De Beers Canada has entered into an agreement to acquire all the outstanding shares of Peregrine Diamonds Ltd., which owns the Chidliak diamond resource located in Canada’s Nunavut Territory, at a purchase price of C$0.24 per share, for a total cash consideration of C$107 million.

The Chidliak resource was discovered in 2008 and is located approximately 120 km northeast of Iqaluit on Baffin Island. A total of 74 kimberlite pipes have been identified at Chidliak, including the CH-6 and CH-7 pipes, which are the current focus of the Chidliak Phase One Diamond Development program. The program has a total Inferred Mineral Resource in excess of 22 million carats (ct). Peregrine’s recent Preliminary Economic Assessment for Chidliak points to the high quality of the CH-6 deposit in particular. An estimated grade of 2.41 ct per metric ton (ct/mt) and a diamond valuation of US$151/ct (equating to approximately US$360/mt) make CH-6 one of the most attractive undeveloped diamond resources in Canada. Peregrine also has exploration properties elsewhere in Nunavut and the Northwest Territories.

“This investment reinforces De Beers Group’s long-term commitment to Canada, following our investment in the Gahcho Kué diamond mine, which entered commercial production last year,” said Kim Truter, CEO, De Beers Canada. “Chidliak is a high value prospect and the Peregrine team has done great work to bring it to this advanced stage. 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.”

The transaction, which is expected to occur by a Plan of Arrangement in September, is conditional upon Peregrine security holders adopting a special resolution approving it and the Supreme Court of British Columbia also issuing a final order approving the Plan of Arrangement, as well as the satisfaction of other customary closing conditions.