QIKIPTANI/BAFFIN ISLAND
Following last year's drilling program, Peregrine Diamonds Ltd. (TSX:PGD) has updated resources on three kimberlites (CH-6, CH-7, CH-44) located on the company's Chidliak property, approximately 120 km east of Iqaluit.

A snow-ski equipped DC-3 comes in for a landing near Peregrine Diamond's Chidliak property. The company is reporting almost 15 per cent more carats in one kimberlite as the company begins its 2015 drill program. - photo courtesy Peregrine Diamonds Ltd.

The property's most well understood kimberlite -- CH-6 -- has had inferred mineral resources bumped to 8.57 million carats in 3.32 million tonnes of ore for a grade of 2.58 carats per tonne.

That is up by almost 15 per cent over the previous estimate of 7.47 million carats.

"It is important to note that all of the resource expansion at CH-6 was near surface, above 120 metres depth," said Brooke Clements, Peregrine Diamonds president.

Peregrine stock climbed by almost 43 per cent in the days following the news, closing at $0.20 per share by last Thursday.

Peregrine is reporting increased ore tonnage across the three kimberlites as well. Total ore tonnage between the three kimberlites to a depth of 380 metres is now estimated to be between 8.19 million tonnes and 13.58 million tons. This is up from between 6.51 to 9.49 million tonnes previously estimated.

Although increased tonnage does not necessarily mean more carats, it does mean the three main targets at Chidliak are fatter than previously understood.

"We think it is an indication of the broader potential of the Chidliak project as well, as we believe there are other kimberlites with good potential that could get upgraded with more drilling and there is still the potential to make new discoveries," Clements said.

"This is important to us because advancing CH-44 and CH-7, along with CH-6 will be the primary focus at Chidliak over the next year."

The update on CH-6 was thanks to more than 1,500 metres of drilling last year.

At 2.56 carats per tonne, CH-6 is one of the highest grade, undeveloped kimberlites in the world. A diamond valuation was completed last year on an approximately 1,000-carat parcel of diamonds from CH-6, returning an average diamond price of US $213 per carat, with the floor at $163 per carat and the ceiling at $236 per carat.

This grade valuation compares favourably with the grades at existing diamond mines in Canada.

The De Beers Snap Lake diamond mine produced 1.3 million carats in 2013 at a grade of 1.15 carats per tonne, with average valuations of US $186 per carat.

Existing reserves and indicated resources at the Ekati Diamond mine grade 1.2 carats per tonne. According to the most recent quarterly statement, diamonds from Ekati have fetched, on average, $324 per carat.

The Jay pipe extension at Ekati is graded at 1.9 carats per tonne in 45.6 million tonnes of ore, with 84.6 million carats in reserves.

At the Diavik diamond mine, existing diamond reserves are graded at 2.9 carats per tonne and have been selling at up to $190 per carat according to the most recent Dominion Diamond Corporation quarterly report.

The De Beers-Mountain Province Gahcho Kue diamond mine is being built based on a reserve statement of 55.5 million carats at a grade of 1.57 carats per tonne. Diamond valuations at Gahcho Kue range between $88 and $298 per carat, for an average valuation of $174 per carat.

A winter bulk sample program is already underway on the property, with large diameter drilling expected to begin in March.

Peregrine expects to collect approximately 1,000 tonnes of kimberlite ore from the three kimberlites covered here in support of a further resource definition and to produce diamond parcels for valuation.

The company is working toward a preliminary economic assessment in 2016. Late in December, Peregrine raised $2.2 million in a private placement.