Peregrine Diamonds Ltd.
TSX : PGD

Peregrine Diamonds Ltd.

August 25, 2014 08:00 ET

Peregrine Diamonds Announces Terms of $15.1 Million Rights Offering

Standby purchase agreement executed

Final prospectus filed

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 25, 2014) -

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES

Peregrine Diamonds Ltd. ("Peregrine" or the "Company") (TSX:PGD) announced that it has filed and received regulatory approval for a final prospectus in each of the provinces and territories of Canada (other than Québec) for an offering of rights (the "Offering") to holders of common shares of the Company to raise approximately $15.1 million in gross proceeds. The Company intends to use the net proceeds of the Offering for the Company's 2014 Chidliak summer field program and to advance the 2015 Chidliak bulk sample program, as well as to make the final payment of $2.5 million owed to BHP Billiton.

Shareholders of Peregrine will receive one right (a "Right") for each common share ("Share") held. Two Rights will entitle the holder to purchase one unit ("Unit") at $0.21 per Unit. Each Unit will be comprised of one Share and one common share purchase warrant ("Warrant"). Each Warrant will be exercisable for one Share at a price of $0.21 per Share for six months from the date of closing of the Offering. The Offering will include an additional subscription privilege under which shareholders who fully exercise their Rights will be entitled to subscribe for additional Shares, if available, that were not otherwise subscribed for in the Offering.

Mr. Eric Friedland (Peregrine's Chairman and CEO), Newstar Securities SRL (a company wholly owned by Mr. Robert Friedland), and Goodman Merchant Capital Inc. (managed by Mr. Ned Goodman) (collectively, the "Standby Purchasers") have entered into a Standby Purchase Agreement with Peregrine pursuant to which the Standby Purchasers have severally agreed to purchase all Units that are not otherwise subscribed for under the Offering on the terms contained in the Standby Purchase Agreement. The Company has agreed to pay the Standby Purchasers a fee equal to 3% of the aggregate gross proceeds of the Offering excluding proceeds from the Standby Purchasers' exercise of their Basic Subscription Privilege.

Keys terms in the prospectus for the Offering include:

  • Each Peregrine shareholder, subject to restrictions imposed by applicable securities laws, will receive one transferable Right for each Share owned as of September 9, 2014, the record date of the Offering.
  • Two Rights will entitle the holder to purchase one Unit of Peregrine at $0.21. Each Unit will be comprised of one Share and one Warrant. Each Warrant will be exercisable for one Share at a price of $0.21 for six months from the date of closing of the Offering.
  • Approximately 71,921,597 Shares are expected to be issued under the Offering, which would represent 50% of Peregrine's currently outstanding Shares. In the event of exercise of all of the Warrants, a further 71,921,597 Shares would be issued for proceeds of $15.1 million, representing a further 50% of Peregrine's current outstanding Shares.
  • Shareholders who do not exercise all of their Rights will have their present ownership interests in Peregrine, as a percentage of the total outstanding Shares, reduced as a result of the Offering.
  • Peregrine expects the final prospectus relating to the Offering to be mailed to shareholders eligible to participate in the Offering on or about September 12, 2014.
  • The Rights will expire at 2:00 p.m. (Pacific Daylight Time) on October 6, 2014.
  • The Rights will be listed and posted for trading on the Toronto Stock Exchange with trading expected to begin on or about September 5, 2014.

Details concerning the Offering and the procedures to be followed by shareholders are contained in the final prospectus and other documents which Peregrine has filed with Canadian securities regulatory authorities. These documents are available on SEDAR on www.sedar.com.

This news release does not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. The securities being offered have not been approved or disapproved by any securities regulatory authority.

No U.S. Registration

This news release does not constitute an offer to sell, or the solicitation of an offer to buy securities in any jurisdiction, including the United States. The securities offered under the Rights Offering will not be or have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or the securities laws of any state of the United States, and may not be offered or sold in the United States or to, or for the account or benefit of, any U.S. Person (as defined in Regulation S of the Securities Act) or person in the United States, unless an exemption from such registration requirements is available. Certain institutional accredited investors in the United States will be permitted to participate in the Rights Offering on a private placement basis upon satisfying the Company that they qualify for an exemption from the registration requirements of the Securities Act and any applicable securities laws of any state of the United States.

ABOUT PEREGRINE DIAMONDS

Peregrine is a diamond exploration and development company focused on Canada's North. The Company has discovered two new diamond districts in Nunavut, Nanuq in 2007 and Chidliak in 2008. At its 100 percent-owned Chidliak project, located 120 kilometres from Iqaluit, the capital of Nunavut, 67 kimberlites have been discovered to date with eight being potentially economic. An Inferred Mineral Resource of 7.47 million carats in 2.89 million tonnes of kimberlite at a grade pf 2.58 carats per tonne has been defined at the CH-6 kimberlite. In April 2013, Peregrine collected a bulk sample weighing 404.2 dry tonnes from CH-6. This sample returned a grade of 2.58 carats per tonne for diamonds larger than the 1.18 mm sieve size. An independent diamond valuation of the resulting 1,013 carat parcel of diamonds returned an average market price of US$213 per carat and modelled prices that ranged from a minimum of US$162 per carat to a high of US$236 per carat with a base model price of US$188 per carat.

At its 8,493 hectare Lac de Gras project in the Northwest Territories, located approximately 23 kilometres from the Diavik Diamond Mine, the nine hectare 72.1%-owned DO-27 kimberlite hosts a NI 43-101 compliant Indicated Mineral Resource of 18.2 million carats of diamonds in 19.5 million tonnes of kimberlite at a grade of 0.94 carats per tonne and it is open at depth. Peregrine also continues to evaluate earlier stage diamond exploration projects it controls in Nunavut and the Northwest Territories and through comprehensive evaluation of its extensive and proprietary diamond exploration databases, is working towards discovering additional new diamond districts in North America. A key asset being utilized in Peregrine's search for a new Canadian diamond district is a proprietary database acquired from BHP Billiton that contains data from approximately 38,000 kimberlite indicator mineral samples covering approximately three million square kilometres of Canada.

For information on data verification, exploration information and resource estimation procedures see the technical reports entitled, "2014 Technical Report for the Chidliak Project, 66° 21' 43" W, 64° 28' 26" N Baffin Region, Nunavut", and "Peregrine Diamonds Ltd. Lac de Gras Project Northwest Territories, Canada NI 43-101 Technical Report" both of which are available on SEDAR and the Company's website.

FORWARD-LOOKING STATEMENTS

This news release contains forward-looking statements within the meaning of Canadian securities legislation. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future including, without limitation, satisfaction of the conditions for the completion of the Rights Offering, commencement and success of the Rights Offering, approval for listing of securities issuable in connection with the Rights Offering on the Toronto Stock Exchange, statements relating to proposed exploration and development programs, funding availability, anticipated exploration results, grade of diamonds and tonnage of material, resource estimates, anticipated diamond valuations and future exploration and operating plans are forward-looking statements. These forward-looking statements reflect the current expectations or beliefs of the Company based on information currently available to the Company.

Forward-looking statements are made based upon certain assumptions by the Company and other important factors that, if untrue, could cause the actual results, performances or achievements of the Company to be materially different from future results, performances or achievements expressed or implied by such statements. Such statements and information are based on numerous assumptions regarding present and future business strategies and the environment in which the Company will operate in the future, including the Standby Purchase Agreement for the Rights Offering Agreement not being terminated, the price of diamonds, anticipated costs and ability to achieve goals. Certain important factors that could cause actual results, performances or achievements to differ materially from those in the forward-looking statements include, but are not limited to: receipt of regulatory approvals; anticipated timelines for community consultations and the impact of those consultations on the regulatory approval process; market prices for rough diamonds and the potential impact on the Chidliak Project; and future exploration plans and objectives.

Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements and, even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things, uncertainties relating to availability and cost of funds, timing and content of work programs, results of exploration activities, interpretation of drilling results and other geological data, risks relating to variations in the diamond grade and kimberlite lithologies; variations in rates of recovery and breakage; variations in diamond valuations and future diamond prices; the state of world diamond markets, reliability of mineral property titles, changes to regulations affecting the Company's activities, delays in obtaining or failure to obtain required project approvals, operational and infrastructure risk and other risks involved in the diamond exploration and development business. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to their inherent uncertainty.

Contact Information

  • Peregrine Diamonds Ltd.
    Mr. Eric Friedland
    CEO
    604-408-8880

    Peregrine Diamonds Ltd.
    Mr. Brooke Clements
    President
    604-408-8880

    Peregrine Diamonds Ltd.
    Mr. Tom Peregoodoff
    Executive VP, Business Development
    604-408-8880

    Peregrine Diamonds Investor Relations
    604-408-8880
    investorrelations@pdiam.com
    www.pdiam.com