- Projects
Chidliak- Other Baffin Island Projects
- • Qilaq
- • Uranium Anomalies
- Eastern Arctic
- • Nanuq
- • Nanuq North
- Lac de Gras Area
- • Lac de Gras East
- • Lac de Gras West
- • Pellatt Lake
- • WO Property (DO-27)
- Manitoba
- • Crosswell River
Baffin Island
Baffin Island, Nunavut
Peregrine has acquired Prospecting Permits totalling over 2.7 million hectares in six properties in the Baffin Island region of Nunavut, Canada. (Click here to view the location map) The four properties are: Chidliak, Qilaq, Kimmirut and Flint Lake.
Reconnaissance heavy mineral sampling programs conducted by Peregrine and BHP Billiton in 2005 and 2006 throughout southern and central Baffin Island resulted in the recovery of significant kimberlitic indicator minerals including highly prospective eclogitic and pyrope garnets, some with compelling G10 chemistry and fresh surface textures. The indicator mineral chemistry and surface textures suggested the possibility of kimberlites within the boundaries of the Chidliak property area. In July 2008, Peregrine discovered its first kimberlite on Baffin Island on the Chidliak property, 700 km from the nearest known kimberlite occurrence which is in Greenland.
In the course of diamond exploration programs on Baffin Island, significant anomalies indicative of uranium and other metals deposits have also been confirmed.
Chidliak Property
Discoveries of high concentrations of kimberlitic indicator minerals ("KIMs") on the 980,000 hectare Chidliak property in 2006 and 2007 encouraged Peregrine to look for new kimberlite deposits in the area due to the excellent potential for further diamond discovery. The property is located 150 km northeast of Iqaluit, capital of Nunavut. Three distinct and well-defined KIM anomalies situated 20 to 30 km apart were identified. Peregrine collected a total of 970 till samples at Chidliak in 2006 and 2007, of which 286 samples, or 29 percent, contained KIMs. The full suite of KIMs have been recovered from the property, including p-type pyrope garnet, eclogitic garnet, chrome diopside, picroilmenite, chromite and forsteritic olivine. A significant number of the KIMs were over 1.00 mm in size. Kimberlite mineral grains larger than 1.00 mm are not common and are often a strong indication of a proximal kimberlite source. Ten percent of the 2,284 p-type pyrope garnets that were analyzed by electron microprobe are classified as high-chrome, low-calcium G10 garnets. G10 garnets are commonly associated with diamond mines throughout the world. Based on the favorable indicator mineral results, a heliborne magnetic/electromagnetic survey commenced in July, 2008, the survey, flown at 100 metre line spacing, was completed in August.
In July, August and September 2008 Peregrine discovered the CH-1, CH-2 and CH-3 kimberlites, estimated at six, three and two hectares respectively.
The CH-1 kimberlite was discovered when a kimberlite outcrop within a circular magnetic anomaly selected from an airborne geophysical survey was identified. The kimberlite outcrop at CH-1 is described as being magmatic material with abundant olivine macrocrysts and pyrope garnets. A sample of 288.9 kilograms collected from the outcrop and nearby boulders was sent to the Saskatchewan Research Council Geoanalytical Laboratories ("SRC") to be analyzed for microdiamond content by caustic fusion. Representative surface samples from three different CH-1 kimberlite units, 1A, 1B and 1C were processed by the SRC. Sample 1A weighed 100.0 kg and returned 44 diamonds larger than the 0.075 mm sieve size including two diamonds larger than the 0.600 mm sieve size. Sample 1B weighed 94.9 kg and returned 146 diamonds larger than the 0.075 mm sieve size, including ten diamonds larger than the 0.600 mm sieve size, an indication of a very favourable coarse diamond distribution. Sample 1C weighed 94.0 kg and returned 184 diamonds larger than the 0.075 mm sieve size including 15 diamonds larger than the 0.600 mm sieve size. The CH-1 caustic fusion results are summarized in the next table.
A second kimberlite outcrop measuring approximately 20 metres by 25 metres was discovered in August, 2008, near the edge of an estimated three-hectare geophysical anomaly located 1.5 km from CH-1; this kimberlite was named CH-2. The kimberlitic material at CH-2 is described as being similar to CH-1 and consists of kimberlite breccias and magmatic kimberlite. A surface sample of 356.6 kg was collected and sent to SRC for caustic fusion analysis. The results of this sample yielded 372 diamonds larger than the .075 mm sieve size including three diamonds larger than the 0.600 mm sieve size, as summarized in the next table.
The CH-3 kimberlite, discovered in September 2008, is located approximately twelve km from CH-1. The kimberlite material is described as being magmatic with abundant kimberlite indicator minerals including pyrope garnet and olivine, and a large elongated mantle xenolith measuring approximately 25 cm by 10 cm. A surface sample of 253.7 kg of kimberlite collected was also sent to the SRC for analysis via caustic fusion. CH-3 diamond results yielded 189 diamonds larger than the 0.075 mm sieve size. A summary of the CH-3 diamond results is also included in the table below.
SUMMARY OF CHIDLIAK PROPERTY CAUSTIC FUSION DIAMOND RESULTS
Sample |
Sample Weight (kg) |
Numbers of Diamonds According to Sieve Size Fraction (mm) |
Total Diamonds |
Total Carats >0.850mm |
|||||||||
+0.075 |
+0.106 |
+0.150 |
+0.212 |
+0.300 |
+0.425 |
+0.600 |
+0.850 |
+1.180 |
+1.700 |
||||
CH-1A |
100.0 |
9 |
11 |
9 |
9 |
2 |
2 |
2 |
0 |
0 |
0 |
44 |
|
CH-1B |
94.9 |
34 |
37 |
28 |
19 |
13 |
5 |
4 |
2 |
2 |
2 |
146 |
0.157 |
CH-1C |
94.0 |
51 |
32 |
33 |
27 |
11 |
15 |
8 |
5 |
2 |
0 |
184 |
0.101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CH-2 |
356.6 |
249 |
101 |
15 |
3 |
1 |
0 |
2 |
0 |
1 |
0 |
372 |
0.029 |
CH-3 |
253.7 |
79 |
60 |
27 |
11 |
11 |
1 |
0 |
0 |
0 |
0 |
189 |
|
At the end of the 2008 exploration season at Chidliak a 2.28 tonne mini-bulk sample was collected by hand from the surface of the CH-1 kimberlite. The sample was collected from units 1A and 1B and shipped to SRC for analysis. A total of 168 diamonds greater than the 0.425 mm sieve size were recovered, including 34 commercial-sized diamonds larger than the 0.85 mm sieve size as well as a 2.01 carat, gem quality, clear colourless octahedron. A summary of the diamond results from the mini-bulk sample are listed in the following table.
SUMMARY OF CH-1 MINI-BULK SAMPLE DIAMOND RESULTS
Sample |
Sample Weight (kg) |
Numbers of Diamonds According to Sieve Size Fraction (mm) |
Total Diamonds |
Total Carats >0.850mm |
Total Carats >1.18 mm |
Diamond |
|||||||
+0.425 |
+0.600 |
+0.850 |
+1.180 |
+1.700 |
+2.360 |
+3.350 |
+4.750 |
||||||
CH-1A |
1,174 |
38 |
31 |
9 |
5 |
0 |
1 |
0 |
1 |
85 |
2.55 |
2.45 |
2.17 |
CH-1B |
1,106 |
37 |
28 |
9 |
3 |
4 |
2 |
0 |
0 |
83 |
1.00 |
0.80 |
0.90 |
TOTAL |
2,280 |
75 |
59 |
18 |
8 |
4 |
3 |
0 |
1 |
168 |
3.55 |
3.25 |
1.56 |
Peregrine was operator of the 2009 exploration programme at Chidliak which had a budget of $9.2 million and was fully funded by BHP Billiton ("BHPB"). Details of Peregrine's partnership with BHPB are outlined in the "Baffin Island Alliance with BHP Billiton" section of this page. The 2009 programme included core drilling of selected targets, a 50-tonne mini-bulk sample from the CH-1 kimberlite, collection of over 1,200 heavy mineral samples, ground magnetic and electromagnetic geophysical surveys and initiation of an environmental baseline study. A second camp was constructed in the Spring to facilitate the increase in exploration activity this year. The new camp has been named Sunrise while the original camp is referred to as Discovery. Both camps hold up to 24 people, which allows for the support of up to 48 people at Chidliak.
The field portion of the 2009 Chidliak exploration programme is now complete. Between July 2009 and September 2009, thirteen new kimberlites were discovered at Chidliak, seven by drilling and six by prospecting and mapping, bringing the total number of kimberlites discovered to date on the Project to sixteen. During this 2009 exploration programme five instances of kimberlite float were discovered by prospecting. Microdiamond samples weighing approximately 200 kilograms each from 12 of the 13 kimberlites discovered this year, from CH-1 and one kimberlite float occurrence have been sent to SRC and are currently being processed. Results from these samples will be received, analyzed and reported on a regular basis through the end of the year. All samples from the 2009 program, including those for the 1273 indicator mineral samples and 636 geochemical samples will be analyzed as they are received by the laboratories with results reported by the Company on a regular basis.
A mini-bulk sample of approximately 50 tonnes was collected from an outcrop exposure at the CH-1 kimberlite. The kimberlite material was removed from the surface of the outcrop by hand and placed into 150 steel drums. The mini-bulk sample was collected and shipped under strict chain of custody protocols supervised by senior Peregrine personnel. The microdiamond results from this sample are expected in the fourth-quarter of this year.
Planning has begun for the 2010 Chidliak exploration programme which is currently scheduled to commence in April with the drilling of lake-based geophysical anomalies. The programme likely will include additional work on a number of the known kimberlites, an expanded airborne geophysical survey, ground geophysical surveys, utilization of more than one drill rig to test multiple geophysical anomalies, continued prospecting, mapping and geochemical sampling of anomalies and the collection of additional indicator mineral samples. More information regarding the 2010 exploration programme will be provided in early 2010.
In addition to its diamond potential, the Chidliak property hosts mineral anomalies indicative of platinum/palladium, lead-zinc and copper deposits. The primary goal in regards to these metals anomalies is to discover bedrock sources for the metals indicator minerals in one or more of the anomaly areas. Highly anomalous concentrations of the platinum-bearing mineral sperrylite, the zinc-bearing mineral gahnite and the copper-bearing mineral chalcopyrite were recovered from till samples collected in 2006 and 2007. Of the 970 samples collected on Chidliak, 220 contained at least one grain of either sperrylite, gahnite or chalcopyrite. In addition, approximately 350 of the 970 samples contained at least one gold grain with two samples containing over 100 gold grains. The three distinct anomaly areas on Chidliak are referred to as the Sperrylite Anomaly, the Gahnite Anomaly and the Chalcopyrite Anomaly.
Sperrylite is a platinum-bearing mineral that is often associated with rocks that contain platinum, palladium and nickel. The Sperrylite Anomaly occurs over a broad area measuring approximately 10 km by 10 km. Of the 44 samples collected in this area, 17 contiguous samples contained anomalous sperrylite counts. Several samples outside the Sperrylite Anomaly area also contain sperrylite including one sample with 60 grains and ten percent by weight goethite. Goethite is present in gossans which consist of iron-bearing weathered material that can overlie sulphide-associated deposits.
Gahnite is a primary indicator mineral for metamorphosed massive sulphide lead-zinc-silver-copper deposits. The Gahnite Anomaly is approximately 2 km by 2.5 km in size and nine of ten samples collected within the area contained highly anomalous concentrations of gahnite ranging from 47 to approximately 1,600 grains.
Chalcopyrite is a very common mineral in copper deposits but usually only a small proportion of the grains survive in the weathered glacial till. The Chalcopyrite Anomaly measures approximately 15 km by 20 km in size and eight of the 15 samples collected within the area contained chalcopyrite grains. One sample contained 320 grains which is considered highly anomalous.
In the summer season of 2008 Peregrine established an exploration camp at Chidliak to conduct helicopter-borne magnetic/electromagnetic surveys over the areas anomalous in KIMs and the Sperrylite Anomaly. Concurrently, the metals anomalies were the subject of a program of prospecting, geologic mapping and geochemical sampling.
Exploration Updates
Baffin Island Alliance with BHP Billiton
Peregrine's Baffin Island properties are owned 100% by Peregrine subject to certain back-in rights held by BHPB. In November, 2008, BHPB elected to exercise its back-in rights as stated in the 2005 exploration agreement between the two Companies. As outlined in the agreement, once Peregrine has incurred a minimum of $3,000,000 and up to $10,000,000 of expenditures on the Property, BHPB has a one-time option to elect to acquire a 51% interest in the subject property by sole-funding five times the exploration expenditures that have been incurred ($15 million to $50 million). Peregrine reached and exceeded the minimum expenditure requirement on the Chidliak property in the 2008 exploration season, which lead to BHPB's decision to back-in to the agreement. Peregrine will remain acting as principle operator of the project, however, BHPB is entitled to become the operator at any time while it is sole-funding operations.
BHPB has the right to earn an additional seven percent interest by sole-funding the complete costs of a bankable feasibility study. If this option is exercised, the resulting ownership interests in any potential mine would be BHPB 58% and Peregrine 42%.
Qilaq
In February of 2009 Peregrine announced that the Nunavut Mining Recorder approved the Company's application for 86 prospecting permits bordering the Chidliak property. The new permits total approximately 1.3 million hectares, more than doubling the Company's prospecting rights on Baffin Island. The new permits have been named the 'Qilaq' project. Qilaq is 100% owned by Peregrine and adjoins Chidliak to the north, east and south. A map outlining Qilaq is available at http://www.pdiam.com/i/pdf/Qilaq.pdf .
The geologic features of Qilaq and its proximity to Chidliak make this new project an ideal diamond exploration target. Of particular interest is the geologic interpretation that Qilaq and Chidliak are underlain by the same ancient Archean bedrock. Most of the world's major diamond deposits are hosted in similar geologic environments. Currently, Peregrine is evaluating Qilaq's diamond potential by collecting approximately 600 till samples and analyzing them for kimberlite indicator minerals. Results are expected in early 2010.
Uranium Anomalies - Flint Lake and Kimmirut Properties
On the 300,000 hectare Flint Lake property and the 655,000 hectare Kimmirut property, strong and large scale uranium anomalies are present. Highly anomalous concentrations of the uranium-bearing mineral uraninite-thorianite were recovered from till samples collected by Peregrine in 2007. Uraninite is the principal ore mineral in most uranium mines throughout the world. Thorianite is the thorium analog of uraninite. Uraninite-thorianite is a mineral having varying proportions of uranium and thorium. Pyrite, chalcopyrite and gold grains were also recovered from several samples on the Flint Lake property in the anomalous uranium area.
The summer 2008 exploration program on the Kimmirut property included geologic mapping, prospecting, ground scintollometer surveys and geochemical sampling. Results of these evaluations are pending. Peregrine is planning a field program to evaluate the Flint Lake property in 2009.
Eastern Arctic Region, Nunavut
Nanuq Property
In the last five years, an area loosely referred to as the eastern Arctic region of Canada has been the most prolific area for kimberlite and diamond discoveries in Canada, with seven new kimberlite districts being identified. In 2007, Peregrine discovered the first three diamondiferous Kimberlites at the Nanuq property, establishing a new Canadian diamond district. Two of the three kimberlites are among the largest diamondiferous kimberlites yet discovered in the region. With the first three kimberlites having encouraging diamond contents and two of those being large, Peregrine believes the potential for discovering kimberlites with favorable economic characteristics is good in this new district.
The 314,000 hectare Nanuq property is located approximately 300 km north-northeast of Rankin Inlet, just south of Wager Bay. (Click here to view the location map). The property was originally acquired by Dunsmuir Ventures ("Dunsmuir") in 2003 to secure an area containing anomalous concentrations of mantle-derived indicator minerals originally identified in a reconnaissance-scale till sampling program conducted by BHP Billiton in 2000 and 2001. In early 2006, Peregrine and Dunsmuir completed a business combination and exploration on the property continued. Peregrine holds a 100 percent interest in the Nanuq property subject to a two percent gross overriding royalty payable to BHP Billiton.
During the summer of 2007 Peregrine drilled three geophysical anomalies at the heads of two indicator mineral trains resulting in the discovery of three kimberlites, Kayuu (Hawk), Naturalik (Eagle) and Tudlik (Sandpiper). The estimated surface expressions of the three kimberlites are five, seven and one hectare respectively. All three of the kimberlites are significantly diamondiferous. In total, 1559 kg of material from the three kimberlite was analyzed and 1013 diamonds larger than .075 mm were recovered. A total of 44 stones larger than a 0.425mm square mesh sieve was recovered, with the largest stone remaining on a 1.18mm square mesh screen. Stone counts range from 0.44 stones/kg at Naturalik to 1.26 stones/kg from an 89 kg sample of Tudlik. (Click here to view a summary of the diamond results).
Core from the three kimberlites was logged and interpreted by Mineral Services Inc. and three dimensional models were constructed for Kayuu and Naturalik. Kayuu and Tudlik consist dominantly of volcaniclastic material with subordinate magmatic material. Naturalik is composed dominantly of magmatic material with lesser volcaniclastic material. The kimberlite bodies have some geologic similarities to those found in the Lac de Gras region of the Northwest Territories. Radiometric age dating of Naturalik and Kayuu indicate that their ages are 80 and 70 million years respectively, a new kimberlite age for the eastern Arctic region.
Prior to the discovery of the kimberlites, the property consisted of 144 mineral claims covering 146,500 ha. In the fall of 2007, an additional 62 claims covering 54,500 ha were acquired, bringing the property to 201,000 ha in size. To date approximately 1300 heavy mineral samples have been collected in the Nanuq area and the entire 201,000 hectare property has been covered by high resolution airborne magnetic surveys with a line spacing of 150 metres or better. In 2008, an additional 114 claims were acquired bringing the property to a total area of 314,000 ha.
Currently a $1.5 million diamond exploration program is underway at Nanuq. Field work commenced in July 2009 with the anticipation of collectiong approximately 1,200 heavy mineral samples and the evaluation of 10 to 20 geophysical anomalies by prospecting and geophysical sampling. The goals of the 2009 programme include increasing kimberlite indicator mineral sample density, the evaluation of geophysical anomalies and the collection of follow-up samples relating to unexplained kimberlite indicator mineral anomalies. Results from this programme are expected to be recieved 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.
Nanuq North Property, Nunavut
Peregrine Diamonds has entered a letter agreement with Indicator Minerals Inc. ("Indicator") and Hunter Exploration Group ("Hunter") on the 33,000 hectare Nanuq North property immediately north of the Nanuq property. (Click here to view the location map) Under the terms of the agreement, a joint venture will be formed with Indicator as the operator and Peregrine and Indicator sharing the costs of exploration on a 50/50 basis. Hunter will retain a 20 percent interest carried through completion of a scoping study and gross overriding royalty of 2% on any revenues generated from 16 claims covering 13,864 hectares. Peregrine and Indicator each have undivided 50 percent interests in the remaining claims.
In 2008, exploration at Nanuq North consisted of a 2774.2 line-kilometre heli-borne magnetic/electromagnetic geophysical survey flown at 75 metre line spacing and ground geophysical surveys. A late season reverse circulation drilling campaign resulted in the discovery of a new kimberlite, NQN-001, described in the September 3, 2008 press release.
This new kimberlite is interpreted from geophysical data as having a surface area of 4.5 ha. Samples were sent to SRC for microdiamond analysis via caustic fusion and the kimberlite was found to be significantly diamondiferous. Diamond Results were reported in the February 10, 2009 press release. A 125.7 kilogram sample collected from the top 64.0 metres of the drill hole yielded 0.89 diamonds per kilogram while a 27.00 kilogram sample collected over a 13.7 metre interval at the bottom of the hole yielded 3.48 diamonds per kilogram. The results are summarized in the table below.
NQN-001 CAUSTIC FUSION DIAMOND RESULTS
Down-hole |
Interval Length (m) |
Sample Weight (kg) |
Square Mesh Screen Size (in mm) |
Number of Diamonds |
Number of Diamonds per kg |
||||||
0.075 |
0.106 |
0.150 |
0.212 |
0.300 |
0.425 |
0.600 |
|||||
8.8 - 72.8 |
64.0 |
125.75 |
39 |
37 |
18 |
15 |
1 |
0 |
2 |
112 |
0.89 |
72.8 - 86.5 |
13.7 |
27.00 |
38 |
33 |
11 |
7 |
3 |
1 |
1 |
94 |
3.48 |
Total |
77.7 |
152.75 |
77 |
70 |
29 |
22 |
4 |
1 |
3 |
206 |
1.35 |
The NQN-001 diamond results confirm that all four kimberlites in the Nanuq/Nanuq North diamond district are significantly diamondiferous. Current exploration data suggests that other diamondiferous kimberlite sources remain to be discovered.
The discovery at Nanuq North, situated just north of Peregrine's Nanuq property expands the size of the known kimberlite field in the Nanuq area. The new find is located 17 kilometres to the north of Peregrines 2007 discoveries, the Kayuu, Naturalik and Tudlik kimberlites. Peregrine is working to finalize a 2010 exploration program at Nanuq that will be focused on prioritizing drill targets and is working with Indicator to determine the scope of future work at Nanuq North.
Lac de Gras
WO Property & DO-27 Kimberlite, Northwest Territories
The WO Property comprises 14 mineral claims and 3 mineral leases, covering an area of 15,107 hectares, and is located approximately 300 kilometres NNE of Yellowknife in the Northwest Territories, Canada. The property is approximately 27 km southeast of the DiavikTM Diamond Mine and is 11 km east of the main Tibbitt to Contwoyto winter ice road. The property hosts a number of diamondiferous kimberlites, including the nine hectare DO-27 pipe and the four hectare DO-18 pipe. (Click here to view the location map). Ownership interests in the WO property are as follows: Peregrine 71.74%, Archon Minerals Limited 17.48% and DHK Diamonds Inc. 10.78%. Peregrine holds 97.92% of the diamond marketing rights.
The property occurs in the Slave Province, an Archean segment of the North American Craton, which is composed primarily of granites, gneisses and supracrustal rocks. The Slave Province is a classical setting for diamondiferous kimberlite emplacement as evidenced by the known occurrence of more than 400 kimberlite bodies. The Province is home to two world-class diamond mines, EkatiTM and DiavikTM, and two projects that are currently being developed into diamond mines, the De Beers Gaucho Kue and Snap Lake projects.
The DO-27 kimberlite comprises pyroclastic and volcaniclastic units and an earlier hypabyssal sheet system, in contrast to the DO-18 kimberlite which contains mainly volcaniclastic units.
The DO-27 kimberlite was discovered in 1993 by Kennecott Canada Exploration Inc. ("Kennecott") and partners, and returned extremely promising microdiamond results through core drilling. These results encouraged Kennecott to move directly to an underground bulk sampling programme in 1994. This bulk sample was collected by constructing an underground drift into the northeastern portion of the kimberlite. An average grade of 36 carats per hundred tonnes ("cpht") was obtained from this area of the kimberlite. Kennecott subsequently converted their working interest in the property to a 1% Gross Overriding Royalty. In the opinion of Peregrine, the Main Vent of DO-27, which yielded encouraging microdiamond results from the 1993 core drilling, remained untested.
BHP Billiton Inc. acquired a 39.4% interest in the WO property in 2001, with an option to increase this interest to 54.475% by funding the completion of a 200 tonne bulk sample of DO-27. In 2004, BHP Billiton sold its interest and associated marketing rights to Peregrine.
Because the 1993 underground bulk sample did not test the Main Vent of the DO-27 pipe, Peregrine and joint venture partners were convinced that the pipe might be higher grade than the previous test suggested. During early 2005, Peregrine completed six large diameter (35 cm) reverse circulation ("LDRC") drill holes in the DO-27 Main Vent, sampling the suspected higher-grade zone. This amounted to approximately 151 dry tonnes of kimberlite which was subsequently processed at the EkatiTM Diamond Mine and returned an average grade of 98 cpht, confirming Peregrine's hypothesis. Individual grades and specific diamond information for the six 2005 LDRC holes are summarized in Peregrine's June 14, 2005 press release. Three separate valuations on the diamonds recovered from the 2005 bulk sample were performed by BHP Billiton Diamonds Ltd., Rio Tinto Diamonds and Aber Diamond Corp. returning average values for the entire parcel of US$53 to US$67 per carat. Details of the valuation results are found in Peregrine's August 29, 2005 press release.
Following the encouraging 2005 results, Peregrine completed a second, larger bulk sampling programme on the DO-27 kimberlite during the winter of 2006. This programme involved the completion of twelve LDRC drill holes (61 cm), totaling 2,424 metres of drilling and resulted in the extraction of 548 dry tonnes (566 wet tonnes) of kimberlite. These samples were processed at the EkatiTM Diamond Mine. This analysis revealed an average grade of 88 cpht from the Main Vent and a grade of 85 cpht from the northeastern portion of the kimberlite (the "North East Lobe"), which is geostatistically consistent with the 2005 bulk sample results. A total of 8,855 diamonds were recovered using a 1 mm sieve size cut-off. Of this total, 49 diamonds larger that one-half carat and 13 diamonds greater than one carat were recovered. The five largest stones recovered were: 7.11, 3.91, 2.34, 2.11 and 1.83 carats. The 2006 results are available in Peregrine's September 5, 2006 press release.
The company received an independent valuation report by WWW International Diamond Consultants Ltd. ("WWW"), an internationally recognized diamond valuation and consultancy company, on the combined 2005 and 2006 diamond parcels, comprising 508.9 carats from the Main Vent and the North East Lobe pyroclastic kimberlite. The average modeled valuation ranged from US$45 to US$73 per carat using WWW's September 2005 diamond price book and from US$41 to US$62 per carat using WWW's September 2006 diamond price book. The price difference reflected the significant drop in certain world-wide rough diamond prices during this period. These results are included in Peregrine's press release of November 6, 2006.
On December 6, 2006, Peregrine began its 2007 bulk sampling programme on the land-based portion of the North East Lobe of DO-27. A sample of approximately 2,651 wet tonnes of kimberlite was collected by LDRC drilling with the drill holes being 61 cm in diameter.
The 2007 bulk sample was processed at EkatiTM in their dedicated Sample Plant, under Peregrine's supervision. QA/QC was employed in the form of processing protocols, security protocols and several types of internal and external audits. Peregrine qualified persons and supervisory staff performed all concentrate handling and diamond sorting. Approximately 1,725 carats of diamond was recovered (+1mm) from the composite sample. Due to varying bottom screen sizes used in the various years programs, a modelling and normalization exercise was performed on the results by M.M. Oosterveld, a Q.P. and recognized expert in diamond resource statistics and modelling. In addition, a 3-D density model was produced by AMEC Americas Ltd. ("AMEC") to calculate grades. The major main lobe pyroclastic kimberlite (PK) returned a 2006-2007 combined grade of 91 cpht, again demonstrating grade consistency in the deposit. The subsidiary NE lobe PK and other lithologies together produced a grade of 78 cpht, indicating the dilution by lower grade material.
As reported in a press release on December 17, 2007, modelled diamond values for 2,075 carats of diamonds recovered from the DO-27 kimberlite during 2005, 2006 and 2007 ranged from US$43 to US$70 per carat, with a "Base Case" average of US$51 per carat. The valuation was completed in Antwerp, Belgium under the supervision of WWW.
Metallurgical test work on kimberlite liberation including scrubbing and High Pressure Grinding Roll (HPGR) studies was performed on specific 2007 drill core. Environmental Acid Rock Drainage (ARD) tests were also performed. The DO-27 rock showed good disaggregation and liberation properties to aid processing, and tails proved to be acid net neutralizing. This work, and the delineation drilling, geological and density modelling, and bulk sample results including valuations were incorporated into an internal Preliminary Technical Assessment ("PTA") and Mineral Resource Estimation by AMEC.
As reported on June 24, 2008, DO-27 hosts an indicated mineral resource of 18.2 million carats in 19.5 million tonnes of kimberlite to a depth of 325 m below surface. The estimated grade of the resource is 94 cpht. The resource estimate was completed by AMEC. An additional 6.5-8.5 million tonnes of kimberlite below the indicated resource was classified as a potential mineral deposit and DO-27 remains open at depth.
Mineral Services Canada Inc. provided AMEC with a three dimensional model of DO-27. An external pipe shell was defined and the internal geology of the pipe was established; the dominant pipe infill, which comprises approximately 86 percent of the pipe volume, is primary pyroclastic kimberlite ("KIMB 1"). AMEC then produced a block model with 10 metre by 10 metre by 5 metre blocks. The tonnage for each block was calculated by multiplying the volume of each block by a density determined from a three dimensional density model developed by AMEC. The density model was based on 507 specific gravity measurements on drill core from throughout the body performed by Teck Cominco's Global Discovery Labs in Vancouver. There is a trend of increasing density with depth and towards the margins of DO-27 as the near-surface material and the kimberlite in the central part of the pipe is highly weathered, making this material very amenable to mechanical reduction to a high diamond grade kimberlite concentrate. The reported tonnage for the indicated resource and the potential mineral deposit is restricted to those blocks that fall within the KIMB-1 wireframe. The resource calculation is described in a 43-101 report by AMEC. (Click here for a copy of the report).
The three dimensional model of the DO-27 kimberlite and the tonnage and resource estimates are based on data from 66 core holes totalling 17,300 metres and 46 large diameter (35-61 cm) RC holes totalling 8,800 metres. A cumulative 3,200 dry tonnes of bulk sample material collected from the RC holes was processed for final diamond recovery at the bulk sample test facility at BHP Billiton's Ekati(tm) Diamond Mine. A geological model of DO-27 can be viewed at http://www.pdiam.com/i/pdf/DO27.pdf.
In addition to the resource calculation, AMEC completed an internal PTA study of DO-27 where a number of mining engineering parameters were examined in conjunction with the resource estimate, currency exchange rates, fuel and other consumable prices, diamond valuations and capital cost trends in the mining industry, to determine the current economic potential of DO-27. Both a "scrub-only" and "stand-alone" operation were investigated. For a "scrub-only" operation, a kimberlite concentrate with a grade up to ten times that of run of mine material would be produced at DO-27 by conventional open-pit mining, crushing and scrubbing techniques. The resulting concentrate would be transported elsewhere for final diamond recovery. For a "stand-alone" operation, rough diamonds would be recovered at the site by way of a conventional open-pit mining and diamond processing facility. The economics of a potential "scrub-only" project were determined by the PTA to be currently more favourable than a "stand-alone" operation.
AMEC investigated whether the DO-27 indicated mineral resource had the potential to pay back capital on an undiscounted cash flow basis. A preliminary financial analysis for a "scrub-only" mining operation was performed which achieved this objective, supporting the resource classification.
Although Peregrine management has concluded that the development of the DO-27 project is currently not economically justifiable, both the Company and AMEC believe that there is a reasonable chance that DO-27 could support a mining operation in the future. Factors that could enhance the economics of a mining operation at DO-27 include:
- Higher rough diamond prices.
- Possible underestimation of the average DO-27 diamond value because the current estimate is based on a parcel of only 2,075 carats.
- More favourable Canadian-US currency exchange rates.
- A diamond processing arrangement with one of the nearby diamond mines.
- Increased revenue potential from downstream cutting and polishing of DO-27 diamonds.
- Mining and processing technology advances.
- Regional infrastructure developments.
- An ultimate run of mine grade greater than the current grade estimated by reverse circulation ("RC") drill samples.
Data from the resource and engineering studies in combination with future diamond valuations will give Peregrine the ability to efficiently assess the economic potential of DO-27 on an ongoing basis. At a time of projected future shortfalls in diamond supply and expected increases in rough diamond prices, the diamond resource at DO-27, which is contained within one large kimberlite, close to existing diamond mining infrastructure, is well-positioned as a candidate for future development."
Jennifer Pell, (Ph.D., P.Geo.), Chief Geoscientist for Peregrine Diamonds Ltd., is the Qualified Person under NI 43-101, for work on the DO-27 kimberlite. Mr. Howard Coopersmith (B.Sc., P.Geo.), an internationally recognized consultant to the diamond industry, was Peregrine's external Qualified Person for the 2005, 2006 and 2007 bulk sampling programs.
Mr. Ken Brisebois (B.A.Sc., P.Eng.) and Mr. Ted Eggleston (PhD., P. Geo.) of AMEC are the independent Qualified Persons who supervised the preparation of the mineral resource estimate for the DO-27 kimberlite. Mr. Brisebois has 22 years of worldwide experience in mining resource and reserve assessments and related work and has worked on several diamond resource estimates in North America. His specialties include technical resource and reserve risk assessment, resource and reserve audits, geostatistical and geological modelling, ore and grade control and resource classification. Mr. Eggleston has more than 30 years of worldwide experience in exploration and development of mining properties including work on several diamond projects in North America.
Pellatt Lake Property, Northwest Territories
The Pellatt Lake Property is located approximately 400 km northeast of Yellowknife, NT, adjacent to the northeastern corner of the EkatiTM Diamond Mine property. The Pellatt Lake Property comprises 25 mineral claims and three mineral leases covering an area of 29,264 hectares around the southern part of Pellatt Lake, Windy Lake and the northern part of Hardy Lake (Click here to view the location map). Peregrine has optioned 10 of the claims and the 3 leases on Pellatt Lake property from Dentonia Resources Ltd. and DHK Diamonds Inc. and can earn a 75% interest under certain conditions. The remainder of the property was staked by Peregrine.
The Pellatt Lake property is in the Eastern Slave Province (Contwoyto Terrane) and is predominantly underlain by Archean granitic rocks and, more rarely, by supracrustal metasedimentary rocks. The claims are covered, to varying degrees, by a veneer of till, the majority of which is basal till. The property is in a region of numerous kimberlite occurrences, the most notable is the EkatiTM Diamond Mine property, which contains one of the richest kimberlite fields in the world. Previous diamond exploration on the Pellatt Lake Property resulted in the discovery of one kimberlite (PL01). Limited testing of this kimberlite indicated that it is diamondiferous.
Peregrine has been exploring the Pellatt Lake property since 2004. Over 350 till samples have been analyzed producing abundant kimberlite indicator minerals. A number of high and medium priority geophysical targets have been identified, both from earlier airborne magnetometer and electromagnetic surveys and from the 2004 FalconTM airborne gravity gradiometer survey completed by Peregrine. Ground geophysical surveys (magnetic, electromagnetic and gravity) have been completed over some targets.
In 2005, five N.Q. diamond drill holes, totaling 325 metres, tested four separate geophysical targets. One of these holes (PL06-05) was successful in penetrating kimberlite; intersecting three kimberlite horizons, the thickest of which is a multiphase band of volcaniclastic kimberlite approximately ten metres wide. This hole was drilled approximately 150 metres west of the known kimberlite (PL01). In 2007, a late season drill program tested three additional high priority geophysical anomalies. No kimberlite was intersected.
Sampling results confirmed the presence of a dominant mineral dispersion train, along a WNW-trending structure within which the known kimberlites, PL-01 and PL06-05, are located. The kimberlite indicator minerals and geophysical anomalies indicate that the potential exists for additional kimberlites to be discovered on the Pellatt Lake Property.
Lac de Gras East, Northwest Territories
The Lac de Gras East property consists of 81 mineral claims covering 78,153 hectares, located 300 km northeast of Yellowknife. (Click here to view the location map) Peregrine has an option from Thelon Ventures Ltd. to earn a 65% interest on 24 claims by making share payments and spending an aggregate of $4.1 million on exploration on Lac de Gras East and West over a five year period. The other claims are 100% held by Peregrine.
The Lac de Gras East property is in the Eastern Slave Province (Contwoyto Terrane) and is predominantly underlain by Archean granitic rocks and, more rarely, by supracrustal metasedimentary rocks. The claims are covered, to varying degrees, by a veneer of till, the majority of which is basal till. The property is in a region of numerous kimberlite occurrences, the most notable is the DiavikTM and EkatiTM Diamond Mine properties, which contain two of the richest kimberlite fields in the world. The Lac de Gras East claims surround Peregrine's WO property which contains the DO-27 kimberlite.
Since 2004, exploration at Lac de Gras East has included collecting over 1000 indicator mineral samples and completion of electromagnetic and magnetometer airborne geophysical surveys over the property. A FalconTM airborne gravity gradiometer survey was completed covering some of the claims. A number of high and medium priority geophysical targets have been identified from these surveys and ground geophysical surveys (magnetic, electromagnetic and gravity) have been completed over some targets. One target has been tested by diamond drilling; kimberlite was not intersected.
Till samples have been analyzed producing abundant kimberlite indicator minerals, with no apparent source yet discovered on the property. The kimberlite indicator minerals and the presence of untested high priority geophysical anomalies indicate that the potential exists for kimberlites to be discovered on the Lac de Gras East property.
Lac de Gras West, Northwest Territories
The Lac de Gras West property consists of 40 mineral claims covering 34,231 hectares, located 275 km northeast of Yellowknife. The property borders on the EkatiTM Diamond Mine and is 15 to 50 km west of the DiavikTM Diamond Mine. (Click here to view the location map) Peregrine has an option to earn a 65% interest in the remaining 22 claims from Thelon Ventures Ltd. by meeting certain conditions. The other claims are held 100% by Peregrine.
The Lac de Gras West property is in the Eastern Slave Province (Contwoyto Terrane) and is predominantly underlain by Archean granitic rocks and, more rarely, by supracrustal metasedimentary rocks. The claims are covered, to varying degrees, by a veneer of till, the majority of which is basal till.
Since 2004, exploration at Lac de Gras West has included collecting over 700 indicator mineral samples and completion of electromagnetic and magnetometer airborne geophysical surveys over the property. A number of high and medium priority geophysical targets have been identified from these surveys. Over 800 line-kilometers of ground geophysical surveys (magnetic, electromagnetic) have been completed over more than forty targets.
Previous diamond exploration on the Lac de Gras West Property resulted in the discovery of one kimberlite (DI-02). In 2006, Peregrine drilled two holes into this body. In 2006 and 2007, three targets were tested by diamond drilling; kimberlite was not intersected.
Till samples have been analyzed producing abundant kimberlite indicator minerals, with no apparent source yet discovered on the property. The kimberlite indicator minerals and the presence high priority geophysical anomalies defined by airborne and ground surveys that have not been drill tested indicate that the potential exists for kimberlites to be discovered on the Lac de Gras West property.
Manitoba
click here to view location map
Crosswell River Property, Manitoba
On April 20, 2006, Peregrine entered an agreement whereby it was granted an option to acquire a 90% interest in a Mineral Exploration License (MEL) comprising 7,572 hectares located in Manitoba, Canada. Four other MEL's covering 120,125 hectares were acquired by Peregrine in the area and together the five MEL's comprise the Crosswell River property. (Click here to view the location map) Under the terms of this agreement, Peregrine must pay an aggregate of $300,000 to the vendor over a five-year period ending in 2011 and incur minimum assessment expenditures on the property aggregating $600,000 over the same period. Peregrine is responsible for 100% of all exploration and other costs up to completion of a bankable feasibility study. The vendor may participate in subsequent mining operations under a joint venture with the Company, but can elect to have its 10% interest convert to a 1% gross overriding royalty on diamond production or a 1% net smelter royalty on other metal or mineral production. Peregrine can terminate this option at any time by providing 30 days notice to the vendor.
The Crosswell River property is located within the Hudson Bay Basin in northeastern Manitoba. In this region, along the margins of Hudson's Bay, Paleozoic sediments (predominantly Devonian to Ordovician carbonate rocks) overlie the basement rocks. The basement is believed to be the northern margin of the Trans-Hudson Orogen adjacent to the Southern Hearne Domain of the Churchill Province. A significant number of indicator minerals with interesting chemistries occur throughout Manitoba, the source of which has never been located, making the area prospective from a diamond exploration point-of-view.
Work to date on the Crosswell River property includes a 10,600 line kilometer fixed-wing airborne magnetic survey in 2006 and follow-up ground magnetic surveys over six anomalies in 2007. In March and April, 2008, two high priority magnetic anomalies were drilled without intersecting kimberlite. At one of the anomalies, a mafic rock containing sulphide was intersected. The rock is currently being investigated for its metals potential.
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