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Peregrine Diamonds Ltd. (TSX:PGD) ("Peregrine" or "the Company") is pleased to announce that it has entered into an arrangement agreement (the "Arrangement Agreement") with De Beers Canada Inc. ("De Beers") under which De Beers will acquire all of the Company's outstanding common shares for $0.24 per share in cash or a total equity value of approximately $107 million pursuant to a plan of arrangement (the "Arrangement") under the Canada Business Corporations Act. The transaction represents a 50% premium to Peregrine's share price of $0.16 on July 18, 2018, and a premium of 44.5% to the volume weighted average price of the shares for the 20-trading days ended July 18, 2018. The Board of Directors of Peregrine (the "Board"), after consultation with financial and legal advisors, and based on the recommendation of a special committee of the Board consisting of three independent directors, has unanimously determined that the Arrangement is in the best interests of the Company, has approved the Arrangement Agreement and the Arrangement and recommends that Peregrine's shareholders, as well as its optionholders and warrantholders, vote in favour of the Arrangement. All directors and officers of the Company as well as Messrs. Eric Friedland and Robert Friedland, the Company's two major shareholders who collectively control 42.8% of the issued and outstanding common shares (and 42.2% of the issued outstanding common shares, options and warrants), have entered into voting and support agreements to vote their common shares in support of the Arrangement. Benefits to Peregrine's Shareholders: • Immediate and attractive premium of approximately 50% to spot and 44.5% based on the 20-day VWAP. • All cash offer that is not subject to a financing condition. • Secures immediate value appreciation, eliminating technical and financial risks and the burden of future dilution involved in advancing the Chidliak project as a standalone publicly-traded company. Eric Friedland, Peregrine's Founder and Executive Chairman, commented: "The De Beers Canada offer delivers immediate liquidity to Peregrine's shareholders at an attractive premium that recognizes the current value of Chidliak and provides shareholders certainty through an all-cash offer. Further, it eliminates the substantial equity dilution, and project and market risks to advance Chidliak to bankable feasibility and, if warranted, to commercial production. This offer is the result of a comprehensive review process of our options to advance Chidliak towards development. The Board unanimously agrees that this offer represents the best path forward available to Peregrine's shareholders and recommends that shareholders vote in favour of this transaction." Kim Truter, CEO, De Beers Canada, said; "The Peregrine team has done outstanding work progressing the Chidliak project, demonstrating its quality and high potential. With our extensive De Beers Group operating experience in similar Canadian arctic environments and employing innovative mining methods, we believe we are very well positioned to develop this resource further. We are delighted to be extending our business presence in Canada to the Nunavut Territory and look forward to working with all community and government partners as we progress the project." Tom Peregoodoff, Peregrine's President and CEO, added; "It is very gratifying to see that the work accomplished by the team at Peregrine is being recognised by De Beers. We have consistently stated that Chidliak holds significant diamond mine development potential and this transaction is an excellent outcome for the Company's stakeholders, including shareholders, community members and the territory of Nunavut. The transaction ensures the next steps in mine development are taken by a world-class operator with recognized arctic mine development and operational experience, and ensures stakeholders will benefit from responsible development of this rare and unique diamond resource." Arrangement Agreement The Arrangement Agreement is subject to customary non-solicitation provisions, including Peregrine's right to consider and accept unsolicited superior proposals that may be submitted by third parties. In the event of a superior proposal, De Beers will have a ten business day right to match the superior proposal. If the Arrangement is not completed as a result of a superior proposal, the Company will be required to pay De Beers a termination fee equal to $5,000,000. The closing of the Arrangement is subject to the approval of at least (i) two-thirds of the votes cast on a resolution to approve the Arrangement (the "Arrangement Resolution") by shareholders at a special meeting to be called to consider the Arrangement (the "Meeting"), and (ii) two-thirds of the votes cast on the Arrangement Resolution by shareholders, optionholders and warrantholders of the Company voting as a single class at the Meeting. Closing of the Arrangement is also subject to certain other customary closing conditions, including court and applicable regulatory approvals and the absence of any material adverse effect with respect to the Company. The transaction is expected to close in September, 2018. Further information regarding the transaction will be included in the Company's management proxy circular to be mailed to Peregrine's shareholders and other securityholders in advance of the special meeting of securityholders, which is expected to be held on or around August 31, 2018, and in the Company's material change report in respect of the announcement of the transaction, each of which will be filed with the Canadian securities regulators and will be available on SEDAR at www.sedar.com. The Board has obtained a fairness opinion from RBC Capital Markets that, as of the date of the opinion, and subject to the assumptions, limitations and qualifications on which such opinion is based, the consideration to be received by the Company's shareholders pursuant to the Arrangement Agreement is fair, from a financial point of view, to the Company's shareholders. Financial and Legal Advisors RBC Captial Markets is acting as financial advisor to the Company.
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