Peregrine Metals Ltd. (TSE:PGM) (PINK:PTTDF) nearly tripled in price after the company revealed an acquisition proposal from Stillwater Mining Company (NYSE:SWC).
PGM added 221% on Monday and reached an all time high for the stock market valuation. The trading volume was the heaviest in the history of the stock at 21.15 million, far above the average turnover of 653 thousand.
Despite the heavy activity on the market, this is actually the end of Peregrine as an independent entity. In fact, this share price increase was a result of an upcoming acquisition. The company announced on July 11, 2011 the company will be acquired by Stillwater Mining Company.
For each share of Peregrine, SWC will pay $1.35 in cash and provide 0.08136 shares of its own common stock. That computes to a total PGM valuation of $3.28 per share, which should keep the market price close for the period until acquisition. The total purchase price will be $487 million, Stillwater will own 89.5% of the combined company.
Peregrine was so attractive because of their Altar porphyry copper-gold deposit in Argentina, which has measured and indicated copper resources of 7.4 million pounds and inferred resources of 4.3 billion pounds bother at 0.3% cut-off grade. The property also holds gold reserves computed at 1.5 million ounces of measured and indicated and 880 thousand ounces of inferred resources.
Stillwater plans to invest US$75 million over the course of 3 years to fully delineate the Altar resource and progress with the exploration of the property.
