Peregrine Acquires DES BotswanaMarch 31, 15
(IDEX Online News) – Peregrine Diamonds has acquired all of the shares of Diamexstrat Botswana (Proprietary) Ltd. (DES Botswana), a Botswana-registered diamond exploration and development company, from Diamond Exploration Strategies Limited (DES UK).
DES Botswana's primary assets are eight prospective diamond prospecting licenses that cover 5,746 square kilometers and where, the company believes, current diamond exploration techniques could result in kimberlite discoveries that were overlooked by previous techniques.
In addition, three other areas have unresolved geophysical and kimberlitic indicator mineral anomalies with very good mineral chemistry. Many of the targets require only limited ground geophysical surveys in order to be 'drill ready.'
The purchase agreement ownership of DES Botswana and all of its assets to Peregrine in consideration for the grant by Peregrine of a 1-percent gross overriding royalty to DES UK on all precious stone mineral interests held at the time of closing and those that may be acquired in specific target areas.
In addition, Peregrine will assume a $450,000 loan 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. The company can pay $2 million if a diamondiferous kimberlite is discovered within 60 days, for $5 million within 60 days of delivery of Pre-Feasibility or for $7.5 million within 60 days of positive construction decision.
If Peregrine opts not to pursue exploration on any of the prospecting licenses, they will revert back to DES UK and Peregrine will receive a 1-percent gross overriding royalty on those properties with the same buy-out provisions.
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.
“This transaction is a significant milestone in the strategic development of the company,” said Peregrine president and CEO Tom Peregoodoff.
“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 unparalleled 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 on-going and we expect to be drilling kimberlite targets in 2015."
"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,” added Peregrine’s executive chairman Eric Friedland. “
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."