Peregrine to acquire Kettle River

Peregrine Diamonds (PGD-T) is boosting its stake in the WO diamond project in the Northwest Territories and, in turn, the DO-27 pipe by merging with Kettle River Resources (KRR-V, KRRSF-O).

Shareholders of Kettle River will receive one common share of Peregrine in exchange for every five shares held. Kettle River currently has 11.3 million shares outstanding or 13.3 million on a fully diluted basis. Peregrine has locked up the support of Kettle River’s directors, officers and various shareholders representing a 30% stake. The deal is subject to approval by Kettle River shareholders, as well as court and regulatory approval, all of which is expected to occur on or before January 31, 2007.

Kettle River’s primary asset is its one-third ownership of DHK Diamonds, a private company that owns a 20% participating interest in the WO joint-venture project in the Northwest Territories. Peregrine is the operator of that project and currently owns a 54.47% interest. The planned merger with Kettle River will increase its position to 61.14%. In addition, Peregrine will inherit a first right of refusal on the sale of the remaining two-thirds ownership of DHK Diamonds held equally by Dentonia Resources (DTA-V, DRSEF-O) and Horseshoe Gold Mining (HSX-V, HSSHF-O).

“Consolidation of the various WO diamond project joint-venture interests ultimately benefits shareholders and the project,” said Peregrine president Eric Friedland in a statement. “We are confident that this process will continue.”

The other WO joint-venture partners include: Archon Minerals (ACS-V, AHNMF-O), with a 13.27% interest; Aber Diamond (ABZ-T, ABER-Q), with 7.35%; and SouthernEra Diamonds (SDM-T, SDMFF-O), with 4.9%.

The WO property centres on the DO-27 and DO-18 kimberlite pipes that comprise the infamous Tli Kwi Cho kimberlite complex. The joint-venture partners are advancing the project through scoping level studies, with an aggressive bulk-sampling drilling campaign planned for this winter.