Capricorn Metals (ASX:CMM) agreed to acquire the Deadman Flat project tenements adjacent to its Karlawinda gold project in Western Australia from Peregrine Gold (ASX:PGD) for AU$1.5 million worth of shares, according to a Thursday filing with the Australian bourse.

Further consideration includes the grant of a 1% net smelter royalty on the sale of all precious minerals and a 1.5% net smelter royalty on the sale of non-precious minerals from the project area, the filing said.

The company also agreed to make contingent deferred payments of AU$750,000 upon the announcement of a JORC-compliant mineral resource estimate of at least 200,000 ounces of gold on the project tenements and upon the board's decision to start a stand-alone commercial mining operation.

The acquisition is anticipated to be completed in February, according to the filing.

Peregrine Gold's shares climbed more than 3% in recent Thursday trade.