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Peregrine to Purchase Chidliak from BHP Billiton for $9M

Dec 20, 2011 9:38 AM   By Jeff Miller
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RAPAPORT... Peregrine Diamonds agreed to buy BHP Billiton's share in the Chidliak diamond project in Canada.  Under the terms of the agreement, Peregrine will pay $9 million to BHP over a period of three years, and grant a 2 percent royalty on any future mineral production from Chidliak. Peregrine has the right to match any offer by a third party to purchase any of the royalty, should BHP decide to sell.

The Chidliak transaction is expected to close  on or before January 31, 2012. Peregrine will pay BHP $1.5 million at closing and $2.5 million on  January 31 in  2013,  2014 and 2015.

In addition, as part of the transaction, Peregrine has acquired BHP's  regional diamond exploration database and BHP relinquished diamond marketing rights on certain Canadian mineral properties in which Peregrine has an interest.

Eric Friedland, Peregrine's chief executive, said, "BHP Billiton's decision to review its diamonds business has presented Peregrine with an excellent growth opportunity. A 100 percent stake in Chidliak, one of the world's leading diamond exploration projects, at a time when diamond supply shortfalls are on the horizon and world-wide demand for diamonds continues to grow, offers us complete flexibility on how this project will be developed in order to maximize shareholder value.''

Tags: bhp, chidliak, diamonds, Jeff Miller, peregrine, purchase
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