BHP Billiton said Tuesday that it has agreed to sell its 51 per cent interest in the Chidliak diamonds exploration project on Baffin Island, Canada to Peregrine Diamonds. The agreement follows an assessment of the project as part of BHP Billiton’s review of its Diamonds business and will give Peregrine, the operator, 100 per cent ownership of Chidliak.
Chidliak is a diamonds exploration project located on South East Baffin Island in Nunavut, Canada. The property consists of 860,000 hectares about 140 kilometres from Iqaluit. Chidliak is a joint venture partnership between BHP Billiton (51 per cent) and Peregrine Diamonds Ltd. (49 per cent) and has been operated by Peregrine since 2006.
Under the terms of the binding agreement, Peregrine will pay BHP Billiton C$9 million over three years and grant BHP Billiton a two per cent royalty on future production from Chidliak.
BHP Billiton Diamonds and Specialty Products President Tim Cutt said: “We are pleased to sell our interest in Chidliak to its natural owner. Peregrine has been a good partner and we believe they are a strong operator that is well positioned to advance this promising exploration opportunity.”
The parties have agreed to complete the transaction by 31 January 2012.
The review of BHP Billiton’s interest in EKATI is ongoing. BHP Billiton will only pursue those options that will preserve EKATI’s outstanding safety and environmental standards and protect the benefits that the mine has created for local communities. Potential transactions arising from the review will be subject to detailed analysis before a final decision is made. In the event that its criteria are not met, BHP Billiton will continue to operate EKATI in a sustainable manner.