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RAPAPORT... Peregrine Diamonds Ltd. filed a preliminary, short form prospectus in respect to a proposed financing through a rights offering of units. The offering is limited to all shareholders in Canada's provinces and territories, with the exception of Quebec, and in other jurisdictions where the company is eligible to make the rights offering.
Under the proposal, Peregrine's shareholders would receive one right for each common share, and each unit would be comprised of one common share and one common share purchase warrant. Each warrant will be exercisable for one common share for a period of six months, following the closing of the rights offering. Peregrine intends to use the proceeds to initiate bulk sampling at Chidliak via large diameter reverse-circulation drilling that is scheduled to being in 2015. If all of the warrants that are expected to be issued are exercised, the additional proceeds are anticipated to be sufficient to advance Chidliak through the completion of resource statements for the CH-6, CH-7, and CH-44 kimberlites and for the delivery of a preliminary economic assessment in 2016. Eric Friedland, Peregrine's chairman and CEO, Newstar Securities SRL (a company wholly owned by Robert Friedland), and Goodman Merchant Capital Inc. (managed by Ned Goodman) (collectively, the standby purchasers) have agreed to enter into a standby purchase agreement, whereas they will severally agree to purchase all units they are entitled to under their basic subscription privilege and all units that are not otherwise subscribed for under the rights offering. For the standby commitment, Peregrine will agree to pay the standby purchasers a fee equal to 3 percent of the gross proceeds of the rights offering, excluding proceeds from the standby purchasers' exercise of their basic subscription privilege under the offering. The rights offering and the standby agreement are subject to certain conditions and necessary regulatory approvals, including the approval of the Toronto Stock Exchange.
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