July 9, 2007
Vancouver, British Columbia, Canada - Monday, July 9, 2007 - Peregrine
Diamonds Ltd. (TSX:PGD) (“Peregrine”) today announced that it has
entered into a new FalconTM system deployment agreement with BHP
Billiton which will govern Peregrine’s use of the FalconTM airborne
gravity gradiometer system as well as BHP Billiton’s rights to earn into
certain mineral discoveries made by that system.
In addition, the new agreement rationalizes the numerous joint venture,
earn-in, and FalconTM data usage and deployment agreements that existed
between Peregrine and BHP Billiton on various diamond, copper and IOCG
properties located in Canada, United States, Mexico, and Peru.
Highlights of the new agreement include:
Termination of BHP Billiton’s right to earn-into the Great Bear,
Ica, IM, Lac de Gras East, Mexico, Nanuq, Pellatt Lake, TW, WO, and US
Generative Properties. These earn-in rights have been replaced with
royalties varying from 0.7% to 2%, depending on the property and
commodity, in favour of BHP Billiton. The royalties can be purchased by
Peregrine, in whole or in part, at the completion of a feasibility
study, for an independently determined fair market value.
BHP Billiton retains the right to earn up to 58% of the Foxe
Basin, Chidliak, Mirage Bay and Timmijuuq properties, and 65% of any
other future mineral property where FalconTM is deployed by Peregrine.
To exercise its earn-in rights, BHP Billiton must first expend US$15
million to US$50 million per property, depending on when the earn-in
commences, to earn a 51% interest. BHP Billiton can earn an additional
7% interest by delivering a bankable feasibility study. In the case of a
future mineral property where FalconTM is deployed by Peregrine, BHP
Billiton can purchase a further 7% interest (to bring their total to
65%) from Peregrine at the completion of the feasibility study at a
price equal to fair market value as independently determined. Additional
conditions exist for the creation of a 51-49% joint venture between the
parties in the event BHP Billiton does not earn-in beyond 51% and for
different earn-in arrangements should Peregrine own less than 100% of
any particular property prior to the commencement of a FalconTM survey.
Peregrine (and affiliates) will have the right, but not the
obligation, to use up to 40,000 line kilometres of FalconTM airborne
gravity gradiometer surveys per year until October 1, 2010.
Peregrine is a well-funded Canadian diamond exploration/development
company that is managed by experienced geoscientists. In addition to
completing a third bulk sampling program on its WO Diamond Project, NT,
Peregrine is also exploring for other diamondiferous kimberlites on its
extensive land holdings in Canada. Peregrine trades on the Toronto Stock
Exchange under the symbol “PGD”.
For further information, please contact Jim Crawford, Manager - Investor Relations at 604-408-8880 or at firstname.lastname@example.org
Back to the News Releases page