Peregrine Diamonds acquires Botswana-based explorer
Canadian Peregrine Diamonds (TSX:PGD) said Monday it will acquire Botswana- focused junior explorer Diamexstrat, which owns eight prospecting licences in the southern African nation .
The purchase agreement transfers DES Botswana to Peregrine in consideration for a 1% gross overriding royalty to owner Diamond Exploration Strategies (DES UK) Ltd. In addition, Peregrine will assume a $450,000 loan, which it advanced to DES Botswana.
The deal allows Peregrine to buy out the royalty provisions at various milestones. Peregrine can pay $2 million if within 60 days of the discovery of a diamondiferous kimberlite, as defined by confirmation of the presence of microdiamonds or recovery of macrodiamonds in drill core/percussion chips; or $5 million if within 60 days of delivery of pre-feasibility study; or $7.5 million if within 60 days of positive construction decision. If Peregrine decides to not pursue exploration on any of the licenses, the title for those licenses revert to DES UK and Peregrine shall be granted a 1 percent gross overriding royalty with the same buy-out provisions.
As part of the transaction, DES UK will enter into a services agreement with Peregrine under which it will provide Botswana-based operational management. The transaction is expected to close on April 15.