De Beers has signed a pact to acquire Vancouver-based junior Peregrine Diamonds as the major looks to expand its Canadian business with the addition of the Chidliak project in Nunavut.
The C$107 million deal has been unanimously recommended by Peregrine’s board of directors to Peregrine shareholders with some 44 % of investors already agreeing to vote ‘for’ the transaction.
The Chidliak resource was discovered in 2008 and is located around 120 km northeast of Iqaluit, Baffin Island. A total of 74 kimberlite pipes have been identified, including the CH-6 and CH-7 pipes, which are the current focus of Peregrine’s Chidliak phase one development programme. This programme has an inferred resource in excess of 22 million carats.
Peregrine’s recent Chidliak preliminary economic assessment pointed to the high quality of the CH-6 deposit, in particular, according to De Beers.
“An estimated grade of 2.41 carats per tonne and a diamond valuation of US$151 per carat (equating to approximately US$360 per tonne) make CH-6 one of the most attractive undeveloped diamond resources in Canada,” De Beers said.
Peregrine also has exploration properties in Nunavut and the Northwest Territories.
Bruce Cleaver, CEO of De Beers Group, said: “The Chidliak resource holds significant development potential and will be an exciting addition to our portfolio.”
A strong outlook for consumer demand is leading the company to look at opportunities to invest in its future supply potential and boost its Canada portfolio, he added.
Kim Truter, CEO of De Beers Canada, said: “With the transformation of our company in Canada over the past two years, our focused investment in new and innovative mining methods, and our expertise in Canada’s arctic environments, we believe we are very well positioned to now develop the resource further.”
De Beers already operates the Gahcho Kué diamond mine in the NWT, which started commerical production last year and is expected to produce 54 million carats of rough diamonds over its lifetime.
The company, also, in March, signed an agreement with Mountain Province Diamonds (MPD) to incorporate all of properties owned by Kennady Diamonds – and purchased by MPD via a takeover of Kennady –into the Gahcho Kué joint venture, currently owned 51:49 by De Beers and MPD.
Completion of the deal is expected in September, subject to several conditions.