January 28, 2010
Peregrine Reports Diamond Results For 49.6 Tonne Sample From CH-1A Phase Of CH-1 Kimberlite
Majority of Diamonds Classified as White/ColourlessPeregrine Diamonds Ltd. ("Peregrine" or "the Company") is pleased to report that a 49.6 tonne sample of surface material collected from the CH-1A phase of the CH-1 kimberlite, returned 20.26 carats of commercial-sized diamonds larger than 0.85 mm for a diamond content of 0.41 carats per tonne ("cpt"). The CH-1 kimberlite is located on the 9,800 square kilometre Chidliak project ("Chidliak"), Baffin Island, Nunavut, Canada. The sample was processed by dense media separation ("DMS") at the Saskatchewan Research Council Geoanalytical Laboratories ("the SRC"). The diamond results are presented in the following table.
The 49.6 tonne sample returned a total of 15 diamonds larger than 0.30 carats in size, the largest diamond was a 1.35 carat brown octahedron and the second largest stone was a 0.71 carat white/colourless aggregate of octahedrons. Howard Coopersmith, an independent consultant to Peregrine, examined the entire diamond parcel and described the colours of 126 diamonds and the crystal forms for 64 diamonds. The following colour classification was provided for all 94 diamonds larger than the 1.70 mm sieve size and 32 of the 86 diamonds larger than the 1.18 mm sieve size: 55% white/colourless, 17% off-white, 25% brown and 3% grey. The following classification of crystal forms was provided for 34 diamonds larger than the 2.36 mm sieve size, and 30 of the 60 diamonds larger than the 1.70 mm sieve size: 50% octahedrons, 23% transitional octahedrons (resorbed tetrahexahedrons), 13% irregular, 11% clivage (fragments) and 3% macles. While the smaller stones were not described in detail, these observations appear to be representative of the entire parcel. Photographs of the 1.35 carat brown octahedron, a gem quality 0.47 carat white/colourless octahedron and three other gem quality white/colourless octahedrons ranging in size from 0.19 to 0.37 carats are available at http://www.pdiam.com/i/pdf/chidliak128.pdf.
The 49.6 tonne sample was collected from a small, easily accessible outcrop of the CH-1A phase near the north end of the CH-1 kimberlite as a follow-up to the favourable diamond results from samples collected at CH-1 in 2008. Drilling will be required to collect similar size samples from other phases of CH-1. CH-1 is interpreted as being a complex body that consists of three or more kimberlite lobes that together define a geophysical anomaly with an estimated surface expression of approximately two to three hectares. Each kimberlite lobe can consist of multiple kimberlite phases, with each phase having different geologic characteristics. Sampling in 2008 and 2009 identified the following four distinct phases at CH-1: CH-1A, CH-1B, CH-1C, and CH-1D, each with an apparently distinct diamond content as summarised in a news release dated October 21, 2009. As an example, the initial samples from the CH-1A phase returned three to four times fewer microdiamonds than equivalent samples from the other three phases. A second 1.174 tonne sample collected from the CH-1A phase in 2008 and processed by caustic fusion returned a diamond content of 2.17 cpt including a 2.01 carat gem quality diamond. If the 2.01 carat diamond is treated as an outlier and removed from the sample, the diamond content would be 0.46 cpt, a result that is consistent with the 0.41 cpt reported here for the 49.6 tonne sample. Peregrine management believes that the result from the 49.6 tonne sample of the CH-1A phase is not representative of the entire CH-1 kimberlite and that further drilling and sampling is required to understand the geological and diamond content variability at CH-1.
Brooke Clements, President of Peregrine stated "We are pleased that the first significant mini-bulk sample collected at Chidliak produced a population of gem-quality diamonds. The 49.6 tonne CH-1A sample was collected from a very small portion of the CH-1 kimberlite and our work indicates that other phases of the CH-1 kimberlite display better diamond size distribution characteristics. CH-1 is a significant diamondiferous kimberlite and we anticipate that further drilling and sampling of all its phases will confirm its economic potential."
Eric Friedland, Peregrine's CEO stated "The fact that the very first kimberlite discovered and sampled at Chidliak has a phase with a grade of 0.41 cpt and a good population of white/colourless diamonds is evidence that Chidliak is an excellent diamond project with superb exploration and development potential. In 2009, we discovered thirteen kimberlites in just over eight weeks of drilling and prospecting which equates to one new kimberlite discovery every five days. We have numerous excellent targets to drill starting in April 2010, many of which are associated with kimberlite float and kimberlite indicator minerals and we plan to collect mini-bulk samples from the CH-6 and CH-7 kimberlites this summer. We are confident that additional diamondiferous kimberlites will be discovered this year and we look forward to reporting results as the year progresses."
SAMPLE COLLECTION, PROCESSING AND DIAMOND RECOVERY
In the field, a sample of the CH-1A kimberlite phase weighing approximately 54.1 tonnes was collected by hand from the outcrop over an area measuring approximately 4 by 14 metres to a depth of 0.2 to 0.5 metres. The sample material was described as being magmatic olivine-rich kimberlite containing pyrope garnet, ilmenite, chrome diopside and mantle xenoliths. The sample collection and shipment was conducted under strict chain of custody protocols and was supervised by senior Peregrine personnel.
At the SRC, the 54.1 tonne sample was crushed by a jaw crusher with a gap set at approximately 30 mm. The crushed material was then put into 41 bulk sample bags. A representative audit sample weighing approximately 0.96 tonnes was then removed from the sample. An average moisture content of 6.6 percent was determined for the sample material making the "dry" weight of the sample that was processed by DMS 49.6 tonnes and the "dry" weight of the audit sample 0.906 tonnes. The 49.6 tonne sample was then fed to the five tonne per hour DMS plant where it was subjected to scrubbing and two stages of crushing. DMS concentration was performed on +0.85-12.0 mm feed material. Heavy mineral concentrate from the DMS was treated through a two-stage Flow Sort x-ray sorter and vibrating grease recovery circuit. The resulting concentrates were then hand-sorted using glove boxes.
As an element of Peregrine's QA/QC protocols, 150 laser-etched natural diamond tracers ranging in size from 0.20 to 1.60 carats in size were added to the sample drums in the field and 146, or 97 percent of the tracers were recovered at the SRC. To verify the DMS results, the representative 0.906 tonne audit sample described above was processed by caustic fusion at the SRC for diamonds larger than 0.425 mm and the results are presented in the following table.
Results from the caustic fusion audit will be used in conjunction with other audits to assess the recovery efficiency of the processing and diamond recovery circuits.
The SRC is an independent laboratory that is accredited by the Standards Council of Canada to the ISO/IEC Guide 25 standard for diamond recovery by caustic fusion.
As announced on November 24, 2008, BHP Billiton has elected to exercise its earn-in rights for Chidliak. Under the terms of the earn-in agreement BHP Billiton must incur a total of $22.3 million in exploration expenditures in order to earn a 51 percent interest in Chidliak.
Mr. Peter Holmes, P. Geo., Peregrine's Vice President, Exploration, is a Qualified Person under NI 43-101 and is responsible for the design and conduct of the programs carried out by the Company at Chidliak. Dr. Jennifer Pell, Peregrine's Chief Geoscientist was the Company's Qualified Person for the sample processing and diamond recovery. Howard Coopersmith, an independent consultant to the diamond industry, was Peregrine's external Qualified Person for the sample processing and diamond recovery. Mr. Holmes, Dr. Pell and Mr. Coopersmith have reviewed this release and approve of its contents.
For further information, please contact Mr. Brooke Clements, President, or Peregrine Diamonds Investor Relations, at 604-408-8880 or at firstname.lastname@example.org.
Forward-Looking Statements: This news release contains forward-looking statements. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, statements relating to the proposed exploration program, funding availability, anticipated exploration results, resource estimates, and future exploration and operating plans) are forward-looking statements. These forward-looking statements reflect the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements and, even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things, uncertainties relating to the availability and cost of funds, timing and content of work programs, results of exploration activities, interpretation of drilling results and other geological data, world diamond markets, future diamond prices, reliability of mineral property titles, changes to regulations affecting the Company's activities, delays in obtaining or failure to obtain required project approvals, any changing budget priorities of BHP Billiton, operational and infrastructure risks, and other risks involved in the diamond exploration business. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to their inherent uncertainty.
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