Toronto Stock Exchange listed Peregrine has sold its diamond interest in Botswana to UK’s Diamond Exploration Strategies (DES).
The company announced that it has entered into an agreement to transfer all of the shares of Diamexstrat Botswana, a 100%-owned subsidiary of Peregrine engaged in diamond exploration and development in Botswana to DES.
DES’s primary assets are diamond prospecting licences, covering 6,615 km2 in Botswana.
The transaction is expected to close upon receipt of all required regulatory approvals.
“We still believe strongly in the diamond discovery potential of Botswana, and this transaction allows us to maintain our focus on our primary asset – Chidliak in Canada – while continuing to give us exposure to the 60 plus years of combined diamond exploration experience in Botswana that the principals of DES UK possess, and any exploration success that they have in the future,” said Tom Peregoodoff, Peregrine’s President and Chief Executive Officer.
Under the agreement Peregrine will be granted a 1% gross overriding royalty on revenue from the sale of production from any mineral properties held or acquired by DES Botswana in agreed target areas, including the existing mineral properties.
In addition to the royalty, DES UK has granted to Peregrine a right of first refusal, whereby, should DES UK or DES Botswana propose to sell or transfer any mineral property or licence that forms a part of the agreement to a third party, Peregrine shall have a right of first refusal to acquire any such property or licence for the same consideration as offered by the third party.
The right of first refusal extends to joint ventures or other participation or financing arrangements with a third party.