Peregrine Diamonds Ltd. ("Peregrine" or "the Company") is primarily focused on diamond exploration and development in Canada. Since 2007, the Company has discovered two new Canadian diamond districts, Chidliak on southern Baffin Island and Nanuq in the eastern Arctic region. In addition, Peregrine has established an indicated mineral resource of 18.2 million carats in the DO-27 kimberlite in the Northwest Territories and early stage exploration projects in the Northwest Territories, Baffin Island in Nunavut and Manitoba. In its search for diamonds, the Company has a secondary focus on exploration for metals deposits.
Industry experts predict that without significant new discoveries in the coming years, the global demand for diamonds will soon outstrip supply. Through its quality diamond exploration projects throughout Canada and its 72 percent ownership interest in the DO-27 mineral resource, Peregrine is well positioned to contribute to the world's diamond supply in the future.
In the summer of 2008, Peregrine established a new Canadian diamond district with the discovery of three diamond-bearing kimberlites at surface on the 9,800 square kilometer Chidliak property ("Chidliak") on Baffin Island, Nunavut.. A 2.28 tonne sample collected from one of these kimberlites, CH-1, in 2008 returned a diamond content of 1.56 carats per tonne for diamonds larger than the 0.85 mm sieve size. A 2.01 carat, gem quality diamond was recovered from the sample. Information regarding these discoveries and diamond results are available in the news section of the Peregrine Diamonds website.
In November of 2008, BHP Billiton elected to exercise its earn-in rights at Chidliak. Under the terms of the agreement, they can earn a 51 percent interest by funding five times the exploration expenditures that were incurred by Peregrine before November, 2008, over a period of five years, with minimum annual expenditures of $5 million.
The $9.2 million 2009 Chidliak exploration programme was fully funded by BHP Billiton and commenced in April with the mobilization of equipment and supplies and completion of a ground geophysics programme. Drilling commenced in July and was completed in early September. Drilling and prospecting throughout the summer resulted in the discovery of 13 new kimberlites, bringing the total number of kimberlites discovered to date to 16. Fifteen of the 16 kimberlites discovered to date are diamondiferous and diamond counts in seven kimberlites indicate further work is required to assess their size, geology and diamond grade potential. Peregrine also collected a 50 tonne mini-bulk sample from an outcrop at the CH-1 kimberlite and results from this sample are expected in early 2010. Planning has begun for the $13.5 million 2010 Chidliak exploration programme which will be fully funded by BHP Billiton and is currently scheduled to commence in April with the drilling of lake-based geophysical anomalies.
In 2007, Peregrine discovered three diamondiferous kimberlites on the Nanuq property ("Nanuq"), in the eastern Arctic region of Nunavut, establishing another new Canadian diamond district. Goals established for the $1.5 million 2009 Nanuq exploration programme, which commenced in July, include increasing the kimberlite indicator mineral sample density and the field checking of priority geophysical anomalies. Results from this programme are expected in late 2009 and early 2010. Interpretation of these results will assist in planning the details of a drill programme that is currently scheduled to commence in the spring of 2010.
In 2008, Peregrine, Indicator Minerals Inc. and Hunter Exploration Group discovered the diamondiferous NQN-001 kimberlite on the 33,000 hectare Nanuq North property, just north of Nanuq. NQN-001 is situated approximately 17 kilometres north of the three kimberlites at Nanuq, Naturalik, Kayuu and Tudlik. The estimated minimum size of NNQ-001 is 4.5 hectares. This discovery increased the size of the diamond district and is a further illustration of the excellent exploration potential at Nanuq.
Also in Nunavut, reconnaissance-scale exploration programs conducted on Baffin Island in 2006 and 2007 led to the acquisition of prospecting permits that currently cover approximately 569,000 hectares in two property areas, Kimmirut and Flint Lake. Metals anomalies have been identified on these permits and deposit targets include uranium, copper-lead-zinc and gold. In early 2009, Peregrine acquired closet to 1.3 million hectares of prospecting permits bordering the Chidliak property. These permits constitute the Qilaq project. Qilaq is 100 percent owned by Peregrine and other than a one kilometer area around the outer perimeter of Chidliak, is not encumbered by any option or earn-in rights. In 2009, Peregrine initiated a till sampling programme at Qilaq to evaluate the property's diamond and metals potential. The geologic features of Qilaq and its proximity to Chidliak make it an ideal diamond exploration target.
The Company has a 72% interest in the 15,000 hectare WO property, located in the Northwest Territories in the Lac de Gras district, approximately 25 kilometres southeast of the Diavik Diamond MineTM. The DO-27 kimberlite is located on the WO property and it hosts an indicated mineral resource of 18.2 million carats of diamonds in 19.5 million tonnes of kimberlite with a grade of approximately 94 carats per hundred tonnes. The resource estimate was prepared by AMEC Americas Ltd. A diamond parcel of over 2,075 carats was valued in 2007 and the average modelled diamond value for the parcel ranged from US$43 to US$70 per carat. Although Peregrine management has concluded that the development of the DO-27 project is currently not economically justifiable, the Company believes that there is a reasonable chance that DO-27 could support a mining operation in the future.
In addition to the WO property Peregrine holds various interests in three exploration properties in the Northwest Territories, namely Pellat Lake, Lac de Gras East and Lac de Gras West.
