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Advancing Baffin Island diamonds
Peregrine Diamonds ramps up for big winter drill at Chidliak

Walter Strong
Northern News Services
Published Saturday, December 13, 2014

QIKIPTANI/BAFFIN ISLAND
Peregrine Diamonds Ltd. (TSX:PGD) may be sitting on one of the most valuable undeveloped diamond deposits in the world, so it may come as little surprise that the company was able to raise more than $15 million in its most recent rights offering.

NNSL photo/graphic

Custom-made large diameter drilling equipment made it by sealift to Iqaluit and sits ready for deployment to Peregrine Diamond's 2015 Chidliak diamond property east of Iqaluit. - photo courtesy Peregrine Diamonds Ltd.

The money is earmarked for further advancing Peregrine's Chidliak deposit, located approximately 120 km east of Iqaluit.

The past year was a good one from Peregrine. In 2013, a 404-tonne bulk sample returned a grade of 2.58 carats per tonne for diamonds larger than 1.18 mm. Last February, a 1,013 carat parcel of diamonds from that sample was sent for valuation and returned an average market price of USD $213 per carat on a range of valuations from $162 per carat to $236 per carat.

Peregrine's published inferred mineral resource is 7.47 million carats at that grade, and in only one of at least eight kimberlites identified as potentially economic.

Compared to existing and advancing diamond projects in the North, all in the NWT, that is a good balance of grade and value.

In comparison, the De Beers Snap Lake diamond mine produced 1.3 million carats last year at a grade of 1.15 carats per tonne, with average valuations of USD $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.

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.

Peregrine looks like it is in good company in terms of grade and carat valuation.

"For this one kimberlite, it's one of the higher grade kimberlites in the world," said Peregrine President Brooke Clements.

"Diamond valuations are very good, above average."

Clements expects this winter's large diameter drilling program to begin before the end of February. A 40-person camp will support bulk sampling from the three "phase one" kimberlites (CH-6, CH-7, and CH-44), and will return over 1,000 tonnes of kimberlite ore.

The ore will stand in Iqaluit until a July 2015 sealift for transport to Montreal for processing.

Peregrine has already taken delivery in Iqaluit of 421 tonnes of equipment for this winter's drill program, including a custom made large diameter reverse circulation drill. The machine can drill up to 26-inch diameter, making relatively quick work of collecting the bulk sample.

Clements expects most drilling to be on the less well defined CH-7 and CH-44 kimberlites, with further work at CH-6 to expand the resource base there.

Depending on the results of 2015 work, Clements expects Peregrine to be in a position to release a maiden resource on CH-7 and CH-44, and possibly be a preliminary economic assessment of Chidliak's potential for a diamond mine, in 2016.

In the meantime, revised tonnage estimates for CH-7 and CH-44 and a new estimate of the CH-6 resource, are expected in January 2015, based on the 2014 work program.

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