Canadian Peregrine Diamonds released a statement this week that it will acquire Botswana focused junior explorer Diamond Exploration Strategies (Diamexstrat), which owns eight prospecting licences in Botswana.
“The purchase agreement transfers Diamexstrat to Peregrine in consideration for a 1 percent gross overriding royalty to owner Diamond Exploration Strategies (DES UK) Ltd. In addition, Peregrine will assume a $450,000 loan, which it advanced to DES Botswana,” the statement reads.
The deal allows Peregrine to buy out the royalty provisions at various milestones. Peregrine can pay $2 million if within 60 days of the discovery of a diamondiferous kimberlite, as defined by confirmation of the presence of microdiamonds or recovery of macro diamonds in drill core/percussion chips; or $5 million if within 60 days of delivery of pre-feasibility study; or $7.5 million if within 60 days of positive construction decision.
The statement further reads: “If Peregrine decides┬áto not┬ápursue exploration on any of the licenses, the title for those licenses revert to DES UK and Peregrine shall be granted a 1 percent gross overriding royalty with the same buy-out provisions.”
The statement further revealed that as part of the transaction, DES UK will enter into a services agreement with Peregrine under which it will┬áprovide Botswana-based operational management. The transaction deal which took place earlier this week was closed on April 15.