Peregrine Gold Locks In A$1.5M in Capricorn Shares, Keeps Royalties on Deadman Flat Sale

• Sale of Deadman Flat and Perry Creek Project to Capricorn Metals for A$1.5 million in shares
• Up to A$1.5 million in contingent milestone payments tied to resource and mining milestones
• Retention of 1% NSR royalty on precious minerals and 1.5% on non-precious minerals
• Transaction contingent on a 14-day due diligence period
• Proceeds to support Peregrine’s exploration efforts at the Tin Can Trend

Strategic Sale to Capricorn Metals

Peregrine Gold Limited (ASX: PGD) has formalised an agreement to sell its Deadman Flat and Perry Creek Project to Capricorn Metals Limited (ASX: CMM), marking a significant step in Peregrine’s portfolio management. The upfront consideration comprises A$1.5 million in Capricorn shares, providing Peregrine shareholders with direct exposure to a leading ASX-listed gold producer.

The transaction is structured to include contingent milestone payments totaling up to A$1.5 million, payable upon Capricorn delineating a JORC-compliant resource of at least 200,000 ounces of gold and upon a board decision to commence commercial mining operations. Additionally, Peregrine retains a net smelter royalty (NSR) of 1% on precious minerals and 1.5% on non-precious minerals extracted from the tenements, preserving long-term upside potential.

Project Location and Significance

The Deadman Flat and Perry Creek tenements lie at the southern extent of Peregrine’s Newman Gold Project, adjacent to Capricorn’s Karlawinda Gold Project. This proximity to an established gold operation underscores the strategic value of the assets and the potential for Capricorn to integrate and expand its regional footprint.

While the Deadman Flat and Perry Creek areas have seen limited drilling, their geological setting within the Sylvania South Gold Trend and near the Tin Can Trend offers promising exploration upside. Peregrine’s decision to divest these assets aligns with its intent to sharpen focus and resources on advancing discoveries along the Tin Can Trend, where recent exploration has shown encouraging results.

Financial and Operational Implications

The deal is subject to a 14-day due diligence period, after which completion is expected within five business days. The issuance of Capricorn shares as upfront consideration not only provides Peregrine with immediate liquidity but also aligns its interests with Capricorn’s future success on the acquired tenements.

Technical Director George Merhi highlighted the transaction’s dual benefits: enhancing Peregrine’s balance sheet while maintaining exposure to exploration success through royalties and milestone payments. This financial flexibility is timely, coinciding with a near-completion non-renounceable entitlement issue aimed at bolstering funds for ongoing exploration.

With gold prices near record highs, Peregrine’s strategic repositioning could enable accelerated discovery efforts and potentially unlock value for shareholders through both direct exploration and indirect exposure via Capricorn.

Looking Ahead

As Peregrine pivots towards the Tin Can Trend, investors will be watching closely for updates on exploration progress and milestone achievements by Capricorn on the Deadman Flat and Perry Creek tenements. The retained royalties ensure Peregrine remains a stakeholder in any future success, while the capital injection supports its broader growth ambitions.

Bottom Line?

Peregrine’s sale to Capricorn is a savvy move that balances immediate capital gains with long-term exposure to gold exploration upside.

Questions in the middle?

• Will Capricorn Metals meet the resource and mining milestones to trigger contingent payments?
• How will Peregrine allocate the proceeds from this sale to accelerate Tin Can Trend exploration?
• What exploration results can investors expect from Capricorn’s new tenure at Deadman Flat and Perry Creek?