Peregrine Diamonds divests stakes to fund exploration in Canada
Canadian diamond exploration and development company Peregrine Diamonds has signed a $10m financing agreement with Newstar Securities and the Dundee Corporation.
Under the terms of the agreement, Peregrine will offer Newstar and Dundee a total of 20 million shares, with a four-month hold period, at a cost of $0.50 a share.
Newstar will purchase 16.4 million shares and own 13.2% of the diamond company, while Dundee will purchase 3.6 million shares and own 18.1% stake in Peregrine on an undiluted basis.
The companies expect to close the deal before 3 November 2012, subject to approval from the Toronto Stock Exchange.
Peregrine chief executive officer Eric Friedland said, "We are delighted to have Robert Friedland join Ned Goodman as a significant strategic shareholder of Peregrine. Robert and Ned are two of the best mining financiers in the world and they will provide invaluable support as we continue to move forward with De Beers to confirm a diamond mine at Chidliak.
"This financing should provide Peregrine with the necessary working capital to fund its administrative costs and currently planned exploration initiatives through mid 2014, including the $2.5m payment due to BHP Billiton in that year."
Focused on northern Canada, Peregrine Diamonds fully owns the Chidliak project, which is located near Iqaluit in Nunavut state.
In September, DeBeers agreed to invest $5m in Peregrine for a 51% stake in the Chidliak project.