IQALUIT
Gold may be paying the bills for Nunavut’s only producing mine at the moment, but a new diamond district may be on the horizon just 120 km northeast of Iqaluit on Baffin Island.

A selection of eight diamonds from Chidliak's kimberlite CH-6 bulk sample. The largest stone weighs 8.87 carats and was valued at more than U.S. $36,000 the smallest is 0.22 carats. Peregrine Diamonds Ltd., the 100 per cent owner of the property, is currently drilling in anticipation of a large bulk sample program for 2015. - photo courtesy Peregrine Diamonds Ltd.

Canadian diamond exploration company Peregrine Diamonds Ltd. (TSX:PGD) is only halfway through this season’s Chidliak work program, but has already released some promising updates.

Work so far this season has included 2,250 kilometres of ground geophysical surveying, portable heli-drilling of select targets, and preparations for extensive drilling, now underway, to further develop the resource potential of three kimberlite pipes on the property: CH-6, CH-7, and CH-44.

Work this season so far, coupled with updated results from previous sampling, are generating promising results.

Earlier this year, diamond valuation of a 404 tonne bulk sample from CH-6 showed promise. The sample contained U.S. $215,605 worth of diamonds, including a single 8.87 carat diamond worth more than U.S. $36,000.

By June 19, Peregrine filed its Canadian NI 43-101 national standard compliant inferred resource estimate for CH-6, making its bulk sample numbers official. It showed 7.47 million carats of diamonds contained within 2.89 million tonnes of kimberlite over a depth of 250 metres.

At 2.58 carats per tonne - with an average diamond valuation of U.S. $213 per carat - this puts Chidliak’s potential on par with what producing diamond mines in the NWT are pulling out of the ground.

“It’s one of the highest grade kimberlites in the world as far as carats per tonne,” said Brooke Clements, president of Peregrine Diamonds. “Diavik… is really the only project in Canada that has higher grades than Chidliak.”

“With more drilling, some of which we’re doing this summer, we are working to increase that resource (estimate).”

On June 26, Peregrine presented updated diamond results based on smaller sample sizes from four other kimberlite pipes, showing up to one carat per tonne on CH-7 and 0.6 carats per tonne on CH-44.

Peregrine is confining itself to the top 250 metres or so of kimberlite.

The results showed that CH-6 could have up to 3.47 million total tonnage, CH-7 could have up to 3.97 million tonnage, and CH-44 could have up to 2.05 million tonnes.

This summer, workers at Chidliak will also be doing prep work for next year.

“This summer we will be drilling CH-7 and CH-44 to prepare those kimberlites for bulk sampling by large-diameter drilling next winter,” Clements said.

Next year’s bulk-sampling program is essentially already underway. Peregrine has commissioned customizations to a large diameter drilling rig that will ready it to drill 24 inch diameter holes allowing 75 tonnes of kimberlite to be collected per 100 metres of drilling. Other equipment - transport vehicles, water tanks and fuel tanks - are also being purchased or fabricated.

The custom drilling rig, along with all required support equipment and vehicles, are expected to ship to Iqaluit this fall by sealift.

Once bulk sampling is complete next year, resource reports are expected on kimberlites CH-7 and CH-44 should be ready before the end of 2015.

The Chidliak diamond project is staked out within 748,000 square kilometres of land Peregrine first started prospecting in 2005.

By 2011, more than $14 million had been spent on developing the project through prospecting, drilling and bulk sampling – most of which came from BHP Billiton. In total, 67 kimberlite pipes were discovered on the property, with at least eight showing significant economic diamond potential.

Peregrine became the 100 per cent owner of the property when it bought out BHP Billiton in 2011. In 2012, Peregrine closed a joint-venture option agreement with De Beers Canada, but De Beers declined to exercise that option the following year, citing challenging market conditions.

Peregrine then raised $6.5 million in private investment in 2013. When the company began work at Chidliak earlier this year, Clements pegged the company’s total expenditures at $7 million.

Approximately 25 people will be working on the Chidliak site for the rest of the summer now that the drilling crew has arrived.