De Beers to purchase Peregrine Diamonds

Peregrine Diamonds discovered these diamonds in 2013 at its Chidliak property between Iqaluit and Kimmirut. On July 19, the company announced that De Beers Canada plans to acquire Peregrine for $107 million. (FILE PHOTO)

De Beers Canada is on track to buy Peregrine Diamonds for $107 million.

Since 2003, Peregrine has explored its Chidliak property, about 120 kilometres northeast of Iqaluit, in an effort to prove up how many diamonds may be found beneath the ground.

The purchase agreement announced today, which would give Peregrine’s shareholders a 50 per cent premium on their share prices, means this property would be controlled by a major diamond producer, one with the deep pockets required to build a mine.

De Beers Canada currently operates the Victor Mine in northern Ontario and the Gahcho Kué Mine in the Northwest Territories.

A news release issued by De Beers calls Chidliak “one of the most attractive undeveloped diamond resources in Canada.”

“The Chidliak resource holds significant development potential and will be an exciting addition to our portfolio,” said Bruce Cleaver, CEO of De Beers Group, in the news release.

“With a strong outlook for consumer demand, we are seeking new opportunities to invest in our future supply potential and look forward to growing our portfolio in Canada and working with community partners in the Nunavut Territory as we further develop the project.”

Eric Friedland, the founder and executive chairman of Peregrine Diamonds, hailed the proposed takeover as “the next step in the development of the Chidliak diamond project.”

“The team at Peregrine has done an outstanding job advancing Chidliak to this stage and it is particularly gratifying that the quality of the diamond resource we have defined is recognized by the world’s premier integrated diamond company,” he said. “All stakeholders will benefit from this transaction and the involvement of De Beers as Chidliak advances toward development.”

Peregrine currently estimates the property contains 22 million carats.

In 2016, the company estimated that an operating mine at Chidliak could create between 275 and 325 jobs. The mine’s lifespan was estimated at that time to be 10 years.

Peregrine’s board of directors has unanimously recommended the agreement, which still must be approved by the company’s security holders.