds Ltd. (“Peregrine” or the “Company”) is pleased to announce that it will be offering rights (the “Offering”) to holders of its common shares of record at the close of business on July 17, 2017 (the “Record Date”), expiring August 15, 2017 (“Expiry Date”). The Offering will be made in all of the provinces of Canada and in such other jurisdictions where the Company is eligible to make such Offering. All of Peregrine’s executive officers and directors intend to fully participate in the Offering.
Shareholders of record on July 17, 2017 will receive one right (a “Right”) for each common share held. Three and three-tenths (3.3) Rights will entitle the holder to purchase one common share of the Company (“Common Shares”) at a price of $0.10 per Common Share. Exercise of the Rights and purchase of the Common Shares must be completed by 2:00 p.m. (Vancouver time) on the Expiry Date. Shareholders who fully exercise their Rights are entitled to subscribe pro rata for additional Common Shares, if available, that were not subscribed for initially on or before the Expiry Date. A fully subscribed Offering will raise gross proceeds of $10.28 million, of which $10 million is backstopped by way of a standby purchase agreement. The proceeds of the Offering will be used to complete the remainder of the 2017 Chidliak Diamond Resource Expansion Program and for general corporate purposes and working capital.
Mr. Eric Friedland (Peregrine’s Executive Chairman), Newstar Securities Investments Ltd., a company 100% indirectly owned and controlled by Mr. Robert Friedland (“Newstar”), and Exploration Capital Partners 2005 Limited Partnership (“Exploration Capital”, a limited partnership managed by Resource Capital Investment Corp. which is 100% owned by Sprott Inc.) (collectively, the “Standby Purchasers”) have entered into a standby purchase agreement (“the Standby Agreement”) with Peregrine pursuant to which the Standby Purchasers severally agreed to collectively purchase up to 55,901,656 of the Common Shares that are not otherwise purchased under the Offering, of which Exploration Capital has agreed to purchase up to 50,000,000 of the Common Shares. In addition to this undertaking, Mr. Eric Friedland, who owns or controls 59,615,545 Common Shares (representing 17.57% of the issued and outstanding Common Shares) and Newstar, which owns or controls 85,908,993 Common Shares (representing 25.32% of the issued and outstanding Common Shares) have each committed to exercise all of their Rights under the Offering.
The Common Shares of the Company are expected to commence trading on the TSX on an ex-Rights basis at the opening of business on July 13, 2017, meaning that Common Shares purchased on, or following that date will not be entitled to receive the Rights under this Offering. At that time, the Rights are expected to be posted for trading on the TSX on a “when issued” basis and will thereafter trade under the symbol “PGD.RT”. Trading of the Rights is expected to continue until 9:00 a.m. (Vancouver time) on the Expiry Date.
A Rights Offering Notice together with Rights certificates will be mailed to eligible shareholders on or about July 24, 2017. Registered shareholders wishing to exercise their Rights must forward the completed Rights certificates, along with the applicable funds to Computershare Investor Services Inc. by the Expiry Date. Shareholders who own their shares through an intermediary, such as a bank, trust company, securities dealer or broker, will receive materials and instructions from their intermediary.
A copy of the Rights Offering Circular dated July 10, 2017 can be obtained from Peregrine’s profile on the SEDAR website at www.sedar.com, the Company’s website at www.pdiam.com, from your dealer representative, or by contacting the Assistant Corporate Secretary John Kim at 604-331-9816 or by email at firstname.lastname@example.org.
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 in which such offer or solicitation would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
The securities offered under the Offering have not been and will not be registered under the United States Securities Act of 1933, as amended (the “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 Securities Act) or a person in the United States, unless an exemption from such registration requirements is available. Certain accredited investors in the United States will be permitted to participate in the Offering on a private placement basis upon satisfying the Company that they qualify for an exemption from the registration