Peregrine Diamonds Ltd. (TSX:PGD) has entered into a binding agreement to buy BHP Billiton’s 51% share of the Chidliak diamond project.
The $9 million purchase gives Peregrine 100% ownership in the Baffin Island-based venture.
The transfer also entitles Peregrine to 100% of the diamond marketing rights.
BHP Billiton will receive a 2% royalty on Chidliak’s mineral production. If BHP Billiton decides to sell any of its royalty to a third party, Peregrine has a right to match any offer made. Peregrine will also acquire BHP Billiton’s Canadian regional diamond exploration database.
Peregrine’s royalty obligations to BHP Billiton will be terminated, including those related to the Nanuq property in Nunavut and the TW property in the Northwest Territories.
Peregrine president Brooke Clements said the development is very positive for both Peregrine and the Chidliak project.
“It allows us complete flexibility on how we move forward now that we have 100%,” said Clements. “It gives us the option to bring in a partner if we so choose, and it gives complete control on the forward path of Chidliak.”
The transaction is expected to close on or before January 31, 2012.
At press time, Peregrine’s share value was unchanged at $0.60.
Emma Crawford