Peregrine Diamonds Ltd. received positive news on Wednesday when BHP Billiton Ltd., the world’s biggest mining company, decided to keep participating in its Chidliak diamond project in Nunavut. BHP will continue to hold 51% of the partnership, while Peregrine retains 49%.
Dundee Capital Markets analyst Randy Cooper called the move a “vote of confidence” in the project from BHP. He noted that Peregrine was also nominated as operator of the 2011 work program, “highlighting BHP’s confidence in the Peregrine Diamonds team.”
Peregrine will retain 49% of the marketing rights to the diamonds from Chidliak. This is strategically important in the long term as those rights can be use to develop a vertically integrated company, Mr. Cooper noted.
BHP could have raised its stake another 7% by funding the project all the way to a bankable feasibility study, but chose not to. Instead, each partner will fund their share of the budget.
